E-commerce settles for established payment systems

Traditional payment systems continue to dominate B2C e-commerce. A host of innovative payment systems are pushing into the market. However, these systems often have a limited focus on niche segments. The only ones with mass-market promise are those innovative systems that take into account the particular features of B2C e-commerce, enjoy the support of established e-shops or service providers in payment transactions and can convey the unique added value that they offer.
Some innovative payment systems fail to address the typical business situation in B2C e-commerce. Numerous systems are only geared to settling micro-payments, but most e-shops do not ever charge such small amounts. In addition, innovative mobile payment systems advertise the advantages of their portability. However, this trump cannot be played in a typical online situation.
Payment systems operate in an intensively regulated, complex market environment. Policy and regulatory frameworks even outside the financial sector have a sustained influence on the market potential of payment systems. The net effect of political decisions on payment systems is not clear a priori. Given the substantial administrative expense involved, however, we believe that government regulation limits the potential of the small innovative systems in particular.