REPORT HIGHLIGHTS

• The purchase of goods and services over the Internet will rise from $325 billion in 2001 to $3.5 trillion in 2006 at an average annual growth rate (AAGR) of 60.4%.
• The B2C market sector will increase from $60 billion to $206.2 billion, growing at an AAGR of 28%.
• The B2B sector will grow at an AAGR of 65.1%, rising from $265 billion in 2001 to $3.3 trillion in 2006.
• The fastest growing market for B2C transactions is for person-toperson, the great preponderance of which are auction related.
• The primary driver in B2B activities is the back end of electronic bill presentment and payment applications.

REPORT SCOPE

INTRODUCTION

STUDY GOAL AND OBJECTIVE

The goal and objective of this study is to identify and analyze the customer and payment alternatives relative to the purchase of goods and services over the Internet. These payment alternatives under various scenarios will be explained and quantified.

REASONS FOR DOING THE STUDY

The use of the Internet for transacting between es and consumers (B2C) and B2B is fast becoming a viable channel for the convenient and cost efficient method of procuring goods and services. The B2B market sector in particular will see significant growth in that by 2006, the transacted over the Internet will exceed 25% of the GDP. Because of the growth in the use of the Internet as a transactional channel, it is important to understand how these activities will affect the consumer.

CONTRIBUTION OF THIS STUDY AND FOR WHOM

This study will quantity B2C and B2B Internet dollar volume through 2006. Furthermore it will show trends in a number of areas as the e-commerce world goes forward. The results of this study will be of value to consumers; merchants; the corporate world (especially financial services companies); state, local, and federal governmental agencies; vendors and suppliers; and economists, teachers, students, consultants, and investors.

SCOPE AND FORMAT

The study will present quantifiable and narrative evidence of the importance of e-payment based alternatives through 2006. The report is presented in a modular format to give readers the full flavor of the e-payment phenomenon.

METHODOLOGY

The methodology utilized in this study is as follows:

• Determine current state of e-commerce environment
• Ascertain growth of e-commerce through 2006
• Determine major categories of growth in e-commerce
• Ascertain payment alternatives for online purchase of goods and services
• Determine and describe those companies providing e-payment alternatives
• Describe the mechanics of e-payment alternatives
• Quantify the dollar volume of e-commerce expenditures for each major e-payment alternative

Note: Average Annual Growth Rate (AAGR) percentages calculated through year 2006 are based upon a starting date of 2001 (five years) unless otherwise noted.

INFORMATION SOURCES

The following sources were utilized in the completion of this study:

• Company annual reports
• Company and organization press releases
• Material from the following organizations:
• FDIC, Division Research, and Statistics
• The Census Bureau
• U. S. Dept. of Commerce
• Statistical Abstract of the U.S.
• The Smart Card Alliance
• General Services Administration
• New York ACH
• U.S. Industry & Trade Outlook 2000
• Interviews with company officials of pertinent companies and organizations

RELATED REPORTS

• IFT013B Electronic Commerce
• G-132N Credit, Debit Cards
• G-203 Electronic Commerce
• G-204 Electronic Card
• G-100N Smart Cards
• G-220 Banks and Non-Banks: The Changing Industry
• G-225 Electronic Money
• G-257 The Changing Card

REPORT TOC