Communications and Technology Industry Research

According to a new report, The Alternative Payment Systems Industry in the U.S., published by market intelligence agency Packaged Facts, the dollar volume of online alternative payments grew by 33 percent to $37.3 billion in 2007 up from $28.1 billion in 2006.

 

Online money transactions and paperless bill payments are the alternative to traditional payment systems. Online payment systems are more secure and offer greater privacy than traditional payment methods, so they have become the choice of tech savvy consumers in the U.S.

 

According to the report, in 2003, when the traditional payments started to decline, the card and electronic payment systems witnessed an increase of 14 percent and 13 percent respectively. It is expected that by 2012, electronic forms will hold approximately 35 percent of the market while the cards will remain steady with about 33 percent share, according to Packaged Facts. By then, the share of paper forms will be reduced to approximately 32 percent.

 

It will be a win-win situation for both credit cards and alternative payment systems in the coming years. However, the competition among alternative payment systems is going to be fierce. A recent example to show the intensity of this competition is the expulsion of Google (News - Alert) Checkout from eBay’s auction Web site. eBay is the biggest endorser of PayPal; more than 90 percent of items sold through eBay accept PayPal checkout option. The ban on Google Checkout, according to eBay (News - Alert), is due to lack of evidence of reliability.

 

According to Tatjana Meerman, publisher of Packaged Facts, the world will witness the emergence of new alternate payment options other than PayPal.

 

"Companies such as Amazon and Google have seen the future growth and opportunities in the marketplace and are coming on board. Others, as diverse as Bill Me Later, OboPay, Verizon (News - Alert), Chase and Wachovia are all getting into the mix," said Tatjana Meerman.

 

Packaged Fact’s new report analyses paper payments, card payments, and electronic payments involved in both business-to-consumer (B2C) e-commerce market and consumer payments market. It also focuses on the activities of the leading players as well as the upstarts in the industry.