Benefits vs. Security

Online payment systems are continuously growing and making the consumer experience faster and more efficient.  We can discuss the new method of payment technology used by Apple’s newest version of their iPhone, the iPhone 6.  The ability for customers to upload their credit/debit card information and using just your fingerprint data saved to the cellphone make any payment in stores and online.  This technology is nothing short of amazing.  Have you ever had the problem of losing your credit or debit card?  Well this new form of technological online payment has created a totally innovative way of alleviating consumer concerns for safety and comfort at the time of making an online purchase. We can also discuss other innovative online payment systems in which consumers are currently taking advantage of.  One example of this would be Amazon’s "Buy now with 1-click" payment feature offered to their account holders. The premise of just having to click on out button and the transaction instantly processing is astonishing.  This feature is not only a huge commodity for online shoppers who like to purchase things as simply as possible.  But also a great benefit to Amazon in the sense that impulse shoppers can now purchase things before they have a chance to debate very long or see their cart size and purchase amount growing.  So, both the consumer and the retailer benefit from this technology!

Of course there will always be people who want to argue about whether these new technologies are safe for the consumer.  Is having all of my payment and personal information stored somewhere for ease of use really a good idea?  What could happen if my information is stolen? Well according to CNN "Apple has stated on the record that they do not store fingerprints, and nor do the actual iPhone devices.  Instead, the iPhone stores the result of a check -- a “hash,” which may be unique, but can't reveal your actual fingerprint."   This prevents anyone from obtaining a copy of your fingerprint and using it for unauthorized purchases.

One could even argue that storing your information through an encrypted online payment system is actually safer than keeping your credit and debit cards in a wallet.  If someone were able to illegally obtain information through an online system they would most likely only get pieces of data and so much data that it would be difficult to sort through and do significant damage quickly.  However, if you lose your wallet, the person who finds it now has all of your physical cards as well as your license which has your address that is most likely linked to your cards, unless you use a P.O. Box. They can now use these to make unauthorized purchases quite easily at gas pumps, stores and online retailers.

So, obviously with all these new systems and technology comes a great deal of responsibility as well as legal concerns for companies implementing them and consumers using them.  However, good use of caution and an understanding of the technology can allow even the most skeptic person the ability to take advantage of the benefits that come with online payment systems.

Problems with Online Payment Systems

Many people agree that online payment systems make life more simple and easy. Just about everyone with a computer or cell phone has been involved in an online transaction using an online payment system. Even though online payment systems have made shopping more accessible, there are concerns and problems associated with online payment systems today. For example, just recently Paypal released an ad that points out the security issues with Apple Pay. Paypal claims that Apple Pay will have security issues because of the fact that iCloud was hacked into earlier this month and private photos of celebrities were leaked onto the internet. Because Apple's iCloud security is under distress, people will be more hesitant to trust and interact with Apple Pay.  

An Introduction to Online Payment Systems

Online payment systems are used by millions of people around the world every day.  We pay our bills, shop online and purchase music, movies, and games with little effort.  However, most people are not concerned with the intricacies of how these systems process those transactions.  Throughout the semester, we will introduce our readers to many of the popular online payment systems used by websites and mobile apps.  We will also explore these systems in order to provide a greater understanding of how they work, what they do, and the disruptions that can cause problems with them.

Some of the most popular online payment systems used today include: Authorize.net, PayPal, Google Checkout, and Amazon Payments.  While each of these systems has different interfaces and capabilities for their customers, most systems process transactions very similarly.

First, customers using a website or App must submit their credit/debit card information for payment.  An online payment system then manages the complex routing of the data on behalf of the website or App being used.  Secure transactions take place between the website or App’s bank and the customer’s bank in order to determine whether accurate information has been given and whether the available funds exist to approve the transaction.  Once the payment system has determined if the transaction has been approved or declined, it stores this information and sends the results back to the website or App for the customer and merchant to see.  These results allow the merchant to complete the transaction with the customer by either releasing the goods or services to them or attempting to have the customer provide a different payment method in order to do so.

Without the use of online payment systems, websites and Apps would not be able to instantly process orders and provide customers with immediate purchase results.  Twenty years ago, payment systems like these did not exist.  What kind of payment systems could you see people using twenty years from now?