Compare Different Payment Methods Used By E-Commerce Systems
In this essay I will be describing and evaluating different payment systems used by e-commerce systems. These methods include Net Banking, PayPal, Google Wallet, Nochex, and Electronic Cheques.
Net Banking:
Paying via net banking means that you do not have to use a card, it is used by customers that have internet banking accounts with their details pre loaded onto them. This means that they would not have to enter their card number, name or security code, but would choose which click on a link to the website of the bank that they use, where they will be redirected to their banks website and able to pay via the site. The advantages of net banking include the safety compared to giving personal details to websites, which sometimes can seem untrustworthy. Advantages of mobile banking as a whole include, again, security, but also the ability to access the bank at any time and generally most apps or websites include all the functions that you would expect in a bank, except the human advice and the ability to bank cheques, and this means you should need to physically go to the bank less. However, there are some downsides to online banking, these include security, which is normally seen as an advantage but information can be stolen be identity thieves and this can take months or even years to rectify, and you may lose money that has been spent by the thieves. Obviously, you would not receive the same customer service that you would do if you walked into a bank, this means that you could lose money by not have advice when investing or transferring money.
PayPal:
PayPal is a well known payment method which is used the world over, it enables people to make payments or transfers through the internet. PayPal allowed users to load money onto an account to then purchase items from the internet. It was so successful because people trusted PayPal with their information, and this meant they could give their details to only one website rather than re-entering them time and time again. PayPal make money by charging a fee when a purchase is made, that people are willing to pay for the security PayPal offers. However, there are some disadvantages to using PayPal, like how money can be frozen if paypal feels that their policies have been violated, which could have a detrimental effect on a small business using PayPal to trade, most likely with vast amounts of money in their accounts, this is made worst by the fact that PayPal can decide when they want to release the money in the account. They have the ability to freeze an account because they are not a public company therefore not required by law to follow banking regulations.
Google Wallet:
Google Wallet is very similar to PayPal in the way that you can load up an account with money and make payments and transfers. It has security that is yet to be intruded by hackers but also has a unique feature which allows users to attach real money to an email, meaning businesses can send an extended message with a payment. Advantages of this are similar to PayPal e.g. fast, secure, easy to use, however, it does have a significant advantage that PayPal haven't, Google Wallet is completely free. Understandably, PayPal charge a fee because online payments are their only source of income, but because of Google's other vast business ventures, they can depend on them to make money whilst offering Google Wallet as a free service. There is a major disadvantage to using Google wallet, and this is it's usability in terms of how many websites offer the option of using it, as PayPal is far more popular as well as being specialist to e-commerce. The same reason also effects what banks let the user have Google Wallet.
Nochex:
Nochex is also an online payment service provider, it is a small private company based in the UK that only employs 24 staff. It is a small business that caters for small to medium businesses, again, this service is similar to PayPal and Google Wallet. Nochex was originally used by e-bay before they acquired PayPal, but having been out grown have decided to target their services at smaller sole traders or private limited companies. Typical advantages apply such as speed, security and ease of use, however, there have been many bad reviews about the company's ability to freeze accounts when businesses go through incorporation to a Ltd and hold on to the money for 6 months.
Electronic Cheques:
Electronic cheques allow customers to pay with cheques at a till and walk away with the cheque in the same transaction because the cheque is only used to remove funds electronically or flag the removal of funds which means that there is no need for a paper copy. Electronic cheques are normally only supported by large businesses that customers usually have an account with the company. These cheques are processed faster than normal paper cheques, which in itself has pros, like being able to see quicker how much you have available in an account, and cons, such as when cheques are written on the basis that the person writing them knows they will have the money by the time the cheque clears. It also reduces the amount of fraudulent cheques received by traders and reduces postage and packaging costs.
To conclude then, all these methods of payment have transformed the way that consumers can shop online and drastically increased the ability for businesses to make sales because it has given them and extra platform to exploit, which usually doesn't break the bank in order to set up. Of all of these methods I would choose PayPal because it is well established, safe, fast and widely used by successful websites, however, I think that Google Wallet could be as usable if more business were prepared to run it and more of the public knew about it.
Electronic Cheques:
Electronic cheques allow customers to pay with cheques at a till and walk away with the cheque in the same transaction because the cheque is only used to remove funds electronically or flag the removal of funds which means that there is no need for a paper copy. Electronic cheques are normally only supported by large businesses that customers usually have an account with the company. These cheques are processed faster than normal paper cheques, which in itself has pros, like being able to see quicker how much you have available in an account, and cons, such as when cheques are written on the basis that the person writing them knows they will have the money by the time the cheque clears. It also reduces the amount of fraudulent cheques received by traders and reduces postage and packaging costs.
To conclude then, all these methods of payment have transformed the way that consumers can shop online and drastically increased the ability for businesses to make sales because it has given them and extra platform to exploit, which usually doesn't break the bank in order to set up. Of all of these methods I would choose PayPal because it is well established, safe, fast and widely used by successful websites, however, I think that Google Wallet could be as usable if more business were prepared to run it and more of the public knew about it.
