Euro to aid E-commerce, experts say
March 8, 1999
by Kristi Essick
(IDG) -- While most wouldn't disagree that Europe is behind the U.S. when it comes to the adoption of electronic commerce, things may get an additional boost here in the next few years due to the gradual phase-in of the euro, said several industry members yesterday in Brussels.
The euro was introduced for some banking and financial transactions in 13 member states in January and will become the standard currency in 2002.
Essentially, the euro will take away the barrier of multiple currency transactions that today holds back some users from shopping online and some vendors from launching electronic-commerce sites, said several panel members at a conference called "Cashing in on the Internet: Electronic Business and the Euro."
One of the main outcomes of the introduction of the euro will be price transparency. The Internet will be an ideal medium in which to sell goods and services in euros because consumers and businesses will be able to easily compare prices from vendors in different countries, panel members said. The Internet and electronic commerce, coupled with the euro, are going to put more pressure on companies to equalize their prices across the board in Europe, agreed Hugo Lunardelli, European marketing manager at Microsoft Corp.
"Without the Internet, the euro wouldn't have had as big of an impact that it will have," Lunardelli said.
However, the largest impact on electronic commerce coming from the euro will be in the business-to-business realm, Lunardelli said. With the physical problem of high shipping costs across borders in Europe continuing to persist, many business-to-consumer transactions will continue to made for the most part within countries, he said. But for multinational companies doing business-to-business transactions, the euro will simplify billing and create pricing pressure for goods.
By 2000, some 50% of trade between businesses will take place on the Internet, predicted Timothy Fenoulhet, a member of the European Commission's Directorate General for Information Society. Doing business in the euro will help European companies to have a more global reach, some panelists said.
In fact, the euro will be one of the largest drivers of electronic commerce in the supply chain in the years to come, at least equally as important to developments in bandwidth, digital signatures and shipping solutions, said Scott Herren, managing director of logistics and electronic commerce at Federal Express Corp.
Judith Rinearson, group counsel for stored value and smart card products at American Express Co., agreed. "The euro is a wonderful opportunity to introduce a unified, electronic payment system," she said.
However, the euro will also have an impact on business-to-consumer transactions, several speakers said.
If the euro can become an accepted online currency, it could challenge the supremacy of the U.S. dollar for consumer electronic-commerce transactions, said Robert Caplehorn, company secretary and general counter for Mondex International. An "electronic euro" will drive the global force of the currency and encourage more Europeans to purchase goods on the Web, he said.
Business-to-business electronic commerce will be first to benefit from the introduction of the euro, most of the experts agreed. But by 2003, when the euro currency will be in full-scale circulation throughout participating countries, it will also begin to greatly encourage business-to-consumer electronic commerce, said Jacques-Henri Lafitte, an adviser in the cabinet of Europena Union Commissioner Yves Thibault de Silguy, financial and monetary affairs. With the euro and the Internet both growing in acceptance, Europe is at the beginning of a new era of a truly EU online marketplace, he said.
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