Credit Cards Online Information

Worried about making credit card purchases over the Web? A batch of new companies wants you to send cash via e-mail instead. It's called the direct-payment industry -- and the big banks and portals are getting in on the action.

Standing at the podium during a recent presentation, Peter Thiel held up a $20 bill. Waving it high in the air, Thiel, co-founder of an online payments company called PayPal, asked the 200 "futurists" assembled for the 2000 Foresight Conference, "Would you like this money?" After the resounding chorus of yesses died down, he polled the audience about when they would like to receive it, and how. The answers -- that they wanted it now and they wanted it with no strings attached -- came as no surprise to Thiel, whose wildly popular service allows anyone with an e-mail account to send cash over the Internet to anyone else with an e-mail address.

Thiel's $20 bill gambit had a simple purpose: to demonstrate the power of instant cash. "People go nuts over money," says Thiel. "It's amazing how it gets people's attention." But it also made a larger point, demonstrating the case for PayPal and the gang of copycat services that have spontaneously generated over the last year.

Launched in October 1999, PayPal signed up 1,000 users in its first month and today has more than 4.5 million. Riding on the success of eBay -- 50 percent of whose users now accept PayPal -- it bills itself as the fastest-growing financial application in the history of the Internet. Originally an independent upstart, it's now owned by once-rival X.com, and its Web site is already the No. 1 visited site for personal finance, garnering 10 percent of all traffic in the category. Despite the rapid growth of direct pay -- also called person-to-person or p-to-p systems -- the Internet services still have not hit the radar of the great mass of consumers. Unless you're an eBay fanatic or in the consumer credit business, you may not even know about PayPal and its rivals, which include BillPoint, MoneyZap and Yahoo's PayDirect. Credit cards are still the tool of choice for most Web shoppers. Consumers spent about $53 billion shopping online last year, with nearly $9 out of every $10 covered with a credit card.

# posted by Medical Information : 5:38 AM