Company's 80,000+ Online Merchants' Sales Explode
During Holiday Season; Fraud Concerns Still Cited as Most Important
Long-term Challenge
Mountain View, CA January 14, 2003 - Despite a 30 year record
low holiday retail sales period, online merchants' business exploded
and achieved new records, an analysis of VeriSign's more than 80,000
payments merchants revealed. VeriSign is currently the largest payment
service provider on the Internet, processing more than 25 percent of
all online merchants' Internet transactions.
The post-holiday season analysis revealed that VeriSign
merchants' total online payments transactions increased more than 75%
in 2002. Overall for 2002, consumers spent nearly $13.7 billion on the
Internet, according to Nielsen NetRatings.
High-volume VeriSign merchants also saw substantial
increases in transactions processed. The average dollar amount per transaction
for the top 50 VeriSign online merchants nearly tripled in 2002 increasing
from $43.91 in December 2001 to $123.85 in December 2002.
"In a year when overall holiday spending was
off because of macro economic conditions, our average merchant saw sales
increases of approximately 5 percent, which demonstrates clearly that
consumers trust the Internet as a secure method of purchasing products
and services," said Barry McCarthy, Vice President, VeriSign Payment
Services.
"Consumers are increasingly turning to the
Internet as a regular source for commercial transactions. The Internet
is an easy-to-use medium for consumers and it allows them to comparative
shop and most importantly save time and money in traveling to the mall,"
said Vincent Baker, analyst for Current Analysis. "A significant
barrier to consumer adoption, however, still remains online fraud. Security
that's built into the process, like VeriSign's, enables consumers to
concentrate on their personal objectives and not spend their time browsing
the Internet for safe Web sites."
VeriSign conducted a small sample survey of online
merchants in early January 2003 that found 59 percent of respondents
were still concerned, however, that fraud will continue to be a challenge
for continued Internet growth. "The payments industry needs to
ensure that Internet merchants and consumers each have the best tools
possible to protect themselves against fraud, and as the industry leader
we are committed to leading the way," said Barry McCarthy, Vice
President, VeriSign Payment Services. More than 80,000 online merchants,
the largest number of online merchants using any single Internet payment
gateway, rely on VeriSign's payment gateway services to process online
transactions.
According to the final Nielsen/NetRatings report
of 2002, shoppers devoted as much as 16 percent of their total holiday
shopping budget to online purchases during 2002. Consumers spent more
that $3.1 billion on books, music, videos and DVDs, $2.7 billion on
clothing and apparel, and $2 billion on travel. However, the fastest
growing categories for the season were toys and consumer electronics,
where online spending accounted for nearly $4 billion in online sales,
according to the Nielsen survey.
VeriSign is hosting an industry-wide payments summit
today in Palo Alto, California bringing together payment processors,
gateway providers, credit card providers, security experts, merchant
banks, industry analysts and other payment industry specialists to discuss
important industry trends and ways to improve online transactions. Discussion
panels include topics on: The Future of Alternative Payments and Billing;
Authentication and the Shifting Liability of the Merchant; Fraud and
Risk Management; and The Payments Industry - What's Next?
About VeriSign
VeriSign, Inc. is the leading provider of digital trust services that
enable everyone, everywhere to engage in commerce and communications
with confidence. VeriSign's digital trust services create a trusted
environment through four core offerings - Web presence services, telecommunications
services, security services and payment services - powered by a global
infrastructure that manages billions of network connections and transactions
a day. Additional news and information about the company is available
at http://www.verisign.com
Statements in this announcement other than
historical data and information constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements
involve risks and uncertainties that could cause VeriSign's actual results
to differ materially from those stated or implied by such forward-looking
statements. The potential risks and uncertainties include, among others:
VeriSign's limited operating history under its current business structure;
uncertainty of future revenue and profitability and potential fluctuations
in quarterly operating results; failure of the company to retain and
hire key executives, technical personnel and other employees; ; failure
of the company to successfully manage relationships with customers,
suppliers and strategic customers; network outages, network capacity
constraints or security breaches; failure of the company's customers
to accept new services or to continue using the products and services
of the company; and competition in the various markets serviced by the
company. More information about potential factors that could affect
the company's business and financial results is included in VeriSign's
filings with the Securities and Exchange Commission, especially in the
company's Annual Report on Form 10-K for the year ended December 31,
2001 and Quarterly Reports on Form 10-Q. VeriSign undertakes no obligation
to update any of the forward-looking statements after the date of this
press release.
VeriSign is a registered trademark of VeriSign,
Inc. Other names may be trademarks of their respective owners.
Contacts:
Media Relations: Patrick Burns, pburns@verisign.com, 703-948-4471
Investor Relations: Steven Gatoff, sgatoff@verisign.com, 650-426-4560
Worldwide Sites
