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.)