Sometime during the past six months it happened. The Net became an accepted way to purchase a credit card—nearly 11 million American adults have already applied (chart below). Maybe we got tired of dealing with all those solications in the mail. Maybe we thought is was cool to click on a banner and save money on a credit card. Maybe we were just curious. Whatever the reason, the Net has arrived and there’s no turning back. During the next decade, we expect the number of new card accounts originated via the Net to surpass those originated through traditional direct marketing.

Online* Credit Activity in U.S.

% of 51 million online adult personal users (left); number of users (right)

Sources: (1) Brittain Associates www.brittainassociates.com (404) 636-6155, telephone survey of 1,200 Internet users in Sept. 98, total projected base, 51 million adults using the Internet from home or work for personal reasons; (2) Of 3.3 million buyers, 2.6 million (77%) bought a mortgage, 0.77 million (23%) an equity loan; (3) Company 11/30/98. *Online includes Web, America Online, or any other PC/modem service

Even if credit cards are not a significant portion of your revenues, you should pay close attention to the rise of card applications online. After all, credit cards first mass marketed by Bank of America in 1958, are the original “alternative delivery” and “electronic payments” product. In just 12 months, more people have applied for a credit card online, than have used online banking in the past 15 years. We expect credit cards to be the lynchpin of a new category of bank account, the virtual transaction account (VTA). VTA’s will be free, work with any bank’s checking account, and exist entirely on the Web. For more information, refer to Creating the Amazon.com of Financial Services (OBR 6/97 ).