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Online Payment Options

Credit cards aren't the only way to pay online these days.

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This story appears in the October 2006 issue of Entrepreneur. Subscribe »

In 2000, accounted for more than 90 percent of online payment volume-but by 2009, less than half will come from credit cards, according to a May 2006 study by -based Celent LLC. The gradual shift away from is due in large part to the fact that alternative payment options are typically less expensive for merchants to use.

"[It] is unsustainable for credit cards to maintain their dominant presence [in] the model as it is today because it is simply too costly for e-tailers," says Dan Schatt, a senior analyst at Celent. In addition, "There are large numbers of consumers sitting on the sidelines, not willing to make an online transaction because they fear their credit card information-or any information they leave with the merchant-will be misused."

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