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Nidhi Taparia
Credit cards are getting a run for their money.
Digital wallets, prepaid cards and virtual money are allowing Indian
shoppers, wary of revealing their credit card numbers, the luxury of
shopping online without worrying about errant hackers.
Though credit cards continue to be the preferred choice of online buying,the equations are bound to change. The alternative options available are widely accepted (thanks to alliances between solution providers and e-merchants), simple to use and safe. In fact, some of these even let people with no bank account or credit card log on to the e-commerce revolution.
THE PLAYERS
Citibank's eCard, launched in August 2000, is the first net-only credit
card. It's a credit card in all respects, except for the absence of physical plastic. The user gets an eCard number, stipulated expiry date and a card verification number. The card can be used on any site worldwide where MasterCard is accepted. Credit limits range from Rs 3000 to Rs 12000. Best of all, signing up within the first two months of its launch can get you the card for as little as Rs 99 a year. Wait until later, and shell out Rs 250.
The card comes with a special insurance, which works like this: If you buy a product using the e-card and the price of the product falls below your purchase price within 30 days, the difference will be refunded. It also offers a six-month warranty, and cover against loss of the product through theft or fire within 90 days of purchase.
The e-card comes with a flexible credit limit, which is based on the usage of the card. Citibank credit card holders can also transfer a percentage of their credit limit to the e-card to increase their spending power.
For those who still prefer using credit cards for online transactions, Easy Netcom's Personal Key Number is a safe bet. On registration, Easy Netcom gives users a four-digit number in exchange for their credit card numbers. This can then be used for online purchases at select outlets, and the transactions are charged to the credit cards. The service is free. This enables you to use your credit card on the Net without revealing its number."Trusting credit card details to Web sites does not come easy to consumers.
And both merchants and consumers are unhappy with the uncertainty. This is
the best way to safeguard both," explains Vineet Singhal of Easy Net Com.
Prepaid cards are yet another option. SmartCC, to be launched in six cities
by September, offers denominations of Rs 100, Rs 250 and Rs 500, which can
be bought over the counter at SmartCC outlets. Open a Smartcc account at
www.smartcc.com, enter the value code on the cards you have bought into your
account, and shop for all the card is worth at any of its affiliates. It's
that simple.
"These cards remove the perceived danger of exposing credit card numbers and misuse. There are also smaller sums of money at risk, and it saves users the tedious paper
work that credit cards require,'' says Divyanshu Mishra, CEO Smartcc.com. The service is free.
The popular online store Fabmart launched its version of prepaid cards,
Fabmoney, for shopping on its Web site in June 2000. Fabmoney
can currently be bought at 60 cyber cafes, designated as Fabpoints. There
are plans to expand the reach to 150 outlets across six major cities.
Finally, there are the netbankers like ICICI Bank's Infinity and Citibank's
Suvidha, who offer netbanking customers real time payments towards online
purchases, apart from the standard netbanking features. Both Citibank Suvidha
and Infinity offer this at no additional cost to their existing account holders. The only difference is that Citibank Suvidha account-holders have a spending limit of Rs 50,000 per day.
The latter also offers a debit card with which users can shop at 4000 establishments across India.
WILL THEY, WON'T THEY?
So will these innovative payment solutions sound the death knell for plastic
on the net? "Credit cards lead the race, because these products (the new
payment solutions) have just been introduced in the last eight to 10 weeks,
but equations are changing. It's only a matter of time," says S Sudhkar of
Fabmart.com.
Divyanshu Mishra, CEO, Smartcc.com, echoes this sentiment. "Low credit card
penetration and security issues will propel alternative modes of payment.
Like the key to any retailing business, a good distribution set-up will win
the war, and Smartcc.com plans to move to 13 more towns by next year."
Targeting revenues worth Rs 1.5-Rs 2 crore within three months of launch,
Mishra believes he can leverage his online service to becoming an offline
venture. "Each card I sell creates a captive customer."
For Citibank, the e-card is just the first in a line of e-products. It does
not perceive a threat to its existing line of debit and credit cards, and is
aggressively targeting the 24-35 age group in major cities across the
country for its net product.
"There are a large number of people shy of making purchases on the net; they
are the ones we hope to convert, especially with the kind of interesting
features we offer," asserts Deepak Chandani, Business Manager, New Millenium Bank, Citibank.
Paying your way- The List
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