Analysis of Electronic Payment Systems - Essay Example

Analysis of Electronic Payment Systems Various categories of e-commerce When e-commerce is ified by the type of transaction taking place, we endup with four categories of e-commerce namely B2B (business to business), B2C (business to customer), (C2B) (customer to business) and C2C (customer to customer). According to Laudon and Laudon (2008), B2B refers to transactions between businesses while B2C refers to transactions between an organization or a business and its retail customers. B2C refers to transactions taking place within an organization, in other words, intra-business whereas C2C refers to business transactions between customers.

Differences and similarities between electronic payment systemsElectronic payment systems (EPS) can be classified into four main categories namely Online Electronic Cash System, Online Credit Card Payment System, Smart Cards based Electronic Payment System and Electronic Cheque System. These categories can be compared using various features. In terms of actual payment time, electronic cash and smart cards are prepaid whereas online credit card payment and electronic cheque are post paid/paid later.

In Online Credit Card Payment and Electonic cash, all transactions are online but offline transactions are allowed in electronic cheque and smart cards. In Online Credit Card Payment, payments are made by the credit account, in electronic cheque, it is done by the bank acount and in smart cards, it is done by the smart card account. In electronic cash, there is no involvement of a bank account (Laudon and Laudon, 2008). As for their users, online credit card is open for all legitimate users of credit card, electronic cash is open for everybody while electronic cheque and smart cards are open for anyone with a bank account.

In addition, smart card is also open for anyone with a credit card account. Online credit card can partially be used in real world, electronic cash can only be used in virtual world, smart cards can be used in used in real and virtual world and electronic cheque is limited to real world although its checking count can be shared with real world. Online credit card and smart cards are mobile whereas electronic cash and electronic cheque are not mobile. Transactions costs for online credit card are high thus it is not suitable for small payments.

As for electronic cash and smart cards, their transaction costs are but low hence they are suitable for low transactions. Online credit card, electronic cash and smart cards have high levels of user anonymity but it is not found in electronic cheque (Laudon and Laudon, 2008). I mostly use electronic cash because it is open for anyone and there is no involvement of bank account. The type that is most applicable to the organizations I mostly interact with is electronic cheque. It allows for both online and offline transactions and limits cash transactions which is prone to many risks.

Customers can also reduce risks by stop checking payments. How Internet technology supports business-to-business e-commerce. Internet technology supports business-to-business e-commerce by facilitating online payment of transactions through internet payment systems. The use of various internet tools facilitates like intra-net and extra-net boosts the level of communications and collaboration between the various businesses involved in B2B e-commerce. Internet technology also allows for organizations to shop for business partners online.

ReferencesLaudon, J and Laudon, K. (2008). Essentials of management information systems (8th Ed.) Upper Saddle River, New Jersey. Prentice Hall.