Future Direction

There are dozens of payment service providers in the market, but expect to see more consolidation in 2004. In addition, expect the payment processors to encroach on each other’s market spaces, as multiple vendors try to extend their services to appeal to retailers, consumers, banks, and B2B trading partners alike.

Finally, payment services eventually will become a commodity, with only a few vendors handling this discrete portion of the EBPP cycle. The vendors that survive will be those that offer simple, reliable services at a good price or offer payment as part of a larger package of value-added services for EBPP. However, if you are thinking about EBPP, there’s no need to wait for a shakeout in the payment services arena; switching will be progressively simpler as the baseline services grow more commoditized and as standards become more firmly established.