PALO ALTO, CALIFORNIA, U.S.A., 1996 SEP 6 (NB) -- By Richard Bowers. By the year 2000, consumers, businesses, governments, and educational institutions worldwide will use electronic cash (e-cash) for nine billion payment transactions. According to a new study by Killen & Associates, this increase in e-cash will pose a great threat to some of the biggest institutions in the world.
The report specifically highlights the risk to the retail and banking industries. Speaking to Newsbytes, a spokesperson for Killen said that the report, which will be issued later this month, gives little solace to the problems facing traditional retail companies. The report does however, say that the banks can regain the leadership position in payments by moving quickly to leverage their payment transaction infrastructure to fully support e-cash.
"By 2005, e-cash transactions will escalate to almost 30 billion," stated Michael Killen, president of the market research firm. "Banks must act quickly to leverage their position in payment services. Non- banks see this as a new opportunity to carve further market share away from the banking industry. All will compete for new revenue streams including Internet-based micropayments."
The report uses a very broad definition of e-cash including among others; secured debit cards, phone cards, electronic checks, ATM transactions, point of sale loans, and automated tolls.
Using this broad definition they estimate that in 1995 there were 536 billion non e-cash transactions worldwide compared to only 1 billion e-cash transactions, or about .0019 percent. By the year 2005, of a total estimated 1 trillion transactions, the report predicts 3 percent or around 30 billion transactions will be e-cash.
"The impact of e-cash will be widespread on both banking and commerce," Killen added. "Opportunities will open for financial and other product and services players, including ATM vendors such as NCR, Diebold, and IBM; credit card authorization firms, including First Data, Total Systems, Equifax, and National Data; ATM/POS terminal manufacturers and network suppliers, including bank-owned networks, American Express, Deluxe, ACS, and VeriFone; and cash handling/cash management services firms such as ADP, GEIS, National Data, and Brinks. Software firms that understand the enormous system integration opportunities of adapting legacy systems to on- line, secured environments will also benefit from the need to support e-cash transactions."
The report will include forecasts of the overall payments environment and the impact of e-cash on cash, checks, credit cards, and other electronic payment systems though the year 2005. It will also have a section on the opportunities for new business, dislocations, and threats to existing businesses, with emphasis on acquisition and alliance opportunities.
"E-cash provides the necessary payment options to support new and low-cost products and services, including micropublishing," Killen continued. "Information services such as AC Nielsen, Dun & Bradstreet, and Wall Street investment and advisory firms will fill their clients' needs for customized news. This will lead to a new understanding of personal and commercial buying patterns, wants, and needs. Individual consumer purchase, transaction, and life-style profiles will be developed. Advertisers can then use this information to target market-customized advertising and marketing programs."
(19960906/Press Contact: Jules Street, Killen & Associates, 415-617- 6130)
_______________________ Regards, Nothing is so strong as gentleness, and nothing is so gentle as true strength. -Ralph Sockman Joseph Reagle http://rpcp.mit.edu/~reagle/home.html reagle@mit.edu E0 D5 B2 05 B6 12 DA 65 BE 4D E3 C1 6A 66 25 4E