New Payment Form in Times of Globalisation - Report Example

New Payment Form Because of globalization and a free market economy, there is an increase in the competition between business organizations. Companies are therefore forced to exploit the opportunities presented because of technological innovations. This is for purposes of gaining a competitive advantage over their rivals. Russell (2012, p. 33) explains that multi-national companies such as Samsung and Wal-Mart are successful because of their ability to efficiently utilize the tools of technology, specifically, the tools of information technology. By considering these facts, Belch and Belch (2012, p. 53) explain that the major challenge to marketers is on the best methods of influencing customers to buy their products. Because of the existence of this challenge, companies have come up with new methods of meeting the various needs of their customers. Because of the emergence of these needs, it is necessary to develop a payment which customers find it easy to use. Brennan & Murphy (2013, p. 41) explain that these companies came up with new models of payments, that has managed to revolutionize the manner in which business is conducted in the world. Belch and Belch (2012, p. 53) identify have identified pay pal and mobile money as some of the new methods that makes it easier for people to transact their businesses. For example, through the use of Pay Pal, it is possible for business organizations and consumers to trade through the internet. This makes easy to trade with people who are geographically separated. Miller (2006, p. 112) explains that the development of mobile money is also another new model of new payments, that has revolutionalized the manner which people are able to transact their businesses. Chatain (2008, p. 57) explains that banking organizations such as Lloyds bank and HSBC provide services in mobile money. This involves a situation whereby consumers have an option of accessing their money through their phones. These are new strategies of doing business, and companies use them for purposes of achieving a competitive advantage over rival companies. Definition of New Payment forms: New forms of payments refer to the recent ways that are used for purposes of conducting commerce. This type of payment has emerged because of the existence of digital technology. The major idea that exists under this type of payments is based on the fact that it help in promoting the concepts and principles of e-commerce. E-commerce is the kind of trade that is normally carried out through the use of the internet, or other electronic models or channels of communication. Examples of new types of payments include Bitcoin, mobile money, and mobile point of sale. Bitcoins is the recent method of new payments. It refers to a digital currency, which is created and owned through the use of an electronic media. On a specific note, Bitcoins are created and developed through the use of computers. Unlike the dollar and euro, Bitcoins are never printed. However, they are produced by different people with the intention of solving complex mathematical problems. These are under currencies normally referred to as crypto-currencies. Mobile money can also be referred as a new method of payment. Another name for mobile money is mobile wallet, or even mobile money transfer. These types of payments normally occur through a very strict financial regulation, and it occurs through a mobile device (Hu et al., 2010). Instead of using cheques, credits and cash to pay for a product, consumers would use a mobile device to purchase a variety of goods or even services. The use of mobile payments is adopted by many countries in the world, and it is implemented in various ways. Brennan & Murphy (2013) explains that in the year 2008, the mobile payments that was occurring in the world was projected to reach approximately 600 billion, by the year 2013. In their analysis, Brennan and Murphy (2013, p. 44), explains that this figure has not reached 2013, but it is significantly increasing. This is a proof that the use of mobile payments is popular. Montague (2011, p. 55) explains that mobile point of sale is another example of a new payment method. These methods normally involve the use of a credit card reader that has the capability of combining with tablets or smart phones, for purposes of making some payments. There is an increase in the mobile point of sale. Toffler & Toffler (2006, p. 33) explains that this type of payments is normally used by restaurants, departmental stores, and other types of businesses, whether they are large or small. Examples of mobile point of sale are Square, Intuit GoPayment, Groupon Gnome, etc. New Payment and Existing Theory 1) Digital Marketing: New methods of payment are successful because of the emergence of digital marketing. Digital marketing involves the use of cell-phones, computers, smart-phones and tablets for purposes of advertising a particular product (Chatain, 2011). Loewen& Fitzgerald (2005, p. 33) explain that it is possible to conduct digital marketing through the use of channels that are not related to the internet. This includes televisions, radios and mobile phones. However, on most occasions, Chatain (20111, p. 22) explains that digital marketing is always used through the internet. The social media helps in digital marketing (Loewen& Fitzgerald, 2005). Large companies and business organizations are involved in the use of the social media for purposes of advertising their products. These new methods of payment are taking advantage of the social media, for purposes of advertising their products. 2) Buying behaviour The new models of payment are normally linked to the purchasing behaviour of the consumer. The decision making of a consumer refers to the process whereby a buyer is able to make a decision, regarding the purchase of a product, and Belch and Belch (2012) are able to provide the process. The table above indicates the stages of the decision making process, and identified by Belch and Belch (2012). a) The emergence of the Internet: Brennan & Murphy (2013, p. 46) explain that the World Wide Web has played a significant role in ensuring the increase and development of the use of the new methods of payment. The year 2000 saw an increase in the number of people using the internet. Chatain (2008, p. 33) explains that multi-national companies such as Google, Face Book and Twitter emerged, and they took advantage of the large number of people using the internet, for purposes of developing solutions, that could be implemented to enable people advertise through the internet (Datamonitor, 2010). This period also saw the development of online search tools, like Yahoo Search, Amazon, and Google (Toffler & Toffler, 2006). E-commerce was able to develop because of these tools, and this is because consumers could evaluate the various products offered by competing companies, and make a purchase through the internet. The popularity of using the internet as a source of e-commerce is best depicted in 2011 ((Zickuhr and Smith, 2012; Eurostat, 2012). Eurostat (2012, p. 41) explains that 43% of people were able to transact businesses through the internet. This is in Europe. In United States, Eurostat (2012, p. 41), explains that 71% of consumers were able to transact their businesses online. For purposes of tapping into this increased use of the internet for making payments, companies have come up with a series of innovative measures aimed at making it possible for people to use the internet for purposes of e-commerce. Online payment solutions such as Pay Pal and Google Wallet have been developed, and this makes it easier to transact businesses through the internet (Brennan & Murphy, 2013). b) Mobile Application: Wal-Mart has come up with a mobile solution that makes it easy for a consumer to engage in e-commerce by using their tablets or smart-phones. This application by Wal-Mart has managed to reduce the number of visitors coming into the stores of Wal-mart, hence reducing congestion and man-power that is needed to provide these services to the people (Davis, 2002). Through this mobile solution, it is now possible for customers to make an order and these products are delivered by the members of staff of Wal-Mart. Retailing organizations such as Wal-Mart, Waitrose and Tesco have also developed these types of applications, enabling consumers to use their mobile devices for purposes of making some orders (Miller, 2006). Wal-Mart, Waitrose and Tesco took advantage of the existing need of customers to make shopping at the comfort of their homes, and hence they developed these applications to make this into a reality (Carroll, & Broadhead, 2001). The changing needs of consumers are therefore a major contributor to the emergence of the mobile methods of payments. Mobile payments is not only limited to supermarkets and retailing chains. This is because banking organizations have also developed their mobile money systems that make it easy for customers to access their services by using their mobile phones. Banking organizations such as Lloyds Bank, HSBC are constantly using mobile payment platforms to deliver financial services to their consumers. Is new payment forms is just a trend? 3) Segmentation These new methods of payment are new, and hence they are associated with the development of technological innovations. Chatain (2011) explains that it is possible to accomplish these new methods of payment by understanding the target customer and the market segment. Market segmentation refers to a strategy where a marketer will divide his or her target market into a sub set of consumers, countries, or businesses that have a common priority and need (Russell, 2012, p. 33). Intuit GoPayment is one of the methods that can be used for purposes of carrying out a business activity. The target market of these payment methods are people with banking accounts and credit card holders. These can therefore be the market segment of Intuit GoPayment (Russell, 2012). This service allows credit card holders to access their money by swiping their credit cards through their tablets or any device that is made by the use of the android technology (Brennan & Murphy, 2013). Apples is also taking advantage of the android technology by developing Apple Pay. This is a mobile type of payment that can only be accessed by people using the mobile gadgets developed by Apples. The market segment of Apples Inc is therefore its loyal customers, who are daily using and purchasing its mobile devices. Importance of New Payments and Why Organizations Use Them: 1. To create customer loyalty. 2. To increase the sales of the organization. 3. Building on the brand equity of the organization. The use of these new methods of payment has the capability of making customers to be loyal to the organization. This is because the organization is able to carter for the needs of their customers. For example, when Wal-mart manages to make people shop at the comfort of their homes, then chances are high that these consumers would remain loyal to Wal-Mart (King and Grace, 2009). New methods of payment have the capability of increasing the sales of the organization. This is because more people will begin using the services of the company leading to an increase in the sales of the organization. For instance, an organization that accepts these new types of payments has the capability of receiving revenue from people who are using hard cash, and people who are digital types of payments. This would in turn increase the sales revenue of the organization. New methods of payments have the capability of improving the brand image of an organization, hence increasing its brand equity. This is because companies Disadvantages These new modes of payment also have a number of disadvantages. One such disadvantage is based on the fact that it is complicated and difficult to use. An example is the Bit Coins. These are new methods of payment that normally uses the principles of cryptography. Bit Coins are therefore only used by people who have knowledge of statistics or mathematics. Online methods of payments are also vulnerable to fraud. An example is Pay Pal whereby the site is vulnerable to hackers, who can use their computer skills to hack into the website and steal money. The use of credit cards, as agents of mobile point of sale is also vulnerable to fraud. References: Belch, G., & Belch, M. (2012). Advertising and promotion: An integrated marketing communications perspective (10th ed.). Boston: McGraw-Hill Irwin. Brennan, L., & Murphy, R. (2013). Payment methods. Mankato, MN: The Childs World. Carroll, J., & Broadhead, R. (2001). Selling online: How to become a successful e-commerce merchant. Chicago: Dearborn Trade. Chatain, P. (2008). Integrity in mobile phone financial services measures for mitigating risks from money laundering and terrorist financing. Washington, D.C.: World Bank. Chatain, P. (2011). Protecting mobile money against financial crime global policy challenges and solutions. Washington, D.C.: World Bank. Loewen, N., & Fitzgerald, B. (2005). Cash, credit cards, or checks: A book about payment methods. Minneapolis, Minn.: Picture Window Books. Miller, M. (2006). Choosing an online payment service Google Checkout vs. PayPal. Indianapolis, Ind.: Que. Montague, D. (2011). Essentials of online payment security and fraud prevention. Hoboken, N.J.: Wiley. Russell, M. (2012). PayPal APIs up and running (2nd ed.). Sebastopol, CA: OReilly. Toffler, A., & Toffler, H. (2006). Revolutionary wealth. New York: Knopf. Appendixes: Bitcoin: This is an online payment solution which was developed by unkown people in the year 2014. Pay Pal: This is an online payment solution that is used for the day to day transaction of online activities. Apples: Apples Incl is an American company responsible for the sale and manufacture of computer hardware. Amazon: This is an online retailing company. Credit Cards: These are cards issued by the banks for purposes of carrying out financial transactions. The Internet: This is a tool of communication. Read More