Summary

E-commerce needs to be differentiated between Business to Business (B2B), and Business to Consumer (B2C), as each transaction has different needs and characteristics. Confidence is the key issue to increasing e-commerce volumes, and banks are the natural candidates to becoming trusted third parties between buyers and sellers. New technologies in the areas of security, authentication, smart cards and retail payment networks are being developed at a European level, and together with the EU's internet strategy, the continent is trying to position itself for the challenge of e-commerce in the 21st century.

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Introduction

The term 'e-commerce' is widely used whenever a commercial transaction is made over the internet: in other words, e-commerce refers to the process of "on-line" buying and selling of goods and services. It goes without saying that e-commerce can only accelerate if consumer/business confidence exists and in particular in the payment part of the chain.

A basic distinction should be made between business-to-consumer e-commerce, also referred to as B2C, where card payments have a strong comparative advantage for the integration of the payment value chain, and business-to-business e-commerce, sometimes referred to as B2B, where the nature of the payments requires a more sophisticated payment mechanism. The reality though is rather more complex.