The Differences between Services and Traditional Products #E-Commerce

Introduction

What are the differences between services and traditional products? They are intangible and impalpable. Generally, products are often mean palpable things, services are mostly about experiences. Therefore, the first challenge is how do we show these intangible products since we have nothing physical to show? Besides, the qualities of services are also significantly important and enact simultaneously. 

Secondly, unlike manufacturing lines that produce homogenous products and have accurate quality control procedures, services are heterogeneous since they vary in output. Moreover, Because services are produced and consumed simultaneously, they cannot be inventoried, it's called perishability. For instance, if there are 5 empty seats on a bus, the transportation, the service, which means it can not be stored for future sale. 

However, cyberservice overcomes many of the traditional problems of services marketing by the innovation of control and take the advantage of the Web to mass customization, but we have to manage the difficulties caused by service characteristics first.

Provide Evidence of Service

Since customers can't see the service, we have to provide evidence of what they get. Customers often rely on tangible or physical evidence, to evaluate the service before its purchase and to assess their satisfaction with the service.

Marriott International Inc., the world’s largest hotel company. From its high-end Ritz-Carlton and J.W. Marriott Hotels to its more budget-oriented Fairfield Inns, the company has been successful at clearly positioning its multiple brands. One of its strategies is to provide physical evidence. Marriott provides effective designs of physical, tangible evidence to enhance service quality expectations. When customers visit a service facility, they expect it to be user friendly and just like what they saw online. Moreover, through its app, customers can now communicate with hotel services staff and the functional aspects of facility design also contribute to the overall service experience.

Making The Intangible, Tangible

Although services are considered intangible, effective Web sites still can make the intangible, tangible. The Netflix Web site, its Instagram, Facebook, and other social media tangibilizes dreams, happiness, and satisfaction for their customers. It well describes what kind of experience they can get after they subscribe, the Web site and all the social media become representing the firm. Netflix frequently updates the popular list and makes them into a part of your life. Netflix also maintains the server speed on a high level because service speed is counted in cyberservices and customers won't wait endlessly. They will simply move on and give it a poor review. Then the review spreads all over the internet to destroy the market share piece by piece.

Cyber Sampling

It is very common to give you a free trial for a month or even a year, like the newly released online game streaming service, Apple Arcade. You can get 3 months for free, then NT$ 170 per month. Just like the best way to convince someone to purchase wine is to have them try a sample glass. If they like it, they may buy at least a bottle. Gamers are the same. You have to convince them that Apple Arcade is really worth to pay for the subscription.

Multiplying Memories

Customer frequently relies on the reviews or testimony of others to a greater extent in a product since services are intangible. Agoda.com collects a huge amount of hotel data to provide a comparable and reliable service for booking hotels online or even on the move by its app. People who have booked a stay through Agoda can leave a review about that stay. How did they feel about it, worth it or not? It brings people together to share their experiences of stays. At the same time, it provides several levels of membership plans, if you are a frequent user.

Move to Manage The Simultaneity

Customization

Recall that services are produced and consumed simultaneously, so the provider should try to customize their services. A very recent IPO company Lemonade Inc, offers renters and home insurance policies online. Lemonade delivers insurance policies and handles claims through desktop and mobile apps using chatbots. It uses AI to customize the policies for different customers. Lemonade Inc. is also registered as a public benefit company. It stated a mission of transforming insurance from a necessary evil into a social good. Lemonade uses chatbots to provide insurance policies and handle claims. In 2016, a customer filed a claim for a stolen coat. After answering a few questions on the app and recording a report, Lemonade's claims bot approving and paying the claim in just three seconds. 

Customers as Part-time Employees

The international transportation company FedEx allows customers to track shipments traveling through the system by entering the package receipt number. By doing this, FedEx saves the more expensive and time-consuming telephone system. 

Innovations as Customer Participation

If the customers are willing to do some works for your company, you can create enjoyable environments for them to do it in, and it is much more efficient and even cost reductions. Services such as Apple's App Store, build a profitable and attractive supermarket for creators and engineers to create apps and sell them(or for free) on it. Clearly, Apple does not need to create millions or billions of apps all on its own. It is costly and lacks efficiency.

Reducing Customer Errors

When customers are part of the production process, their errors can directly affect the service outcome. By breaking them into small steps, companies can manage each of them more easily. Online clothing retailer Lativ, provides recommendations and suggestions while their customers are struggling with the sizes. Not only provide the fitting reports by their models and each model's body shape is different. For instance, a 180cm-high model may have tried all the products and gives his or her suggestions. With this kind of information, customers can now follow a specific model that wear the same sizes as them and purchase the same sizes. These steps hugely reduce the return ratio which causes by unfit sizes.

Service Industrialization

Recall the company, Lemonade, an innovative insurance company. Lemonade delivers insurance policies and handles claims through desktop and mobile apps using chatbots. Lemonade uses chatbots to provide insurance policies and handle claims. Lemonade's claims bot can automatically approve and paying the claim in minutes or even seconds. 

Reference

Lemonade, Inc. (2020, December 08). Retrieved December 16, 2020, from https://en.wikipedia.org/wiki/Lemonade,_Inc.

Watson, R.T., Berthon, P., Pitt, L. F. & Zinkham, G. M. (2008). Electronic Commerce: The Strategic Perspective. Global Text Project. Licensed under a Creative Commons Attribution 3.0 License.

Web strategy: Attracting and retaining visitors

Introduction

The Web has changed the nature of communication between firms and customers. The flow of information is predominantly from the seller to the buyer. The Web enables greater interactivity between the firm and its customers and gets much closer to each other since the relative ease and lower costs. Increasingly, customers use search to seek information about a company's products and services. 

However, if Web sites are not interactive, they fail to exploit the potential of the new medium. It must be both attractive and interactive. The strength of the medium lies in its ability to interact with guests for a long term relationship, the first visit and thereafter. Moreover, it should be hard-to-imitate. With Web advertising, we must apply appropriate rules. And, we can apply appropriate rules by understanding the types of attractors. But, how firms distinguish themselves in a flat world? 

After visited so many Web sites, we can identify those that seem to have the potential to attract more visitors. They are called attractors and they are also not mutually exclusive since it is not obviously distinct. Besides, we always have the potential to create more attractors and an organization is not restricted to using one form of an attractor. Taking a variety of approaches may help firms to maximize the attractiveness.

The Types of The Attractors

i. The entertainment park

ii. The archive

iii. Exclusive sponsorship

v. The club

vi. The gift shop

The Entertainment Park

We always need entertainment, it is a big part of our life. It is very common these days, firms use games to market products and enhance corporate image. For instance, Google changes its default search page to a game or an animation, to tell you stories about the day in the history, or let you play a small game to recall your memory about it. One thing I do remember very clearly is that Google Map cooperate with Nintendo insert the Super Mario Kart on the map, it was fun and makes you want to revisit the map and play. Once you get attracted, you may explore more information on the map and there are many businesses on it.

The Archive

This kind of website provides its visitors with opportunities to discover multiple interesting information such as an online museum, or any educational elements. For instance, Starbucks puts all its history and coffee knowledge on its website, to offer a better understanding of its profession and the story of the funder's passion. It enhances brand loyalty by creating belief and trust. 

Exclusive Sponsorship

Be the exclusive sponsor of an event of public interest can be very helpful, especially for brand loyalty. Sponsorship attractors have very broad traffic potential and can attract many visitors in short periods. For instance, every time, during New Year's Eve, we can see firms put their efforts into sponsoring those activities such as showing their brand mark while the fireworks. Starbucks also sponsoring the rainforest alliance, an international non-profit organization working at the intersection of business, agriculture, and forests to make responsible business the new normal and to protect forests, improve the livelihoods of farmers and adapt to the climate crisis.

The Club

Humans are basically social animals, we need connections, communications, interactions, and a sense of identity. Therefore, people have a need to be part of a group and have satisfactory relationships with others. For instance, Apple regularly announces special events and WWDC(Worldwide Developers Conference) to interact with the developers and stimulus many more innovations.

The Gift Shop

Gifts and free samples nearly always get attention such as free trial and free account but charges when you need upgrades. For instance, Agoda has a membership program to reward their member who frequently books on their website or app. Banks often provide cashback program on their websites to induce you to spend more. American Express also has multiple reward programs to obtain the loyalty of its customers.

The Customer Service Center

This attractor is built for directly meeting the customers' information needs and it can be highly attractive to existing customers. For instance, Taiwan-based telecom company Chungwa Telecom offers free downloads of its official app and customers can get client services mobility and directly through its app. Lemonade Insurance company provides an automatic procedure with AI to handle claims of its customers. It's the world's first peer-to-peer homeowners' and renters' insurance company, where mobile users can get insured in 90 seconds and get paid for claims in three minutes.

 

Reference

Insights, G. (2020, September 18). Lemonade Insurance: There's nothing sour about this digital transformation. Retrieved December 22, 2020, from https://gdsgroup.com/insights/financial-services/lemonade-insurance-theres-nothing-sour-digital-transformation/

Watson, R.T., Berthon, P., Pitt, L. F. & Zinkham, G. M. (2008). Electronic Commerce: The Strategic Perspective. Global Text Project. Licensed under a Creative Commons Attribution 3.0 License.

What Is Facebook's Business Manager?

What Is Facebook's Business Manager?

Facebook launched a functionality called, Business Manager to help companies manage and organize their Facebook Official Pages and advertising accounts. It is a free tool developed by Facebook to allow businesses and agencies to securely manage their company’s Pages and ad accounts in one place, without sharing login information.

The primary admin should be in charge of setting up the Business Manager such as the CEO, marketing director, or Social Media Manager, so they are responsible for inviting users, granting them access to manage work pages and accounts, or even setting up the billing information. It is highly recommended that you have more than one admin on an account in case of some unforeseen issues such as managers leaving a company.

What are The Benefits? The Advantages of Facebook Business Manager

Facebook created the Business Manager is an excellent solution for companies such as manage multiple official pages and ad accounts from one Business Manager, and securely share and control access to their ad accounts, official pages, and other assets on Facebook. 

Permission & Access Control

It solves concerns with user access and permissions control by simplifying them in a central location for the company admin. Business owners can now grant different permission levels based on business objectives.

Efficient Customization

Facebook has a lot of valuable and critical information, so it can quickly build custom audiences for your advertising efforts. Also, access the Catalog feature to manage your marketing of different types of products.

Reports in One Place

It automatically generates the reports for your multiple accounts. Businesses all need reports to optimize their operations, learn from the mistakes, doing their analysis, and manage billing details.

Facebook Support

Since Facebook has to rely on the marketing and advertising income, Facebook's team will be very pleased to offer supports for the business manager when troubleshooting issues.

Briefly summarize the few for setting up your Facebook Business Manager

Step 1

Link to the Business Manager home page (https://business.facebook.com), fill out all the necessary information and create the account. 

Step 2

Now, your initial Facebook Business Manager has already set up, and there are three more things to do, add people, add ad accounts, and add pages. Business owners can connect and manage all their resources in one place. 

The "Add people" button is for you to add the relevant people who will need access to your Business Manager, but just be careful to only provide admin access to those users who really need it. To add someone, click on "Add New Person" and you will see the options such as admin, editor, or advisor. And, you can add them by entering their "work email".

Step 3

After making your decision, you can manage the authority such as which pages and accounts this person can access. So, this step is to pick the proper role that will allow all partners to do their job and also, to pick a role that allows the job to get done. This step will protect the account from potential liability.

Step 4

Another useful feature of Facebook Business Manager is the product catalog which is essentially a center for you to organize and manage the catalog of your products if you have different types of catalogs for different businesses such as merchants, travel, or real estate.

Step 5

The final step is to set up your analyzing sensors or operating monitors. Similar to Google Analyze, the Facebook Pixel is a tool for you to measure, optimize, and build audiences.

Conclusion of Facebook Business Manager

As you can imagine, Facebook Business Manager solves a lot of companies’ concerns with user access and permissions control by simplifying them in a central location for the company admin. Facebook has made parts of management a lot easier and streamlined.

Reference

Elley, S., Says:, M., Says:, L., Says:, D., Says:, S., Says:, T., . . . Shaun Elley Shaun Elley graduated from the University of Colorado Boulder in 2012 with a Bachelor of Science degree in business with an emphasis in marketing. After graduating. (2020, April 22). What Is Facebook Business Manager & How Does It Work? Retrieved December 19, 2020, from https://www.goinflow.com/guide-to-using-facebook-business-manager/

The elements of web analytics: Goals, events, and key performance indicators (KPI), E-Commerce

The Goals

If you want to succeed, you need to set goals. Without goals, you will lack focus and direction. However, business objectives are strategic and high level. Instead of, setting objectives like selling more stuff, create happy customers, improve marketing effectiveness, goals are something like "how to do it? Step by step". Setting goals allows you to take control of your direction and also provides you a benchmark for determining whether you are actually succeeding. Having a million visitors linked into your website is only proof of the number is actually there, but how many visitors means success to you, depends on what the exact number is your goal. In short, it depends on how you think and what you want to achieve.

To accomplish your goals, you need to know how to set them. It's not as easy as a daydream. It's not gonna happen if you "just" expect it to happen. Knowing the steps to achieve your goal will allow you to formulate and eventually accomplish it. The simple fact is that for goals to be powerful, they should be designed to be SMART, Specific, Measurable, Attainable, Relevant, and Time-Bound.

For example, a specific, clear, and well-defined goal will be much more achievable. Generalized goals such as more sales, more traffic, and more attractiveness are bad ideas because they don't provide precise direction. A measurable and precise amounts, dates, and so on in your goals so you can measure your degree of success. For example, "To reduce expenses" is not enough, you must measure it with some standards such as 1% reduction or $1,000 reduction. Without a way to measure, you miss out on how to know you have actually achieved it or not. Then, your goal must be achievable and attainable. Almost impossible goals such as living forever, run over the speed of light, or even become a superhero someday, are just waste your time, efforts, and even lose your confidence. However, that does not mean you have to set an easy goal like writing your name on the title of an exam. To accomplishing a goal, you must cost some level of effort. In addition, don't forget to set relevant goals. Goals also should be relevant to the direction you want. Finally, goals must have a deadline, a time-bound. Or, you just have a whole life or even forever to make it happen, and your end up with zero accomplishment and succeed in nothing. Use your sense of urgency increases and achievement will come that much quicker.

The Events

Businesses use the events to collect data about interactions with their potential customers. Events are user interactions with content that can be measured independently from web pages such as downloads, link clicks, and video plays. 

For example, while users click a certain link, but do not stay for enough time to read the full introduction or actually purchase the product. There must be something boring or does not attractive enough. So, business owners can make some changes when they understand this sort of interaction.

The Key Performance Indicators (KPI)

It is the Key Performance Indicator. In brief, it is a measurable value that shows how effectively a company is achieving its business objectives, the overall performance, or just in particular departments such as sales, marketing, HR, support. In other words, KPIs specifically help determine a company's strategic, financial, and operational achievements. But keep in mind, not all KPI is good. KPI is only great if it inspires action, so will you actually measure and influence these actions. And, make sure to pick the appropriate time frame since the different industry has its own cycle.

My father owns a pork processing company in Taiwan that manufactures pork processing products. In the recent 3 years, he decided to sell his products online. So, he cooperates with a local e-commerce company and signed an agreement to built a long-term relationship with the business. Start with the measure, he sets targets such as new customers, return customers, and reviews. Then, he sets the numbers of these targets, 1,000 new customers, 3,000 return customers, and 500 reviews are over 5-star. The sources of these measurable targets are from the platform provider, it collects the customer behaviors data in real-time for the users on the platform. Then, my father has to choose the time frames such as a week, a month, or a year to do his analysis. To choose the right frequency, he must be careful about the key characters of the industry he is in. Not just plan to achieve the goal, he still has to truly understand how many targets are gets, how many are not, and why. Therefore, he measures the number of new customers, the return customers, and how many reviews are excellent. So, the number will be the percentage of 1,000 new customers are get, the percentage of 3,000 return customers are getting, and the percentage of the excellent reviews. However, to get these percentage numbers, he still needs to set the time frame. How many reviews are 5-star this year, how many customers are new this month, or how many customers are returned for his products last month? We are not always perfect, we need to do some changes and adjustments. For example, if the weather is not so nice or due to the pandemic of COVID-19, some fulfillments may not be doing as well as they normally did. Therefore, the plan and the progress must be considered to change quickly to meet the real-world situation. The new customers and the return customers may be changed lower than 30% of their original numbers.

Google Analytics

Google Analytics is a web analytics service offered by Google that tracks and reports website traffic, currently as a platform inside the Google Marketing Platform brand. Google Analytics is used to track website activity such as session duration, pages per session, and bounce rate along with the information on the source of the traffic. It can be integrated with Google Ads, with which users can create and review online campaigns by tracking landing pages and goals such as sales, lead generation, or viewing a specific page. 

How Businesses Are Utilizing Google Analytics to Increase Business and Retain Customers?

Google Analytics' approach is to show high-level, dashboard-type data for users, and more in-depth data further into the reports.

For example, Google Analytics analysis can identify poorly performing pages with techniques such as funnel visualization, where visitors came from, how long they stayed on the website, and their geographical position. Retailers can monitor those data, and make instant decisions and changes such as provides more products that customers actually desire.

More advanced features such as custom visitor segmentation, track sales activity, and performance, or even the site's transactions and revenue. Google Analytics helps businesses to better understand the behavior of their users. It is beneficial to marketers and analysts to customize their marketing strategies.

An Evaluation of Where You See This Reliance on Data Going in The Future

If you know your customer well enough, you have a better chance to win their loyalty. Reliance on data is better than relying on just feelings since they are real activities, not guesses. In the future, there are even more data analysis will be replaced by AI(Artificial Intelligence). The market for enterprise web analytics tools has dramatically expanded in recent years. More companies and organizations are becoming more sophisticated with their internal analytics capabilities and also with their digital marketing activities. Moreover, with free tools like Google Analytics, data freshness can vary widely depending on the amount of traffic your properties receive. If you’re a larger company with some high-cost marketing campaigns, you won’t want to wait 1-2 days to measure its performance.

Reference

About Events - Analytics Help. (n.d.). Retrieved December 08, 2020, from https://support.google.com/analytics/answer/1033068?hl=en

Pateman, N. & Holt, D. (2011).  Inbound Marketing. Bookboon.

The Mind Tools Content Team By the Mind Tools Content Team, Team, T., Wrote, B., Wrote, L., & Wrote, M. (n.d.). Golden Rules of Goal Setting: Five Rules to Set Yourself Up for Success. Retrieved December 07, 2020, from https://www.mindtools.com/pages/article/newHTE_90.htm

Electronic Payment, the assessment and selection of payment methods, E-Commerce

Learning Journal Records 

Date: December 13, 2020.

Title: Electronic Payment,  the assessment and selection of payment methods

Money makes the world go round. Money plays a basic role in the economic cycle which involved deliver products or services, get money for them, offer money to get a product or service, and spend the money for the delivered product or service. But, how can we transfer “real” money into the economic area “Web”? So, here comes the payment challenges.

The categories of money are Money in cash, Book money, and E-money. Primary payment methods are Cash payment, Bank transfer, Debit note, and Wallet payment. Furthermore, there are Derivative payment methods such as Debt collection and billing, Check-based methods, Mobile phone based methods, Credit card based methods, E-Mail based methods, and Prepaid charge card based methods.

Then, Let's get to the assessment and selection of payment methods.

From a supplier’s point of view, it should be accepted by its customer, a shortfall in payment must be protected and avoided, and its costs must be as lower as possible.

Technical

The technical parameters for the selection of appropriate payment methods after satisfying the supplier's needs, 

are periodicity, subscriptions, internationality, privacy, payment guarantees.

The Cost Structure

Payment amounts and cost structure also determine the selection of payment methods. The invoiced amount, the costs per transaction, independent costs (setup and adjustment costs, periodic costs like basic charges for services and software, and rental fees for hardware).

Security requirements

The security requirements for selecting a payment method are control & monitoring, secure confirmation, and liability.

Date: December 14, 2020.

Title: Electronic Payment 2. Payment procedures

Now, integrate into the sales process after fulfilled these requirements through the whole procedures in detail.

i. Payment Per Invoice

The basic steps are order, delivery, sending an invoice, payment, and confirmation. The procedures of this payment method is not an integral part of E-Commerce and the risk is totally carried by the supplier.

Sounds very easy, but there are potential problems. For example, delivery without an invoice, invoice without delivery, deviations, frauds, or delayed payment.

ii. Cash in Advance

The actions are similar. Order, Invoicing, Payment, and Delivery. Let's talk about GiroPay provided by GiroPay GmbH. 

From getting the statement of a Bank identifier code (BIC), Log-in with account number and password by the customer, Pre-filled money transfer, Confirmation. 

However, you may notice that the procedures take a lot of time to complete. And its requirements are also not friendly. The customers' accounts must have an allowance for it and must cooperate with GiroPay. All participants must have a bank account and have signed a contract with a GiroPay.

Honestly, I don't it is a good payment plan. The risk is also completely assigned to the customer which is really a bad idea. The trust will become weaker and weaker. Besides, it makes payers too busy and mad for someone like me.....

iii. Cash on Delivery

Customer orders with C.O.D. and appoint a specific delivery address, and the delivery is done with an invoice. After the cashing is done on delivery, the service provider transfers the money to the merchant’s bank. To complete the procedure, the customer must provide delivery and payment data and the delivery service provider has to take over the cashing function. This method is risk-neutral since the money transfer is not before or after the delivery.

However, the customer is not 100% sure free to get the package at the delivery address. Deviations between delivery and invoice are also problems that must consider. And, what is the return policy?

iv. Debit Note

From order to delivery, there are steps such as bank collection, clearance, and collections of the requested amount. Then, delivery to the customer and forwarding the invoice.

As we can see, there are many complex contracts with banks to deal with. The money collection may still burst and no delivery can possibly and accidentally happen. And again, a deviation is always possible.

This payment method highly relies on the trustee function of the bank. 

v. Credit Card

Those procedures we are very familiar with. We order, confirm the payment is accepted by credit card. Then, we get the delivery and invoice.

Ahead of these simple procedures, there are still full of complex contracts with banks and credit card companies. The customer must have a credit card contract with a bank to get a credit card. The merchant must have a credit card acceptance contract with a bank and must be technically linked to a Payment Service Provider.

As always, the potential problem top one is no delivery and deviations. In addition, payment dysfunctions may happen while the connection is bad.

However, payment is guaranteed by the credit card company. That's why we trust and widely use these payment methods.

vi. E-Payment

Finally, we here. E-payments have been developed especially for e-commerce and supplement the traditional payment methods. There are many methods we can pick such as PayPal, Smart card, cashing and billing methods, and mobile based methods.

E-Payment provider is a new service-based company for providing these kinds of services. E-Payment providers are the medium of the transactions. 

vi-1. Paypal

PayPal account owners are able to send and receive money, to and from any person who has also been a PayPal account owner. PayPal was one of the first organizations that try to fix problems with international payments. However, it's pretty similar to credit card companies who also charge fees from transactions.

PayPay is email based and be able to be connected with credit cards and bank accounts. I think, in the future, PayPay is trying to replace the traditional banks rather than credit card companies. 

 

vi-2 Smart Cards

This method is built to try to replace your wallet, but it still needs to connect with a bank. So, you use your balance in your bank account to fill up the smart card, and then, you can pay with it. 

Not a surprise, there are also contracts and connections with banks and security is still a potential issue since wallets are always the portable targets for thieving.

vi-3 ClickandBuy

This method is also built to replace traditional wallets. ClickandBuy manages customers' accounts associated with banking accounts and credit card data, and stores them in a server. So, customers only need to fill out their user names and passwords while shopping online. Banking account or credit card data do not transfer via the Web.

Date: December 15, 2020

Title: Cyber Money, The Digital Currencies

Cyber money is also called digital currency, is a category of money represented in "electronic form" for financial transactions over the Internet. Mostly, virtual currencies are unregulated digital currencies that are issued and controlled by their developers.

Virtual money

To define it strongly, virtual money consists of value units, which are stored on electronic media and can be used to conduct payments. Or, to define it comprehensively, virtual currencies are all means of payments that lead to a substitution of notes and coins and bank reserves. The protection against theft can be ensured via an encrypted disc area or money storage on a separate medium.

However, one of the biggest challenges for virtual currencies is authorizations. Who is authorized to issue these currencies? And how to handle the exchanges of global multiple currencies from different countries? Moreover, the more anonymous a currency is, the more attractive it is to criminals

Many of these currencies have not yet seen widespread usage, and not be easily used or exchanged since banks generally do not accept or offer services for them. I think the value of virtual money such as Bitcoin, is largely just speculative trading.

Learning Journal Task : How cryptocurrency (BitCoin) works?

Bitcoin is known as a cryptocurrency, a virtual currency, or a digital currency. It is completely virtual and only exists on the internet. Simply to say, it's an online version of cash that tries to replace the number in our bank account and even the bucks in our wallet. Everyone can send Bitcoins to anyone's digital wallet and each transaction is recorded in a public list called the blockchain. Honestly, it relatively safer than many security systems, and with blockchain, it's almost impossible to fake them.

Each Bitcoin is basically a computer file stored in a digital wallet app on a smartphone or computer. The main ways to get Bitcoins are transactions like purchase them with real money or people pay you with Bitcoins, or they can be created using a computer. To create Bitcoins, you computers have to run the Bitcoins application and work out incredibly difficult sums, then it rewards you with a Bitcoin. Therefore, more and more people set up powerful computers just to try and get Bitcoins which called mining. But, the mining also becoming more and more difficult, hugely slow down the speed of Bitcoins being generated, and more and more electricity is needed.

However, many challenges are waiting for it. Let's head back to why we use our real money. I think it all about acceptance and trust. Acceptance means we accept it and forgone another valuable stuff for it, even our time. Before we accepte it, we have to believe it and trust it is can be accepted by others. To be a medium of exchange for goods and services, it has to be the unit of account, store of value, authority, portibility, and divisiblilty. Although Bitcoins do have some benefits such as hard to fake and portibility, it still just a speculation. First, I think most currencies and exchanging mediums are built on trust nowadays, but we don't trust Bitcoins for now. Second, I think the mining behaviour is some kind of joke because this behaviour just induce everyone to manufacture computers and buy computers which doesn't make any sense. Why you have to get a job, if you can earn money by the computers in your house?

Reference

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

Cyber Money, The Digital Currencies, E-Commerce

 Date: December 15, 2020

Title: Cyber Money, The Digital Currencies

Cyber money is also called digital currency, is a category of money represented in "electronic form" for financial transactions over the Internet. Mostly, virtual currencies are unregulated digital currencies that are issued and controlled by their developers.

Virtual money

To define it strongly, virtual money consists of value units, which are stored on electronic media and can be used to conduct payments. Or, to define it comprehensively, virtual currencies are all means of payments that lead to a substitution of notes and coins and bank reserves. The protection against theft can be ensured via an encrypted disc area or money storage on a separate medium.

However, one of the biggest challenges for virtual currencies is the authorization. Who is authorized to issue these currencies? And how to handle the exchanges of global multiple currencies from different countries? Moreover, the more anonymous a currency is, the more attractive it is to criminals

Many of these currencies have not yet seen widespread usage, and not be easily used or exchanged since banks generally do not accept or offer services for them. I think the value of virtual money such as Bitcoin, is largely just speculative trading.

E-Commerce Notebook, Electronic Payment, the assessment and selection of payment methods

Journal 5, E-Commerce Notebook

Date: December 13, 2020.

Title: Electronic Payment 1. the assessment and selection of payment methods

Money makes the world go round. Money plays a basic role in the economic cycle which involved deliver products or services, get money for them, offer money to get a product or service, and spend the money for the delivered product or service. But, how can we transfer “real” money into the economic area “Web”? So, here comes the payment challenges.

The categories of money are Money in cash, Book money, and E-money. Primary payment methods are Cash payment, Bank transfer, Debit note, and Wallet payment. Furthermore, there are Derivative payment methods such as Debt collection and billing, Check-based methods, Mobile phone based methods, Credit card based methods, E-Mail based methods, and Prepaid charge card based methods.

Then, Let's get to the assessment and selection of payment methods.

From a supplier’s point of view, it should be accepted by its customer, a shortfall in payment must be protected and avoided, and its costs must be as lower as possible.

Technical

The technical parameters for the selection of appropriate payment methods after satisfying the supplier's needs, 

are periodicity, subscriptions, internationality, privacy, payment guarantees.

The Cost Structure

Payment amounts and cost structure also determine the selection of payment methods. The invoiced amount, the costs per transaction, independent costs (setup and adjustment costs, periodic costs like basic charges for services and software, and rental fees for hardware).

Security requirements

The security requirements for selecting a payment method are control & monitoring, secure confirmation, and liability.

Date: December 14, 2020.

Title: Electronic Payment 2. Payment procedures

Now, integrate into the sales process after fulfilled these requirements through the whole procedures in detail.

i. Payment Per Invoice

The basic steps are order, delivery, sending an invoice, payment, and confirmation. The procedures of this payment method is not an integral part of E-Commerce and the risk is totally carried by the supplier.

Sounds very easy, but there are potential problems. For example, delivery without an invoice, invoice without delivery, deviations, frauds, or delayed payment.

ii. Cash in Advance

The actions are similar. Order, Invoicing, Payment, and Delivery. Let's talk about GiroPay provided by GiroPay GmbH. 

From getting the statement of a Bank identifier code (BIC), Log-in with account number and password by the customer, Pre-filled money transfer, Confirmation. 

However, you may notice that the procedures take a lot of time to complete. And its requirements are also not friendly. The customers' accounts must have an allowance for it and must cooperate with GiroPay. All participants must have a bank account and have signed a contract with a GiroPay.

Honestly, I don't it is a good payment plan. The risk is also completely assigned to the customer which is really a bad idea. The trust will become weaker and weaker. Besides, it makes payers too busy and mad for someone like me.....

iii. Cash on Delivery

Customer orders with C.O.D. and appoint a specific delivery address, and the delivery is done with an invoice. After the cashing is done on delivery, the service provider transfers the money to the merchant’s bank. To complete the procedure, the customer must provide delivery and payment data and the delivery service provider has to take over the cashing function. This method is risk-neutral since the money transfer is not before or after the delivery.

However, the customer is not 100% sure free to get the package at the delivery address. Deviations between delivery and invoice are also problems that must consider. And, what is the return policy?

iv. Debit Note

From order to delivery, there are steps such as bank collection, clearance, and collections of the requested amount. Then, delivery to the customer and forwarding the invoice.

As we can see, there are many complex contracts with banks to deal with. The money collection may still burst and no delivery can possibly and accidentally happen. And again, a deviation is always possible.

This payment method highly relies on the trustee function of the bank. 

v. Credit Card

Those procedures we are very familiar with. We order, confirm the payment is accepted by credit card. Then, we get the delivery and invoice.

Ahead of these simple procedures, there are still full of complex contracts with banks and credit card companies. The customer must have a credit card contract with a bank to get a credit card. The merchant must have a credit card acceptance contract with a bank and must be technically linked to a Payment Service Provider.

As always, the potential problem top one is no delivery and deviations. In addition, payment dysfunctions may happen while the connection is bad.

However, payment is guaranteed by the credit card company. That's why we trust and widely use these payment methods.

vi. E-Payment

Finally, we here. E-payments have been developed especially for e-commerce and supplement the traditional payment methods. There are many methods we can pick such as PayPal, Smart card, cashing and billing methods, and mobile based methods.

E-Payment provider is a new service-based company for providing these kinds of services. E-Payment providers are the medium of the transactions. 

vi-1. Paypal

PayPal account owners are able to send and receive money, to and from any person who has also been a PayPal account owner. PayPal was one of the first organizations that try to fix problems with international payments. However, it's pretty similar to credit card companies who also charge fees from transactions.

PayPay is email based and be able to be connected with credit cards and bank accounts. I think, in the future, PayPay is trying to replace the traditional banks rather than credit card companies. 

 

vi-2 Smart Cards

This method is built to try to replace your wallet, but it still needs to connect with a bank. So, you use your balance in your bank account to fill up the smart card, and then, you can pay with it. 

Not a surprise, there are also contracts and connections with banks and security is still a potential issue since wallets are always the portable targets for thieving.

vi-3 ClickandBuy

This method is also built to replace traditional wallets. ClickandBuy manages customers' accounts associated with banking accounts and credit card data, and stores them in a server. So, customers only need to fill out their user names and passwords while shopping online. Banking account or credit card data do not transfer via the Web.

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