The recent launch of an E-Commerce Tax Credits Scheme by Malta Enterprise seems to have created interest among local businesses and spurred them to try to join the e-commerce bandwagon.

The aim of this tax incentive is to encourage and support small and medium-sized enterprises (SMEs) to acquire, develop and invest in web and e-commerce systems.

This tax credit applies to projects that enable business transactions over the internet, and is capped at €12,000 per project. Eligible costs must be directly related to the creation, development, or acquisition of new or significantly improved e-commerce systems including expenses incurred for upgrading or updating an SME's website. Local web design and e-commerce systems integrators are actively promoting this initiative to attract new clients.

To coincide with the launch of this scheme, Alert Communications, a local multimedia and web applications development house specialising in the creation of websites and e-commerce systems, has launched a new payment gateway solution, a service that enables the secure transfer of credit card funds from users on a website to a merchant account held with Bank of Valletta or HSBC (Malta).

The company said the payment gateway offers the highest level of payment account data security possible, and in fact it has been certified as PCI compliant. This means that it has met a comprehensive set of requirements developed by the PCI Security Standards Council, including American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa Inc., to help facilitate the broad adoption of consistent data security measures on a global basis. "The potential of the internet is undisputed, leading one to believe that most SMEs would be only too eager to jump on the bandwagon and start reaping the benefits. However, in recent years it has become apparent that a large proportion of SMEs in Malta have not seriously considered how the internet can change and improve their business," lamented Claudine Cassar, managing director at Alert Communications. "A considerable number have adopted basic technologies such as e-mail and a website, but appear to be totally unaware of other potential uses of the internet."

She said there are several reasons for the low adoption of e-commerce. Companies targeting locals do not give a high importance to e-commerce because they are physically located close to their clients, so they do not have a high incentive to invest in this technology.

Companies targeting overseas clients, on the other hand, are innovating more and adopting the technology. This explains why locals tend to shop online more frequently from foreign merchants than they do from local ones. It is often quicker to visit a local supplier and purchase the product from the physical establishment - this has the added advantage that they can check the goods physically before purchasing them.

Others, on the other hand, have embraced more advanced internet technologies wholeheartedly, and have totally transformed the way they operate, using the internet to overcome the barriers that their location on a small island imposes.

"The relatively high investment required to set up a good e-commerce portal has acted as a deterrent - something that has now been removed by the e-commerce tax credit scheme.

"Now that investments up to €12,000 are refunded, more and more businesses are interested in trying out the technology, and once they start reaping the benefits, they will fully understand the potential of the internet," stressed Ms Cassar.

More information on the E-Commerce Tax Credits Scheme at http://support.maltaenterprise.net/index_files/Page1672.htm.