PayPal Swiping Credit Card Market

Fraud-wary consumers turn to alternative payment methods
By Jim O'Neill,  Newser User
Posted Nov 21, 2007 1:05 PM CST
Employees work at their workstations at PayPal, in La Vista, Neb., in this March 8, 2007 file photo.   (Associated Press)
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(Newser) – With identity theft jumping 50% since 2003, more people are turning from credit cards to Internet-based payment services like PayPal and Google Checkout for online purchases and, increasingly, everyday transactions, Business Week reports. Roughly 30% of US online shoppers used an alternative payment service last year. "Consumers are afraid to give out their credit-card information," said one retail expert.

PayPal, once used almost exclusively by eBayers, has branched out since the online auction company bought it in 2002; 45% of its business is now non-eBay related. It’s tops in the sector with a 24% marketshare and saw third quarter volume increase 34% over a year ago to $12.2 billion. Google Checkout, launched in 2005, holds 12% of the market. (Read more credit card stories.)