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E-Payment Technology As recent trends have shown the number of e-commerce users is growing rapidly. But e-payments are uncertain about their future and what direct they are headed. According to a consulting firm Ovum the online e-payment market will reach 126 billion by 2005. A follow up study also predicted that credit cards, which currently account for 98.5% of all on-line transaction will decline to 90% by 2001 as new technologies are developed this study was complied in 2000. Of course the most popular form of e-payment is the use of a credit card. In main land China only 30% use or even have credit cards they par take in some alternative forms of e-payment. These new forms are considered to be the second generation of e-payments basically credit cards being the first. The first alternative e-payments which is becoming popular which basically allows e-commerce transactions to be billed to a customers existing accounts; phone bills, utility bills, internet service providers, and many more. Another method is using optimized card payments basically are like credit cards but are more secure and user friendly. An example of optimized payment cards are internet wallets or virtual cards that have identification and payment information so customers to not have keep putting in payment and shipping information. American Express came up with a Private Payment system which provides consumer using Private Payment are given a disposable credit card number that is different for each transaction. E-cheques are another new form of technology that allows consumers to transfer money directly from existing checking accounts to the sellers account. E-cash is another new method which allows consumers to set up a bank account to fund online purchases. It is very popular in other countries but really has not caught on in the United States because it requires the consumer to set up and account and constantly transfer funds into the account. Also there are some companies that offer alternative currencies such as Beenz, Flooz, and Rocket Cash. These companies allow consumers to prepay for currency and then use it around the web. These technologies make for great new ways to conduct e-payments so it has been said that just like ISP’s, PSP payment service providers will begin to emerge. The big losers in the e-payment revolution could be banks, but they need to make sure that they adapt and find a toe loop in the market. TOP 10 Strategic IT Initiatives for e-Payment Service 1) Electronic Purchasing 2) Fraud prevention and detection 3) Authentication and privacy 4) Secure integration with back-office payments systems 5) Electronic bill presentment and payment 6) Multi-application chip cards 7) Electronic wallets 8) Retail/Wholesale convergence 9) Non-credit card payments mechanisms 10) Wireless Payment 
Acceptance of electronic cash by business and consumer The perceptions of E-cash are still not being accepted and thought to be secure and safe. Security and fraud issues of e-payment scares people away. The progress of acceptance of e-payments is slow. The Federal Reserve is looking at the issue, including launching projects to track and compile the amount and type of consumer e-payments in the United States. Flooz (e-cash System Company) CEO Robert Levitan says that 1.2 million individuals and around 350 corporate clients as of 2001 and they are the industry leader. What the industry needs is a giant brick and mortar retailer like Wal-mart or Sear to get in on the act. Some publicly traded companies are hoping to cash in on e-money. American Express is marketing the Blue Card a hybrid credit card and smart card. Citigroup allows a person to person payment service which allows users to transfer money to each other’s savings or checking accounts online. Digital Cash is basically an encrypted serial number (online e-currency) that simply represents money and is placed into an account. The customer then can spend the money at different merchants that support the digital cash provider the customer signed up with. A customer can add more money to their digital cash account by using their credit card or even their checking account. Digital Cash gives added security and peace of mind to customers as they are not actually using their credit card directly to make purchases. This eliminates most all threats of fraud. One downside of digital cash is the fact that only a small number of online merchants may accept digital cash payments. It's not nearly widely used as regular credit card acceptance is; however, the future looks bright for digital cash acceptance to expand. Government Regulations: The Federal Deposit Insurance Corporation has developed information to help consumers who are thinking about or already banking online. They provide information on how to determine that an online bank is legitimate, tips for safeguarding your privacy, consumer rights, and more. It does not appear that specific regulations for online banking exist besides of course normal banking laws. The internet provides the possibility for safe convenient was to shop for financial services and do online banking. However, safe online making involves making good decisions. The FDIC recommends that you should; confirm that an online bank is legitimate and your deposits are insured, keep personal information private and secure, understand your consumer rights, and learns how to find more information from banking regulators. Side note: Remember, not all banks operating on the internet are insured by the FDIC. A lot of banks oversees are not FDIC-insured. If you chose to use over sea banks the FDIC may not insure your deposits. Digital Signatures Regulations: They started out as individual states passing laws in regards to digital signature regulations. In July of 2000 President took an unexpected step in formalizing internet commerce by signing a long awaited bill. The bill applies that online electronic signatures are intended to replace complete legal agreements and commercial transactions. Basically giving electronics signatures the same power as a legal formal paper document. Soon by signing your name electronically you can hire a lawyer, sign a mortgage, open a brokerage account, or sign an insurance contract. This bill took months of negotiation between Congress and administration to work out a compromise. Also as of March 2001 companies can begin the electric retention of legal records such as mortgages and financial securities. The final portion of the bill requires consumers to agree electronically signed contract and consent to receiving orders over the internet. 
Links: http://www.ecommercetimes.com/perl/printer/4587/ http://www.businessweek.com/bwdaily/dnflash/apr2001/nf2001049_567.htm http://www.bmck.com/ecommerce/fedlegis-t.htm www.fdic.gov/bank/individual/online/safe.html www.cnn.com/2000/ALLPOLITICS/stories/06/30/clinton.esignatures.04/ |
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