Discussion, E-Commerce, How can we transfer money through the Web?

How can we transfer money through the Web? After all, money is the most common power for doing business. But transactions online are not as simple as running a physical shop since transactions happen 24 hours a day and without limited by geography. 

However, to get the money, we still facing several challenges such as different currencies, different payment methods, security, and trust. From the supplier’s point of view, payment methods must be acceptable by their customers, safety(such as transaction control and monitoring), and as lower costs as possible. So, let's discuss the pros and cons. Before digging into them, I would like to introduce two types of payment that I have used in the past.

A Brief Introduction of The Types of Customer Payments

There are various payment methods for customers and sellers to choose and accept such as bank transfer, cash, wallet payment, mobile phone based methods, credit card based, or prepaid charged card. 

However, these methods have to be acceptable by the transaction participants, protected by authorities, and the cost of the procedures is relatively low. Moreover, these factors are influenced by each other. For example, the acceptance can be affected by the costs if it is too high or lower than the other methods. If a method is highly acceptable by the public, some authorities or governments may try to protect it. 

To select the methods, other factors we need to consider were the technical parameters and securities requirements. Technical parameters such as periodicity(subscriptions), international payment, privacy, and guarantees protection(like delays or shortfalls).

Two methods I frequently used in the past for online purchases were credit card based payments and mobile phone based payments. I think they have become more and more often nowadays due to the conveniences and mobile capability.

Credit Card Based Payments

This method is very common for online purchases since organizations like VISA, Mastercard, or JCB, and banks will handle all the hard procedures. After the decision to buy, click the CTA(calls to action) button, provide your credit card data, and get the 2-step verification number to finish the final step. Then, wait for the delivery.

Credit card payments have one significant benefit, that is payments are guaranteed by the credit card company. Trust is very important for every transaction and relationship. Credit card companies build this kind of trust by using their unique information technologies.

However, things are not just as easy as I said. There are some requirements to do ahead of the procedures. The participants all must have a credit card contract with a bank and linked to a Payment Service Provider. By the way, I think reducing the mediums can improve the efficiency of the process, so the payment service providers may all facing more and more challenges shortly.

Another potential issue is the delivery. What to do if I do not get what I purchased? Each time you click on the checkout, you must somewhat concerned if you did not buy anything on a particular website before. Furthermore, what to do if there are deviations? We must have a solution to deal with this sort of situation. 

Mobile Phone and Cloud Based Payments

Mobile phone based payments such as Apple Pay and LINE Pay have become more and more common today. When you use Safari on your iPhone, iPad, or Mac to make purchases on the web, you can pay through Apple Pay without having to create an account or fill out lengthy forms. Apple Pay uses a device-specific number and a unique transaction code. Therefore, your card number will never be stored on your device or Apple’s servers. And when you pay for anything, Apple will never reveal your card number to the merchant. Its safety level is pretty reliable.

LINE Pay is very a very convenient payment method, similar to a connected e-wallet build inside your phone. LINE app generates barcodes and a series of numbers for every transaction. Merchants scan the barcode and then get paid. The money is pre-charged from one of your bank account or credit by your credit card

However, not every card and every bank has a contract with Apple or LINE. And also, not every merchant accepts Apple Pay or LINE Pay. So, you still have to consider the acceptances before you pick up your phone. Moreover, you also need a well-connected environment since it is necessary for all transactions through this kind of payment method. Dysfunctions will happen if there is a poor connection.

The Encountered Issue

I did encounter an issue before, a fraud. A criminal stole my credit card data and used it for two Disneyland tickets. I aware of it while I was checking the bill. Then, I call the bank and tell the customer service that I did not make those purchases. After I fill out a form and sent it to the bank, I don't have to pay for the fraud. 

I also have encountered an issue with LINE Pay. As I said, it only works within a well-connected environment. Therefore, while I tried to open the app to make a payment, it unexpectedly shut down. So, I have to change my option and it's a little emotionally painful. 

Reference

Kutz, M. (2016). Introduction to Electronic Commerce: Combining Business and Information Technology. Bookboon.com