Ecommerce's Monthly Talking Point: November 1998

      I must be wrong about the banks and ecommerce...

      Unless I've missed something, the banks are missing a huge opportunity in electronic commerce. I don't mean banking over the web; there are plenty of fine examples of online banking.

      Nor do I mean the various exotic cash replacements such as Mondex and Visa Cash. No, the big opportunity for banks is in taking the individual retailer's transactions online. It's a service opportunity that's ripe for the taking.

      The British refer to retail banks as 'High Street banks', a term that reflects their close association with local consumer businesses. Banks were literally the corners of traditional shopping areas, and the bank's staff knew the traders and shoppers who used their services.

      Over the years a wide range of products and services were developed to meet the needs of that commercial constituency, including credit card handling.

      So why is it that a small business looking to extend its market reach through an automated payment channel - the net - can't rely on its bank to offer that service? It's especially crazy when the preferred means of buying goods and services over the web is credit card.

      By definition, any web-enabled credit card transaction service must interface to a bank's merchant services. If another agency performs the service of capturing the card details and forwarding them to the bank, then it can charge a transaction fee based on purchase value even though the value it adds is in secure data capture, not in funds transfer or credit extension.

      That's nice work if you can get it, but it's distinctly odd that the leading banks don't offer the same service. They have proven expertise in the technology, from encryption to counter-top funds transfer terminals. They have extensive, reliable networks. They have the best knowledge of the needs - and ability to pay - of small businesses. Above all, they're who you'd expect to take your transactions online.


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      © 1998 Paul May