E-Marketing: E-payment - Essay Example

E-Marketing: E-payment Executive Summary Electronic payment methods fall into three major categories, which are single to vendor payments, recurring customer to vendor payments, and automatic bank to vendor payments. From these categories, the proposal will recommend three online e-payment systems to Book Bunker; debit cards, Pay Pal, and electronic checks. Pay Pal is a convenient method for receiving payments from customers for purchases made online, as well as for the transfer of funds. Its advantages and disadvantages are given with the major advantage being its ease of use and low cost while arbitrary locking of accounts is the main disadvantage. Debit cards are convenient for purchasing products because their use is similar to credit cards. Its advantages lie in its ability to prevent loss of funds during transactions. While, its disadvantage involves the need to keep detailed and up to date personal records that may discourage clients. Electronic checks are e-payment methods, which allow the business to give clients the option of making payment by check while also enabling the check to get the credit or debit card treatment. This system is beneficial equally to the client and the business as it improves flexibility, accuracy, and efficiency while its disadvantage lies in concerns regarding the system’s security with float and errors. Finally, the proposal gives recommendations on how to secure the bookstore’s website and online payment system. Recommendations include; controlling social media friend request acceptance to prevent infiltration by information thieves, use of encryption in securing the client’s personal and financial data, and keeping an eye on the evolving biometrics systems, which use voice and print authentication that confirms that only the client has the capability of purchasing books using the system. E-MARKETING: E-PAYMENT Introduction Electronic payment is any form of payment that does not involve the use of a paper check. In this proposal, debit cards, Paypal, and electronic checks will be recommended. Electronic payment methods fall into three major categories, which are single customer to vendor payments, recurring customer to vendor payments, and automatic bank to vendor payments (Abrazhevich, 2010). Single customers to vendor payments are used for e-commerce sites using the shopping cart and credit card information provision. Recurring customer to vendor payment is used when a client pays their bill via a debit card, which is regularly scheduled from the business’ checking account or automatic credit card charges. Automatic bank to vendor payments requires the use of online bill pay where the client’s bank electronically transfers cash to the vendor’s account. This can be done manually or automated for regular payments. E-Payment Options Pay Pal One of the de facto methods of payment for millions of online shoppers around the world is Pay pal, especially because it is accepted by most online retailers. Pay Pal is a convenient method for receiving payments from customers for purchases made online, as well as for the transfer of funds (OMahony et al, 2009). One advantage of the method is that it is trusted. This is because the payment method is an intermediary with the client’s details, which does not reach the owner of the website. Clients, therefore, can utilize the method without worrying on sharing sensitive information with the seller, which they fear could compromise their accounts. It is also easy to implement with most businesses preferring to use Pay Pal, especially if they have a limited budget for web design. The method provides widgets for operators to plug into web pages with the code completing the rest, taking clients to secure servers, as well as managing the transfer of funds. Finally, it is also easy to implement. Although it deducts a payment for all transactions made, it also allows small enterprises to use it free. For medium and large enterprise, the Websites Payments Pro Plan allows direct payments without redirecting to its main page (OMahony et al, 2009). Pay Pal, however, does have disadvantages such as locked accounts. Owing to issues of security and regulations that aim to limit fund transfer to terrorists, Pay Pal, at times, can freeze an account if it suspects breaches in security (OMahony et al, 2009). They may be temporarily frozen due to a breach of security or frozen in the long term as they investigate improprieties. If the account is frozen long term, this could leave the business with no ability to access their funds. The method also lacks outside arbitration with businesses having little resources if they are in a dispute with Pay Pal, for instance due to account freezes and fraud charges. Its terms of Service give it dominion to investigate all funds in their system, and these may be done with no documented evidence to the business. The system also has corporate access to the business’ bank account, which it may use to deduct funds without authority if the client meets charge-back conditions (OMahony et al, 2009). Debit Cards Banks and other financial institutions determine their benefits and policies for debit cards. They can be associated with checking accounts or bought as pre-paid cards (OMahony et al, 2009). They are convenient for purchasing products because their use is similar to credit cards. They are advantageous to the client as they relieve him/her of the need to carry money. Most online businesses accept them, and clients are comfortable with business’ that do. The client is not worried of losing money during the transaction or sharing account information since the card can only be operated with the owner’s PIN number. The client and business also do not have to make bank trips for money withdrawal. However, the method has several disadvantages. For one, the client is expected to keep accurate records by recording all transactions and being knowledgeable on their account balance. Lack of record keeping runs the risk of overdrawing funds; therefore, most customers are not willing to use them at stores that encourage impulse buying, such as bookstores (OMahony et al, 2009). Electronic Checks These are e-payment methods, which allow the business to give clients the option of making payment by check while also enabling the check to get the credit or debit card treatment (OMahony et al, 2009). Necessary bank details and cash amount are captured and routed to the ACH that facilitates money transfer to the business’ account very quickly. This system is beneficial equally to the client and the business as it improves flexibility, accuracy, and efficiency (OMahony et al, 2009). The system has access over 24 hours and instantly acknowledges the payment. The business is assured of the current account being valid via a process of verification. The client can also access their current account 24 hours a day, and thus, can make payments at any time, which is essential for a 24-hour business. The system also has lower costs and increased efficiency. The system saves funds for the business by eliminating processing costs for transactions with clients. By eliminating the need for envelopes and stamps, the method, also reduces costs for the client and saves time, encouraging them to use the system on the business’ website. However, there are concerns regarding the system’s security with float and errors (OMahony et al, 2009). Business staff can access customer information and the business’ website can be hacked while this can also happen with an interception of transactions. Equipment failure and human error can also lead to transmission accuracy becoming jeopardized. Matrix Advantages Disadvantages Pay Pal One of the de facto methods of payment for millions of online shoppers around the world is Pay pal, especially because it is accepted by most online retailers Pay Pal is a convenient method for receiving payments from customers for purchases made online, as well as for the transfer of funds It is a trusted method of payment Clients do not have to worry about sharing their account information with the business Easy and cheap to implement on a limited budget Websites Payments Pro Plan allows direct payments without redirecting to its main page for medium enterprises The business’ account could be locked in the case of federal investigations Lack of outside arbitration if the business is in dispute with Pay Pal may deduct funds without authority if the client meets charge-back conditions Debit Card They are convenient for purchasing products because their use is similar to credit cards They relieve the client of the need to carry money clients are comfortable with business’ that allow the use of debit cards The client is not worried of losing money during the transaction or sharing account information since the card can only be operated with the owner’s PIN number The client is expected to keep accurate records by recording all transactions and being knowledgeable on their account balance Risk of overdrawing funds; therefore, most customers are not willing to use them at stores that encourage impulse buying Electronic Check These are e-payment methods, which allow the business to give clients the option of making payment by check while also enabling the check to get the credit or debit card treatment Necessary bank details and cash amount are captured and routed to the ACH that facilitates money transfer to the business’ account It improves flexibility, accuracy, and efficiency The system has access over 24 hours and instantly acknowledges the payment The business is assured of the current account being valid via a process of verification The system saves funds for the business by eliminating processing costs for transactions with clients Business staff can access customer information and the business’ website can be hacked while this can also happen with an interception of transactions Equipment failure and human error can also lead to transmission accuracy becoming jeopardized Website and E-payment System Security Recommendations To protect their website, Book Bunker needs to pay more attention to current social changes. If not careful, small changes could lead to big problems, such as Facebook’s changing of the business’ default email to @facebook.com that could enable spammers to contact the business more easily (Radu, 2012). This can be controlled by adjustments made to the privacy settings. Book Bunker must also protect their online accounts with strong passwords that offer more security, such as long passwords with symbols and numbers. Book Bunker must also carefully choose their friends and followers on Twitter and Facebook. “Social bots” may use fake names to hack into the bookstore’s network and exploit the trust they have built by sending notifications or emails to the network and soliciting products via the use of Book Bunker’s information, access, and persona (Radu, 2012). Security is the number one concern for all the online payment systems discussed above. For example, if hackers infiltrate Book Bunker’s system, they could steal a client’s debit card numbers and charge them on fraudulent buys. This could cause the bookstore’s reputation to suffer severe damage. However, transmission of debit card numbers can be as secure as handing the card to staff in the physical bookstore. They can be protected via the use of sophisticated encryption that makes the number invisible to parties in the transaction (Radu, 2012). Decryption software can then be built into Book Bunker’s system. Encryption will also assure Book Bunker that the order, which has been placed by the client, is not altered and that the client’s financial and personal data was not the victim of an intercept. In addition, if the client attaches a digital signature, then Book Bunker can verify the authenticity of the order (Radu, 2012). Book Bunker would also have to assure the clients that their card numbers would not be stored on computers with interne access. Book bunker, presumably, uses a website that is on an ISP server, making it possible to accept debit card payments online. The host server will collect the clients’ data and transfer it to the bookstore after encryption. If Book Bunker is not in possession of a secure server, then they can use a company such as Versanet that will allow it to get a secure order page on its server that processes all transactions (Radu, 2012). Finally, it will be essential for Book Bunker to keep track of emerging security technology since internet payment systems’ future in security may lie in technologies yet to be commissioned. One such technology is biometrics, which uses voice scans and fingerprints, especially since user authentication is the major problem facing online e-payments. References Abrazhevich, Denis. (2010). Electronic payment systems : a user-centered perspective and interaction design. Eindhoven : Techn. Univ. OMahony, Donal. Peirce, Michael. & Tewari, Hitesh. (2009). Electronic payment systems. Boston : Artech House. Radu, Cristian. (2012). Implementing electronic card payment systems. Boston : Artech House. Read More