The Evolution of eCommerce, Innovation and Competition

By PYMNTS | November 23, 2010

PYMNTS University‘s Tim Attinger writes that commerce facilitation engines have evolved from basic merchant checkout functions and simple wallets into commerce generators, identifying consumer demand and driving purchase traffic and converting sales. Now, members of the PYMNTS community are chiming in with their thoughts:

Question: How has the evolution of eCommerce fostered innovation and competition?

Don’t be left out of the debate. Share your thoughts below on what’s next for eCommerce evolution.

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“eCommerce became an ‘enabler’ to commerce development. No longer the exclusive territory of financial institutions and governments. Private companies (SMB’s) could innovate and develop with a target market of ‘enabled’ consumers and B2B models, all while not needing an FI or Govt’s permission. Gift Cards, online malls, PayPals of the world, remittance and more, all have their origins at someone’s kitchen table. Not a Board Room.

This is all changing. Some say for the better, some say for the worse. All innovative activity in this space is ‘good’.

Good question!” – Duane Tough

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“Man, has it. Competition is extremely intense with deal sites flourishing, not to mention all sorts of comparison site. The biggest innovation perhaps is in consumer ratings and feedback, pioneered by eBay. My main gripe: It is amazing 16 years after the start of the commercial Internet that the card networks haven’t figured out how to make card acceptance online as easy as offline.” – David S. Evans

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“The earliest shopping carts and pass-offs to payment processors were crude compared to today. Today, major banks have smartphone apps to perform most of the online banking functions. Services, such as Verified by Visa, have filled a security gap involved in card-not-present transactions. eCommerce has proven no more insecure than face-to-face, card-present commerce which has seen significant security breaches. I think this is a sign of innovation and competition.

Still, the plastic card and the payment systems developed to support card transactions are the basic structure, so the innovation has been of the type that carries on the work of pioneers rather than setting a new structure in place.” – Scott Harrison

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“The Internet is a vortex that tends to suck in everything it touches… in particular, adjacent non-Internet models tend to become ‘legacy’ plays that get disrupted and gradually displaced by the lower-cost, more user-friendly, open, flexible, and interoperable alternatives that emerge from the Internet space. In a payments/transactions context, Internet = eCommerce. So, simply put eCommerce is the place to look for the future of models that will define the future of the payments space writ large. More specifically, PayPal is the primary nexus for these eCommerce-centric changes. Their vision for payments is very broad, and their developer ecosystem is large, dynamic and fast-growing.

As a further illustration, consider what the Internet has done to telecommunications, and how data services, mobile and VoIP have changed legacy models there.” – Roger Bass