Analyzing the Benefits From the Increasing Use of Electronic Payment in E-Commerce

Unlock access to all the studying documents.

View Full Document

Benefits of E-Payment

Analyzing the Benefits From the Increasing Use of Electronic Payment in

E-Commerce

Lixian Chen

Shelley Killeen

Accounting Information Systems

Professor Chen

September 23, 3014

Benefits of E-Payment

Analyzing the Benefits From the Increasing Use of Electronic Payment in

E-Commerce

With the increase in technological advances over the years, and for years to come, an

new form of payment method is becoming popular amongst the industry of e-commerce. E-

commerce refers to transactions of commercial materials and services conducted

electronically through the internet (book). Since the rise of e-commerce, internet shopping

is revolutionizing the retail industry. All online transactions involve electronic payment for

buying and selling of goods and services. As technology is developing, the range of payment

processing models in e-commerce will continue to increase. As payment methods become

more developed, both consumers and merchants will find the ease of use and the

convenience irresistible. The establishment of electronic payments, also called e-payments,

is a service that acts as a trusted intermediary by collecting a payment from a buyer and

pays that amount to the seller (book). A payment process like this has many advantages to

offer to both the consumers and merchants. This paper will analyze the following:

The Benefits of E-Payment and Safety Measures for Consumers

The Benefits of E-Payment for Merchants

The Benefits of E-Payment for the U.S. Government

The Transparency of E-Payment

The Opposing Views to E-Payment: Internet Crime

The Benefits and of E-Payment

and Safety Measures for Consumers

Electronic commerce, or e-commerce, is a new way of conducting business and

engaging in timeless activities. There are benefits of e-commerce to both the consumer, as

Benefits of E-Payment

well as the merchant. For the consumer, there are various processing models to choose

from. Four major market categories of e-commerce are, business to business (B2B),

business to consumer (B2C), consumer to business (C2B), and consumer to consumer

(C2C). E-commerce sites use paperless monetary transections, which we call electronic

payment, or e-payment. E-payment offers convenient, speedy, and relatively secure services

to the consumers. The e-payment services act as a trusted intermediary between the buyer

and seller. Some of the modes of e-payments are: credit card, debit card, smart card, e-

money, and electronic fund transfer (EFT). There are also non-bank or third-party payment

processors such as PayPal, which continue to grow in popularity.

PayPal provides a secure wallet system of transferring funds for both senders and

receivers. PayPal became popular primarily because of its simplicity, flexibility and modest

commission charges for the merchant. Besides all the strengths and benefits of PayPal,

security is a huge concern. The target of many scams, PayPal employs an aggressive manner

of fraud detection, even causing freezing of suspicious accounts. In contrast to credit card

payments, PayPal transactions do not have a fund limit, which does not protect the fund

sender from fraud.

No matter which mode of e-payment consumers choose, security is always an

essential part of any transactions taking place over the Internet. The safety of e-payments

requires confidentiality, integrity, authenticity, encryption, and auditability. Confidentiality

requires information to be accessible to only authorized persons. Additionally, these people

should be authenticated by a mechanism before access is granted to receive information. To

implement integrity, information should not be altered during transmissions. Auditability

means that data should be recorded in such a way that it can be audited for integrity

Benefits of E-Payment

requirements. Encryption is an essential measure to ensure security. It minimizes the risk

of unauthorized access to data through electronic eavesdropping. Data encryption can be

used to prevent a company’s competitors from electronically monitoring confidential data

transmission.1 The sender of the information encrypts the data with a secret code, and the

data receiver can only decrypt the data using the same or a specified code. Other

measurements people use to increase security are digital signatures and security

certificates. Popular security protocols are Secure Socket Layer (SSL), which is the most

commonly used protocol. SSL meets the security requirement of authentication, encryption,

integrity and non-reputability. Secure Hypertext Transfer Protocol (SHTTP), extends HTTP

internet protocol with public key encryption authentication and digital signature over the

internet, supporting multiple security mechanisms to provide security to end users. Secure