Product Type: Market Research Report
Published by: Datamonitor
Published: June 2003
Product Code: R313-5815Description Introduction:
This report examines the past, present and future of the global online consumer payment market. It highlights which payment solutions have been developed, which have been successful and which have failed, indicating the key components of a ‘winning’ online payment solution and positioning solutions relative to opportunities in the online and offline space.
Scope:
* Presents the results of Datamonitor consumer research program, IMPACT, for Europe and the US
* Covers an array of payment solutions from around the globe
* Includes interviews with high level executives at payment solution providers
* Includes Datamonitor's forecasts of online consumer payment volumes until 2007
Report Highlights:
The major card schemes recognize online card fraud is increasing and with it the associated costs for all parties involved in the payment value chain. They are also concerned that alternative payment mechanisms, which consumers may perceive to be more secure in the online space, may wrestle market share from payment cards if no action is taken.
Maximizing merchant involvement, as quickly and aggressively as possible, is critical if pre-paid online payment solutions are to succeed. Failure to do so gives consumers little incentive to sign up and without relatively high numbers of cardholders the business model employed by these solutions can never be viable.
The strengths of P2P payment solutions are multi-various. They are suited to high and low value transactions. They have a ‘killer application’, that is online auctions, as well as number of other uses. They also use e-mail, a communication medium that many people are familiar with, and offer quick and secure transaction opportunities.
Reasons to Purchase:
* Improve your understanding of consumers' online purchasing behavior
* Determine the characteristics of a winning online consumer payment solution
* Gain access to Datamonitor's prediction of the growth in online consumer payment volumes to 2007
Table of Contents CHAPTER 1 INTRODUCTION
The Cards & Payments Briefings Service
What is this briefing about?
Who is the target reader?
How to use this briefing?
Scope
Datamonitor’s definition of an online consumer payment
CHAPTER 2 MARKET CONTEXT
Consumers’ online behavior
Internet access is fast becoming the norm in many European markets
Accounting for the increasing number of consumers accessing the Internet
Many consumers conduct research online but fewer are willing to buy online
Travel is the hottest online sector
Making payments online is still a minority pursuit
Sizing online consumer payments markets
The US online consumer payments market dwarfs European markets
Conclusion
CHAPTER 3 COMPETITIVE DYNAMICS
Credit and debit cards
Credit cards are the dominant online payment mechanism in many markets
Still more than 80 per cent of consumers who have bought online have paid with a credit card
Accounting for the dominance of credit cards in the online environment
Debit cards are most commonly used online in France and the UK
Accounting for the relatively low online usage of debit cards
Online card fraud is on the increase
Fighting back against online card fraud
Verified by Visa is based on the 3D-Secure protocol
MasterCard SecureCode is based on the Secure Payment Application (SPA) protocol and the Universal Cardholder Authentication Field (UCAF)
Maestro’s eCommerce program is based on pseudo card numbers
The future of the card scheme security initiatives hinges on maximising acceptance and enrollment
Successful card scheme security initiatives will strike a blow against other online payment solutions
Virtual card numbers: using a different number every time
Allowing consumers to shop online without having to disclose their true credit card number
Orbiscom is the main vendor in the virtual card number space
American Express cuts back its virtual card number service
Developments in the virtual card number space have now slowed
A SWOT analysis of credit and debit cards in the online space
Prepaid online payment methods
Catering for demand among the young…and young at heart
Prepaid cards are replacing prepaid vouchers
Making prepaid cards appeal to adults
Serving the micropayments market
An online and offline alternative
Paysafecard: the pioneer European prepaid card provider
Spending on the paysafecard
Paysafecard is more than a micropayment solution
Paysafecard has attracted 1,600 merchants
Splash Plastic remains one of the largest players in the prepaid space
Spending on a Splash Plastic card
Splash Plastic currently has more than two million cards on issue
A variety of other providers compete in the prepaid online payment space
The online prepaid payment space is littered with failures
To avoid failure maximizing merchant involvement is key
Solutions must promote the insight into teen spending that they can offer
Solutions must broaden their appeal away from purely teenagers
A SWOT analysis of prepaid online payment solutions
P2P payment solutions
Establishing a niche in the online payment space
Auction websites appeal to individuals’ thrill of the chase
P2P payment services benefit from the popularity of online auctions
PayPal is the dominant player in the online P2P payments space
PayPal now has more than 25 million account holders
PayPal can still not be described as a truly global solution. However, multi-currency acceptance is a step in the right direction
A number of banks have launched P2P payment services in the UK
Outside the UK P2P payment services are provided in the US, Canada and the Netherlands
A SWOT analysis of P2P payment solutions
eWallets
eWallets: bringing security and convenience to online payment
When is an eWallet not an eWallet….when it is an ePurse
Mixed fortunes in the eWallets space
earthport driving developments forward
Egg tried its luck with the Egg Wallet
Securicor withdrew Safedoor after just a year
Gator still going strong amid controversy
PassPort’s defenses brought into question
The future of eWallets is in helping consumers to remember their passwords
A SWOT analysis of eWallets
mPayments solutions
mPayments solutions: giving a new role to the mobile device
The mobile operators take a too big slice of the cake
Vodafone: taking the mPayments model forwards
mPay Bill: utilizing the reverse billing approach
mPay Cards: taking the eWallet into the mobile world
Mobipay: a mPayments solution for payment both on and offline
Mobipay: starting out in Spain
Tackling the Spanish market first
A range of online and offline uses
A system based on a series of messages
Datamonitor remains optimistic about the future of Mobipay
Paybox: leaves the European mPayments market
Paybox’s withdrawal highlights the difficulties in achieving success
A SWOT analysis of mPayments solutions
Conclusion
Benchmarking online consumer payment solutions
Credit and debit cards win in five of nine categories
Opportunities for micropayment solutions but there may be fallout
CHAPTER 4 THE FUTURE DECODED
Forecast of the growth of online consumer payments to 2007
US online consumer payments will reach EUR168.2 billion in 2007
CHAPTER 5 APPENDIX
Research methodology
IMPACT
Supplementary data
Definitions
B2B
B2C
Credit card
Debit card
ePurse
eWallet
Macropayment
Micropayment
mPayment
P2P
PDA
PIN
Reverse billing
SMS
Current reports
Reports
Briefings
Future reports
Reports
Briefings
Relevant links
Datamonitor Financial Services Consulting
SPP writing team
How to contact experts in your industry
List of Tables
Table 1: Percentage of consumers that have accessed the Internet from specified locations during the last 12 months
Table 2: Percentage of consumers engaging in specified activity online during the last 12 months
Table 3: Percentage of consumers stating that the Internet is their preferred channel for purchasing specified product or service
Table 5: Online consumer payments by consumers in Europe and the US, 2003e
Table 6: Percentage of consumers that made online purchases via specified means
Table 7: Types of purchase that cannot be made using American Express Private Payments
Table 8: Paysafecard’s tale of the tape
Table 9: Splash Plastic’s tale of the tape
Table 10: eBay’s tale of the tape
Table 11: PayPal’s tale of the tape
Table 13: Forecasts of online consumer payments, 2003e-2007f
Table 14: Percentage of consumers that have engaged in specified online activity during the last 12 months
List of Figures
Figure 1: More than 50 per cent of consumers have accessed the Internet from home during the last year
Figure 2: There is a considerable differential between the percentage of consumers who research products and services online and the percentage who purchase them online
Figure 3: The behavior of US consumers over the last 12 months suggests that they have warmed to booking travel online
Figure 4: Making online payments is still a minority pursuit among consumers
Figure 5: In 2003, the UK will be the largest market for online consumer payments. However, it will still be far smaller than the US
Figure 6: Credit cards are the most commonly used online payment method although paying by mail on receipt of invoice is very popular in Germany
Figure 10: A SWOT analysis of credit and debit cards
Figure 10: A SWOT analysis of online prepaid payment solutions
Figure 12: A SWOT analysis of P2P payment solutions
Figure 13: A SWOT analysis of eWallets
Figure 14: A SWOT analysis of mPayments solutions
Figure 14: A benchmarking exercise for online consumer payment solutions
Figure 15: The US will remain easily the largest market for online consumer payments. However, it will not be the fastest growing over the next five years
|
|
