Talk about piling on. Just as payments industry players were absorbing eBay’s eye-popping $945 billion acquisition of Bill Me Later this week, Celent unleashed a report Tuesday predicting that alternative e-commerce payment schemes threaten to take away up to $1.7 billion in potential transactions from card brands and issuers by 2015.

PayPal, Bill Me Later, Google Checkout and Amazon Payments are the lead mercenaries who will diminish credit cards to under 50 percent of total online transaction volume within two years, compared to more than 60 percent in 2005. Even with rising debit card usage, all card-based volume will be around 70 percent in 2010, according to Celent (down from nearly 80 percent currently).

Despite their dominance and acceptance ubiquity, Celent notes, “payment cards have a number of serious weaknesses.” Chief among them is security, as 40 percent of consumers dislike providing credit card information online, despite new PCI security standards from the card industry and the long-standing zero-liability fraud protections in place for unauthorized transactions. Then there are the merchant irritations with interchange, which have prompted wider e-store adoption of Bill Me Later and Amazon Payments options on checkout pages and encouraged wider use of ACH-based transactions.

What makes many of the alt-payment companies stand out, says Celent, is the role they play in encouraging purchases. Consumers attracted by discount or promotional financing through the preferred payment method, discounts, and—most prominently with Google—closely tying together payment services with marketing opportunities.

“Alternative payments players are starting to differentiate themselves via their ability to induce payments,” wrote senior banking analyst Red Gillen.

“In other words, those players that are likely to succeed and pose the greatest disruptive threat to payment cards are those that have evolved from simply enabling payments to actually creating sales lift.”

Editor's Note: An example would be taking the savings derived from HomeATM's lower PIN Debit interchange rate and applying it towards a loyalty-rewards platform in combination with an existing platform.  By participating in a co-op rewards platform, the offerings to consumers would be more attractive than a single rewards offering.