Maltese e-commerce providers cautiously optimistic
Maltese e-commerce providers say there are several benefits both for them and for the consumers in providing their services and products online but they face a few problems, such as placing the process online, integrating the new system with the old...
Maltese e-commerce providers say there are several benefits both for them and for the consumers in providing their services and products online but they face a few problems, such as placing the process online, integrating the new system with the old one, linking with banks, and the pricing of the e-commerce solution.
There is also no complete consensus on whether e-commerce in Malta will continue to grow across the board, whether only in some sectors or that the rate of growth will be affected by the peculiarity of the local market.
These views were shared during 25 in-depth interviews with providers of e-commerce services by Ernst & Young on a commission of the Malta Communications Authority (MCA).
Carried out between December 2006 and January 2007, these interviews complement a national survey on individual e-commerce use in Malta carried out by the same company in September 2006. This national survey showed that while 57 per cent of Maltese inhabitants have internet access, only 48 per cent of those having such access opted to purchase online (including e-shopping, e-government and internet banking). Slightly less than half (45 per cent) of those engaged in e-commerce make use of e-government services.
The in-depth interviews were carried out with commercial banks, internet service providers (ISPs), e-commerce service providers (ESPs), "traditional" businesses and communications companies amongst others. They have been providing e-commerce services for an average of 4.5 years.
The questions asked covered such topics as the nature of the e-commerce service provided, the setting-up of the platform, the benefits derived from e-commerce, the promotion of e-commerce, problems encountered, certification services, security issues, payment and legal issues, delivery and packaging, the development of mobile commerce (m-commerce) and how they see the future of e-commerce.
The companies interviewed named several reasons for entering the market for the provision of electronic commerce services and products. These were • to remain competitive; • to fill a void in the local market; • to bolster the image of the company; • to meet client demand, especially given current local trends in internet usage; • to save in operating costs; • to export to foreign markets; • to facilitate payment matters; • to circumvent infrastructural problems being faced in product delivery/sales (such as lack of parking).
Indeed the reasons were compounded by the benefits that e-commerce brings to their organisation and to their customers. On a user/consumer level, the benefits are
• a faster service; • increased number of products/services; • time saving used for other purposes such as leisure.
On a provider/company level the benefits include • the reduction in costs and human resource savings; • a quicker turnaround and faster processing of clients requests; reduction in manual transactions; • reduction in debtors; • increased and improved public company profile.
However, the companies mentioned several difficulties they had to meet in setting-up their e-commerce system. The major difficulties were met in
• bringing all the necessary stakeholders on board; • setting up initial talks with third parties; obtaining a merchant ID from banks could prove to be lengthy; • placing the whole process/solution online; the availability of electronic IDs to access certain e-government services; • integrating current company system with internet based banking systems; • the pricing the e-commerce solution and payment gateway.
Considerable interest was shown towards the introduction of a Maltese certification scheme, although mechanisms need to be put into place in order to ensure that the prescribed objectives are met.
Asked about security issues, fraud did not emerge as a main concern for respondents. Ernst & Young said all respondents give importance to the security of their systems and utilise various technological tools, including encryption, authentication protocols and virus checks.
The companies interviewed acknowledged that e-commerce in Malta has not yet taken off as a technology popular with the public. This could be due to perceived or actual high charges, the medium's characteristics (relatively small screen size of devices), and resistance by clients to shift to this technology. However, increased development and usage of sophisticated devices might make e-commerce more attractive to the end consumer in the future.
The companies interviewed also highlighted the fact that government is considered to be an important player in the continued development of the economy, including the electronic services market. It should facilitate e-ID, provide public internet access, provide assistance to SMEs, provide financial incentives for e-commerce, and make e-commerce legislation more friendly.
Almost half of the companies interviewed think the sector will definitely grow, however the rest either think it will probably only grow in certain sectors such as e-betting and retail or it is unlikely to grow at the same rate as that experienced abroad due to Malta's relatively small size.
The factors that should bring about a growth in e-commerce are • convenience; • greater availability; • simplicity; • security; • speed of service; • lower costs and better prices; • the fact that local awareness is still at its early stages.
There is also no complete consensus on whether e-commerce in Malta will continue to grow across the board, whether only in some sectors or that the rate of growth will be affected by the peculiarity of the local market.
These views were shared during 25 in-depth interviews with providers of e-commerce services by Ernst & Young on a commission of the Malta Communications Authority (MCA).
Carried out between December 2006 and January 2007, these interviews complement a national survey on individual e-commerce use in Malta carried out by the same company in September 2006. This national survey showed that while 57 per cent of Maltese inhabitants have internet access, only 48 per cent of those having such access opted to purchase online (including e-shopping, e-government and internet banking). Slightly less than half (45 per cent) of those engaged in e-commerce make use of e-government services.
The in-depth interviews were carried out with commercial banks, internet service providers (ISPs), e-commerce service providers (ESPs), "traditional" businesses and communications companies amongst others. They have been providing e-commerce services for an average of 4.5 years.
The questions asked covered such topics as the nature of the e-commerce service provided, the setting-up of the platform, the benefits derived from e-commerce, the promotion of e-commerce, problems encountered, certification services, security issues, payment and legal issues, delivery and packaging, the development of mobile commerce (m-commerce) and how they see the future of e-commerce.
The companies interviewed named several reasons for entering the market for the provision of electronic commerce services and products. These were • to remain competitive; • to fill a void in the local market; • to bolster the image of the company; • to meet client demand, especially given current local trends in internet usage; • to save in operating costs; • to export to foreign markets; • to facilitate payment matters; • to circumvent infrastructural problems being faced in product delivery/sales (such as lack of parking).
Indeed the reasons were compounded by the benefits that e-commerce brings to their organisation and to their customers. On a user/consumer level, the benefits are
• a faster service; • increased number of products/services; • time saving used for other purposes such as leisure.
On a provider/company level the benefits include • the reduction in costs and human resource savings; • a quicker turnaround and faster processing of clients requests; reduction in manual transactions; • reduction in debtors; • increased and improved public company profile.
However, the companies mentioned several difficulties they had to meet in setting-up their e-commerce system. The major difficulties were met in
• bringing all the necessary stakeholders on board; • setting up initial talks with third parties; obtaining a merchant ID from banks could prove to be lengthy; • placing the whole process/solution online; the availability of electronic IDs to access certain e-government services; • integrating current company system with internet based banking systems; • the pricing the e-commerce solution and payment gateway.
Considerable interest was shown towards the introduction of a Maltese certification scheme, although mechanisms need to be put into place in order to ensure that the prescribed objectives are met.
Asked about security issues, fraud did not emerge as a main concern for respondents. Ernst & Young said all respondents give importance to the security of their systems and utilise various technological tools, including encryption, authentication protocols and virus checks.
The companies interviewed acknowledged that e-commerce in Malta has not yet taken off as a technology popular with the public. This could be due to perceived or actual high charges, the medium's characteristics (relatively small screen size of devices), and resistance by clients to shift to this technology. However, increased development and usage of sophisticated devices might make e-commerce more attractive to the end consumer in the future.
The companies interviewed also highlighted the fact that government is considered to be an important player in the continued development of the economy, including the electronic services market. It should facilitate e-ID, provide public internet access, provide assistance to SMEs, provide financial incentives for e-commerce, and make e-commerce legislation more friendly.
Almost half of the companies interviewed think the sector will definitely grow, however the rest either think it will probably only grow in certain sectors such as e-betting and retail or it is unlikely to grow at the same rate as that experienced abroad due to Malta's relatively small size.
The factors that should bring about a growth in e-commerce are • convenience; • greater availability; • simplicity; • security; • speed of service; • lower costs and better prices; • the fact that local awareness is still at its early stages.