E-commerce without cards will cost customers more

Security-conscious Cyber shoppers will soon be able to buy goods online without ever divulging their credit card details, following the launch of a new service that charges customers via their phone bill.

The joint venture between UK telco Cable & Wireless Communications and the US company eCHARGE aims to circumvent the usual step of posting credit card details by giving users the option of charging services to their phone bills instead. It is hoped the new service help allay consumer fears about the perceived threat of credit card fraud on the Net.

But the cost of this service may be prove prohibitive. To use the payment scheme, customers click on an icon to freeze their Internet connection and go online with eCHARGE, where they will be warned how much the call will cost. This is where consumers may log off -- calls are charged at premium rates, unlike the Internet connection which is billed at a local rate. A spokesman for C&W predicts costs will range from 10p to £1.50 and believes the system will "find its own level". Once the transaction is complete, the customer can return to their normal browser or continue browsing other linked sites with eCHARGE.

C&W sees no conflict between this service and that of the ISPs. "Things are moving towards free Internet services. This is a complementary strand, not rocket science. It will give Web sites the opportunity to generate income from the Net," said a spokesman.

Initially, the service will be small scale, used mainly for subscription charges for newsletters or downloading music, but C&W believes it has potential to be used for larger scale impulse buying because it simplifies the online purchasing process.

Greater co-operation between telecoms companies and service providers is essential if e-commerce is to be fully exploited, according to managing director of eCHARGE Mark Heraghty. Speaking at the European launch of eCHARGE, he said: "This venture creates a completely new avenue for web commerce which will benefit consumers, service providers and telecoms companies. It is an important step forward in developing consumer confidence in Web commerce."

The UK scheme is due for launch in the new year.