Internet Payments

Internet Payments

Recent years have witnessed substantial growth in the use of both Internet and electronic documents. Information is flowing more freely than ever before. Goods and services are now being bought and sold electronically. Increasingly, business communications are being conducted online and are adapting their operations to an electronic environment.

Internationally and in Canada, the widening application of the Internet in commercial transactions is evident. Current statistics reveal that $195.39 billion (CDN) in revenue was generated by global Internet commerce of which Canada accounted for 6.8% of the world share. By 2004 total global revenue from Internet commerce is expected to reach $3.9 trillion.

The potential growth for this industry is also bolstered by the fact that more than 55% of Canadians are currently accessing the Internet. Given the astronomical growth in this relatively new business phenomenon, it is important to assess its implications on the Canadian consumer. Undeniably, the most controversial policy issue affecting consumers and the one that has received the most attention is the issue of privacy.

In Canada, the federal government responded to this area of concern with the passage of Bill C-6 on April 13th, 2000. The legislation aims to protect the privacy of personal information on individuals held by the private sector, to ease electronic commerce and to give clear legal status to certain electronic documents. Although steps have been taken domestically, an international response is also necessary in order to alleviate any problems with cross-jurisdiction regulatory issues that may arise.

Consumer privacy issues are more evident now with the growth of Internet commerce technologies. Consumer concerns are heightened by the commercial advantage in exploiting personal information. In unregulated free markets the interests of individuals are invariably overwhelmed by commercial considerations. While most information on the Internet is free, personal information retains value both to individuals and commercial interests.

Instead of adopting traditional sources for consumer information collection (i.e. mail surveys), businesses are gathering personal consumer information through the Internet registration process and as a transaction is carried out. Jerry Berman, Executive Director for the Washington-based Centre for Democracy and Technology correctly points out that, "technologies such as 'cookies', written directly onto a user's hard drive, enable websites to collect information about online activities and store it for future use. Using cookies, companies can track a consumer's online activities, creating a wealth of behavioral and preference information. This information can be collected over multiple websites, potentially creating a rich dossier about consumers, including their preferences and their online behavior".

In addition to privacy concerns, there are also a number of other key policy areas to consider, as pointed out in the 1999 Organization for Economic Co-operation and Development (OECD) report Guidelines for Consumer Protection of Electronic Commerce. The report outlines several consumer protection issues that need to be addressed, while emphasizing the need for co-operation among governments, businesses and consumers. The report appropriately cites two key policy areas directly affecting consumers; the need for secure payment mechanisms and effective