Banks hold back SMEs in e-commerce race.

Small businesses are being held back from using e-commerce technology because of bank rules that hamper facilities for making payments on websites, according to the Institute of Directors. Of the 615 company directors surveyed by the IoD, only 35% of those companies with websites allowed customers to use them to place orders. The IoD said the obstacle to companies offering Web payment facilities is the difficulty they encounter making arrangements with banks. Different rules apply when a credit card user is not present at the moment of transaction, but, according to the IoD, banks are waiting for rules to be clarified before they set up more facilities for business. Richard Baron, deputy head of the policy unit at the institute, said: ‘This is proving to be a major impediment to the development of e-commerce in the UK, while the United States forges ahead. The institute has been pressing for rapid progress on this issue, and will continue to do so.’ The IoD survey also found that lower call charges were a priority for businesses expecting to increase their use of the Internet. Baron said: ‘The IoD’s members are increasingly aware of the importance of e-commerce. We must work to ensure that everyone is fully aware, and to remove the obstacles that are preventing British business from taking full advantage of the opportunities.’

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