TSYS says 85% of the institutions surveyed reported some card-related activities on the Internet, usually account management services such as balance information, bill payment and other self-service functions. The research also shows that issuers expect to focus future Internet activities on customer service rather than new account acquisition.

Olin Wise, senior director of e-business services, TSYS, says: "The Internet could soon become the primary channel for cardholder account management because it gives issuers opportunities to reduce servicing costs and improve service quality."

A quarter of those surveyed also saw the Web as a way to gain a competitive advantage in the marketplace. About half of the respondents use the net to attract new accounts and two-thirds of these use some form of Internet advertising.

Despite this, Wise says few respondents believe the Internet will become the main way of acquiring new accounts any time soon. According to the research, three out of four respondents said the Web generated less than 10% of new accounts in the past year, while 60% of issuers surveyed don't predict greater reliance on the Internet as an acquisition channel because of 'customer quality issues' with 40% citing 'low approval rates' from online sources.

But TSYS says there are still factors hindering the use of the Web by card issuers, mainly security concerns, budget constraints and changing technology.

Paul Jamieson, president of FiSite Research, says before card-issuers can use the Internet to acquire new accounts, the industry must develop better technologies to control risks.

"Only then will these institutions have a chance to capture the growing market of consumers who use the Web to compare, apply for and acquire new credit cards," says Jamieson.