Shopping on the Internet takes off

Electronic commerce is catching on in the UK. New research from NOP says that 150,000 people have used the Internet to buy something in the past six months, and that half a million intend to do so in the coming six months.

Separately, an experiment with "electronic cash" launched by Mondex last July in Swindon has attracted 4 per cent of the town's population, but has already changed their behaviour as irrevocably as cash machines once did.

The NOP findings emerged from interviews with almost 1,000 people, which revealed they have used the global network to order goods such as flowers and wine using their credit cards. Future buyers plan to buy holidays, books, software, CDs, videos and clothes by ordering them through an electronic link to their PC. The amount spent so far by Internet buyers is believed to top pounds 1m.

NOP reckons that 6 per cent of Britain's adult population have logged on to the Internet in the past year.

The Mondex trial uses cards with an in-built computer chip. Owners can extract money, encoded as a stream of digital information, from their bank accounts and store it on the chip, and then use it to buy goods just as with cash, or transfer it over specially-equipped telephones to their bank, or even to another person or organisation.

Since the launch, almost 10,000 cards have been issued among the town's 190,000 population and pounds 250,000 has been spent. Mondex, which is a joint project by the NatWest and Midland banks with British Telecom, said more than 700 shops in Swindon now accept payment using the card.

Analysts have forecast the rise of electronic commerce for years, but before the Internet entered the public consciousness recently it seemed unlikely. Now, Mondex aims to capitalise on its acceptance. The cards can be used to pay for goods costing as little as 1p electronically. Because transactions do not have to go through a central bank, they incur virtually no cost.

"New forms of commerce will arise from electronic cash," said David Birch, director of Hyperion, a consultancy specialising in electronic commerce. "Then anybody with something to sell will be able to advertise it on the Net, and you or I will be able to send them money electronically, securely. That will be really exciting."