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E-Cash Poses Worldwide Banking Threat - Report 09/06/96
>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
>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
>"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-
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
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