Visa's online sales soar

Online spending is soaring, but is still a small part of the overall retail pie

European consumers are taking their love of shopping online, said credit card giant Visa, which says its cardholders did more than twice as much business through the internet at the end of 2002 than a year before.

During the October to December quarter, 2.57bn euros (£1.70bn; $2.76bn) was spent online using Visa cards, a gain of 136% over the previous year, the firm said.

Data showing how the rise in online usage compared with overall sales growth - and how big a slice of the Visa pie overall online sales constitute - were not yet available, a spokeswoman told BBC News Online.

VISA'S ONLINE GROWTH

Total transactions

Q4 2001: 14.5 million

Q4 2002: 31.1 million

Sales volume

Q4 2001: 1.1bn euros

Q4 2002: 2.6bn euros

Fastest growing sector:

Tourism/Entertainment, +531%

Slowest growing sector:

Services, +57%

The strongest growth was found in travel and services, with 13 times as much being spent on online flight bookings, and more than nine times more than last year on car rentals.

But analysts said the sheer size of the gains for travel, compared with the overall figure, suggested they made up a relatively small part of the 2.5bn euro total.

Competition

Visa declined to reveal a breakdown of how much in monetary terms the various sectors were contributing.

"We don't want to give information to our competitors about where we're biggest and where we're not," the spokeswoman said.

But she did say that sales in the third quarter of 2002 were 15% up on the previous year.

"The norm is about 15-20%, and we're looking for at least 15% this time," she said.

Trouble in store?

Both Visa and its main competitor, MasterCard, are keen to trumpet their successes in the online sphere, especially since fears linger about the security of online transactions.

On top of that, both are facing massive lawsuits in the US and regulatory action in Australia.

In the US, the trouble stems from a class action lawsuit alleging that both companies forced retailers to accept debit cards, with higher transaction costs, through their dominance of the credit card market.

In Australia, meanwhile, the Reserve Bank is planning to slash inter-bank handling charges, cutting hidden fees and allowing retailers to pass on more costs direct to the customer.