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Study: More companies to buy online

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Business-to-business e-commerce will take off this year as companies migrate their purchasing processes to the Web.

In an online survey of 2,000 businesses by Thomas Register and Visa USA, 58.4% said they'd use electronic commerce for at least 25% of their purchases during the next 12 months, with 11.2% using it for half of their purchases.

Huge change from now

That's a huge change from the 2.9% who said they now go online for half their purchases, says Julianne Garry, director of Internet marketing for Thomas Register, New York.

Not only does the Register have its own Web site, but the company has a joint venture with General Electric Information Services, TPN Register, to deliver full electronic commerce.

Ryan Ross, VP-commercial commerce for Visa USA, Foster City, Calif., says security worries could scuttle the survey's projections.

"Some 70% of the buyers were concerned about security," he says. "My gut feel was b-to-b buyers would be less worried" than consumers about the problem.

In the b-to-b market, Visa is pushing its Visa Purchasing Card, designed to replace purchase orders by providing detailed receipts on every item and giving companies control of what cardholders buy with their cards. Mr. Ross says the results showed him Visa also needs to push its Secure Electronic Transactions solutions.

"It gives you an audit trail and a way to identify all the players" in a transaction, he says.

Secure Electronic Transactions uses digital signatures, or personal encryption keys, to identify buyers so they can't deny knowledge of their purchases later.

In that way, it acts like a signature on a credit card slip, and stolen credit cards have been a big problem for many Web merchants.

Phone still most popular

Despite the gains for the Internet, the survey found the telephone remains the most popular way to place b-to-b orders, with 60.2% support, and checks remain the most popular payment instrument, preferred by 78.8% of respondents.

But the phone's share will drop to 54.1% in 12 months, the survey found, with e-mail's share rising from 7.5% to 13.2%.

The Web's use is also increasing sharply, Ms. Garry adds, with 40.3% saying they've used the Web at least once in the last month, mainly for quick research.

"In study after study they tell us that they want to get onto the site, find what they need and get back to work," she says.

To Ms. Garry, this means easy navigation, good search tools and complete databases will do more to bring in business buyers than forums or chat rooms.

"It comes down to the old adage that `time is money,' " she says. "If you can make people's lives easier, they'll use it."

Thomas Register and Visa hope to repeat their study regularly, perhaps quarterly, "to spot-check how our audience perceives the online world," Ms. Garry says.

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