Online Payments Assurance and Security - Term Paper Example

The demand for quick, suitable and safe payment substitutes is increasing rapidly. Along with this, there is an alteration in the way commerce takes place in the recent times. One of the easiest ways to identify the significance of electronic payments is to imagine a world without them. In other words, if electronic payments come to a sudden pause then in such circumstances most of the facets of commerce such as trade, travel and internet might confront terrible consequences. Although cash and cheque still plays a vital role in making payments, there are many problems associated with these payment options such as lack of speed and convenience.

These also face issues related to safety demanded by the consumers, governments as well as businesses in today’s fast-paced and ever-dwindling world. It can be mentioned that the extensive utilization of the electronic payments along with the sophisticated network that interconnects many consumers, financial institution and merchants in the world are at the center of commerce (OECD, 2012). The significance of the electronic payments is apparent not only in industrialized countries but in developing countries as well.

One of such costs is related with interchange where a comparatively small fee is offered to the card issuers by card acquirers. It is worthy of stating that interchange comprises part of most of the expenses that issues are supposed to bear for the purpose of creating the advantage that merchants enjoy while accepting the payment cards. It has often been observed that the advantages of payment system and the significance of interchange go unnoticed. Most of the people are aware of the fact that electronic payments which are vast and complex permit the transaction to take place within no time.

It is these systems that permit the cardholders to make use of their card at any part of the country and with the same ease and convenience that they experience at their area. The online payment system permits people to travel with greater peace of mind because they are aware of the fact that they do not need to carry huge amount of money. The very same systems rationalize the checkout process for consumers as well as merchants (Master Card, 2012). Payment systems are considered to be a significant part of the electronic commerce.

Even though in electronic markets, common media of interchange is generally utilized, it is observed that there is escalation of the spatial distance between the buyers as well as the sellers which in turn increases their worries after having successfully completed their dealings. There are numerous payment methods available in online auction markets. They are personal check, credit card, debit card and prepaid card among others. There are different risks, costs as well as convenience associated with each form of online payment method (Peffers & Ma, n.d.).

The main objective of the study is to identify how the companies can enhance their security measures so that