Love or hate the term Celtic Tiger, the Irish economy has undeniably grown by leaps and bounds in the last few years. But when it comes to another economic cliche, the e-commerce hub of Europe, the evidence is less obvious and the outlook unsure.

Such was the opinion among a group of leading businesspeople attending a recent ecommerce course in Dublin City University, who were largely underwhelmed at the Republic's e-commerce progress. They identified two particular bottlenecks on the road to any such hub: the need for improved telecommunications infrastructure, and the need for more support from the banks.

With deregulation and the impending sale of Telecom Eireann, development of the telecommunications infrastructure is now a market issue, and recent announcements by both Telecom Eireann and UUNet (the MCI WorldCom subsidiary) indicate that the Republic is on the way to getting highcapacity digital pipes directly connected to the rest of Europe, a prerequisite for any centre of e-commerce development.

But business leaders are still worried. Mr Kieran McDonnell, Internet customer unit manager for Microsoft Ireland, speaking from personal experience, said: "It is unbelievable the complete lack of [e-commerce] progress in Ireland. We are only dabbling in it."

Mr McDonnell said that while most ecommerce revenues were in the business-tobusiness area, successful business-to-consumer e-commerce would require a concerted effort by business communities and financial institutions.

Although Mr McDonnell prefers to encourage progress, others are more openly critical, especially of the banks. Speaking of how the banks deal with e-commerce proposals, the manager of one e-commerce venture, who preferred not to be named but who had worked closely with the banks, said: "They say they have initiatives, lots of small ones, but they have nothing at a coherent level driven from the top."

Another business leader, Mr John Murphy, the managing director of software developer DDSI, said bluntly that he felt ecommerce in the Republic was 90 per cent hype. "It is a nice aspiration," he said, "but I don't see any emphasis from the banks."

DDSI, based in Cork, employs 31 people and develops mainframe software for its parent companies in the US, a catalogue company called Fingerhut and a dental insurance company called Deltadental. As such, it does not need e-commerce services in the Republic, but Mr Murphy said the ease of doing business in the US was the envy of Irish software companies. Fingerhut, for example, had its own bank and credit cards, he said. Credit cards are at the heart of the complaints, or more specifically the ability to process transactions online. Called "acquiring", this is central to a lot of ecommerce, both on the retail side and on the more lucrative business-to-business side. One successful Irish start-up, which is working totally in the e-commerce sphere, is Trilog.ie (pronounced Trilogy), which employs 30 people in Dublin. Partnering with Consolidated Publishers Inc (CPI) in the US, Trilog.ie prints and ships documentation for large technology companies who wish to outsource the ordering and selling of further copies of their documentation to existing customers.

Among the customers' documentation websites it runs are Oracle's and Autodesk's, from where it sells their documentation to customers who pay by credit card, purchasing order, or cheque.

Mr John Dalton, joint managing director of Trilog.ie, explained that although gross revenues were quite large, of the order of several hundreds of thousands of dollars per month between both CPI and Trilog.ie, meetings with the main Irish banks have been fruitless.

"Irish banks did not have the technology to hook onto our systems," he said, adding that he believed they were not interested in online transactions. "They really approach ecommerce in a fragmented fashion," he added.

Instead of processing credit card transactions via Irish banks, the company is using Cybercash, a US intermediary. Mr Dalton was reluctant to say what commission Cybercash charged, but said: "Ideally it should be around 2 to 3 per cent."

Financial sources indicated British banks typically charged 4.5 per cent commission for online acquiring, as well as a £250 sterling (€371.7) set-up fee. However, Mr Paul Cronin of IDA Ireland, who is based in New York, said small start-ups in the US have to pay intermediaries from 8 per cent to 15 per cent in commissions. He said the card companies such as Visa and Mastercard will only work directly with established vendors.

The Irish banks also prefer to deal with established vendors. Mr Martin Connor, the head of electronic retail banking at Allied Irish Banks, said the bank looks for track record and that the virtual world was more risky. He said the commission charged depended more on the industry and turnover than the start-up status.

Bank of Ireland's Internet programme manager, Mr Nick Fahy, said the bank was more cautious with start-ups because in the event of a disputed payment leading to a refund from the card company - a charge-back - it was easier to get money back from a "gilt-edged corporation". Mr Fahy said card association rules determined that transactions using the popular Internet security protocol SSL (secure sockets layer) were treated the same as telephone credit card bookings. That is, if the card holder disputes the transaction, there will likely be a charge-back.

He said the less popular Internet payment alternative, SET, is treated like signed credit card slips, meaning it is unlikely a cardholder will get a charge-back in the event of a dispute. Both B o I and AIB stressed they have had e-commerce initiatives for around 18 months, as both have online banking facilities.

Mr Connor said AIB acquires "millions of transactions over the Internet at the moment", while Mr Fahy said other transaction sites would follow Touchtel, the tourist information site for which B o I recently started SSL transactions. But another tourist reservation e-commerce start-up, headed by a former banker, is also doing its credit card acquiring in the US. Mr Victor Brophy, managing director of eCommerce Ireland, is a fan of US President Bill Clinton's line: "At the hub of this virtual commerce is Ireland". He said the Republic had an e-commerce advantage due to the strong presence of technology companies here, because it was English-speaking, and because it adopted the euro, but added: "It is up to everyone, banks included, to step up and do what is necessary."

He said e-commerce development followed a trend where growth was overestimated in a two-year time frame, but underestimated in a five-year frame. Now only 18 months old, he said the real growth of e-commerce would occur during the next three years. In other words, there is still time to get organised.

Eoin Licken can be reached at elicken@irish-times.ie