Online retail sales in 2007 reached $175 billion, a 21% increase over $144.6 billion in 2006, according to a new report from Forrester Research Inc.

This is the first drop in growth after years of around 25% growth. And according to Forrester Research projections, it will be far from the last. The firm forecasts: $204 billion in online retail sales in 2008, 17% growth over the previous year; $235.4 billion in 2009, 15% growth; $267.8 billion in 2010, 14% growth; $301 billion in 2011, 12% growth; and $334.7 billion in 2012, 11% growth.

“While on the surface, declining year-over-year growth percents for online commerce may represent a maturation of the e-commerce industry, it is important to also recognize the industry will add approximately $30 billion in additional revenue every year for the next five years. This is a sizable amount,” says Sucharita Mulpuru, principal analyst, retail, at Forrester Research, and lead author of the report, “U.S. E-commerce Forecast: 2008 to 2012.”

The growth rate remains significant. And a variety of factors are driving it. “E-commerce continues its double-digit year-over-year growth rate in part because sales are shifting away from stores and in part because online shoppers are less sensitive to adverse economic conditions than the average U.S. consumer,” the report says.

But challenges lie ahead. The report cites three major hurdles e-retailers face as the growth rate of online sales decreases: most consumers still prefer stores, the web channel is becoming increasingly seasonal, and online shoppers tend not to browse.

“The in-store experience is, for most customers, categorically better: It is immediate, tangible and social. And by shopping in stores, consumers can touch and feel items, avoid issues surrounding returns, and avert pesky shipping costs,” the report says. “And seasonal businesses have notorious challenges in managing every aspect of their business, from their merchandise to their employees to their cash flow. These conditions could prove to be choppy waters for online retailers as the industry matures.” And while web stores offer a wide variety of products, online shoppers generally are not browsers, the report adds. “While catalogs can often serve to drive customers to new products or stores,” it says, “the spear-fishing mentality of most online shoppers means there is less opportunity for retailers to effectively drive higher average order values or units per transactions.”

To continue to grow their sales as the overall growth rate of online sales decreases, e-retailers must devise new strategies, Mulpuru says.

“Growing international sales is one opportunity, especially given the weakness of the dollar at this point in time,” she says. “And retailers still need to fix the user experience, employing more tools like rich Internet applications or alternative payments or more robust cross-sell tools. The user experience online still is largely subpar and improvement there alone can help many e-retailers grow.”

This represents a 40 percent increase in the number of Internet shoppers over the last two years, the U.S.-based market research firm says.

“When Nielsen conducted its first global survey into Internet shopping trends two years ago, around 627 million people had shopped online,” Bruce Paul, Vice President of Customized Research at Nielsen U.S., says. “Within two years, this number has increased by 40 percent to 875 million.”

According to Nielsen’s survey, which was conducted in October 2007, over 85 percent of the world’s online population has used the Internet to make a purchase. Globally, more than half of Internet users made at least one purchase online in January 2008, Nielsen estimates.

Among Internet users worldwide, the highest percentage shopping online is found in South Korea. Nielsen says 99 percent of South Korean Internet users have shopped online, followed by the UK, Germany and Japan in joint second place, each with 97 percent. The U.S. came eighth, with 94 percent of Internet users having shopped online.

Credit cards are by far the most common method of payment for online purchases. Nielsen says that 60 percent of global online consumers used their credit card for a recent online purchase, while one in four online consumers chose PayPal. Of those paying with a credit card, more than half (53 percent) used Visa, Nielsen says.

Editor's Note: It's not that HomeATM is looking to prove that ATMDirect is Vaporware. It's more along the lines of settling, once and for all, who has the superior Internet PIN Debit/Credit technology, in terms of functionality AND security. This is precisely the reason HomeATM has offered to have the "PIN-OFF" implemented by a panel of payment specialists. In addition to it's technology, HomeATM also feels that it's patent is strong enough to hold up in the face of any and all scrutiny.

Regarding the libel statement. Libel is defined as a: "a written or oral defamatory statement or representation that conveys an unjustly unfavorable impression b: a statement or representation published without just cause and tending to expose another to public contempt.

There is nothing that has been said or written by HomeATM or this blog that is either "unjust" or "without just cause." I have, indeed, "questioned" the merit of their recent press release, but the reason for doing so is based on my background as a founding member of Pay By Touch. I "justly" questioned the merit of the press release because I was sent ATMDirect's confidential documentation, which was sent to all prospective bidder's prior to the ATMDirect auction. I saw absolutely no mention of "25 Global Internet PIN Debit Patents."

Of course, if there was indeed 25 global internet patents, and Iif missed that part in going and when going over the materials, I still believe it's "justifiable," (certainly not unjust) to question how strong they were since Acculink was able to obtain those patents (and the $500k-$750k worth of IBM Blade Servers)...for only $600k.

Although there is an occasional "deal" when acquiring a company through a bankruptcy auction, the purpose of an auction, especially a court supervised bankruptcy auction, is to obtain the highest possible bid. Therefore, the price the company receives at a bankruptcy auction is usually pretty close to it's value. So no libel here...just an "open invitation" to "PIN-OFF."

As I've stated before, ATMDirect claimed to "own PIN Debit on the Internet" so why would they not accept the challenge unless, as Payment Daily News Blog, so eloquently stated, they've got vaporware.

Personally, I don't necessarily believe ATMDirect is "vaporware", I simply am of the option that it's "nowhere" near the level of HomeATM's technology.

So...with that said, there's 23 days (and counting) remaining and we're still all waiting for ATMDirect to accept the PIN-OFF. They can name the time, and even the place, and do so by clicking here: ATMDirect Accepts HomeATM's PIN-OFF Challenge!

As the illustration on the left graphically depicts, PIN Debit is most secure form of debit and HomeATM has positioned itself as a prominent force as online debit is set to skyrocket on the web. The following is from Javelin Strategy and Research...

Alternative payments will account for an increasing percentage of U.S. online transactions by 2012, according to a recent study from Javelin Strategy and Research.

As I reported last week, Debit card online transaction volume will increase to $93.9 billion by 2012, up from $38.8 billion in 2007, accounting for about 26% of total U.S. online transactions, Javelin says. Online debit volume is expected to grow at a compound annual growth rate of 19.3% through 2012.

(Click the illustration to the right to enlarge it, then hit backspace to return)

The growth in online use of debit cards is primarily attributable to the growth in debit card usage in general, although younger consumers are opting for debit cards as a primary online payment option, Javelin says. The emergence of rewards programs linked to signature debit may contribute to growth, according to the study.

Javelin also estimates that online volume from e-mail payment accounts, such as PayPal, will increase to $40 billion by 2012, up from $7.8 billion in 2007, and will represent 11% of total online transaction volume. E-mail account volume, dominated by PayPal, will have a compound annual growth rate of 38% through 2012. Javelin forecasts that the average PayPal transaction at a retail site will reach $40 in 2012, up from $32 in 2007.

Stored-value products—merchant-specific gift cards and network-branded products—will grow at a 43% compound annual growth rate to $32.1 billion in 2012 from $5.4 billion in 2007, Javelin estimates. Stored-value cards will account for about 9% of total U.S. online volume by 2012, propelled by increased growth in multi-channel usage of in-store programs.

In addition, online private label payment card transactions are expected to total $23.7 billion by 2012, up from $5.3 billion in 2007, representing 7% of total online U.S. transaction volume, Javelin says. Private-label transactions will grow at a compound annual growth rate of 35% through 2012.

Editor's Note: If ATMDirect is going to "Own Online PIN Debit" as they mentioned in their "patently absurd" press release, I'd suggest they take little baby steps, the first one being "Acceptance of HomeATM's invitation for a "PIN-OFF" As of right now, they have 27 Days:6 hours and some minutes left to accept. ATMDirect...we're still waiting!