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?
Personally, I don't see any changes to the way we purchase online anytime soon. I believe that we have come to a point where if we were to create a more automated process, we would sacrifice the security of our information. So maybe the real question is how do we ensure a safe and secure online payment system that is up to par with technological advancements?
ReplyDeleteDerek,
DeleteI agree with what you are trying to say here, however, I would point out that 5 or 10 or 15 years ago people would have said the same exact thing and yet we continue to develop new innovative ways of processing and securely storing info. Thanks!
I've heard WalMart is already experimenting with in aisle purchases that bypass checkout. I don't know the details concerning their specific system, but I can imagine a world where a device like a watch or phone guides a person to different products in stores and allows them to automatically pay for their cart full of items when they cross an store exit threshold. With RFID chips this would actually be really easy to do from a technology standpoint, but would hit a great deal of resistance socially.
ReplyDeleteI would really like this idea. If I could go to the store and not have to stand in a line, I would definitely utilize it.
DeleteAaron,
DeleteI really like your comment here! I don't think it would get the resistance you believe it would though. This is a way that brick and mortar shopping could try to make itself more like online shopping and could raise sales as well as reduce the cost of having cashiers on staff. Once RFID chips become more available for less money it is definitely a possibility. Great idea, Thanks!
John, I hope you're right.
DeleteBut consider that Walmart tested an advanced checkout system many years ago, where shoppers pushed their filled cart through a tunnel that automatically scanned and rang up all their items. similar to this video: https://www.youtube.com/watch?v=5MnQ8EkwXJ0#t=123
You and I would jump on such an opportunity, but it turns out most shoppers opted to stand in line and have a person manually ring their goods up because they did not trust a machine to do it right. After all, how many times have you been in the store were able to immediately stop the cashier when you noticed something rang up at the wrong price? It's happened to me dozens of times.
If you're like me, you value the saved time from every automatic checkout as far surpassing the one or two minor mistakes that occur, but unfortunately most people seem to not understand the marginal value of their own limited time on this planet.
I feel that we may eventually reach a time where actual cash may become irrelevant. Already, more and more people rely on debit and credit cards to carry out most of their transactions. If we could reach a level of security where no one would be hesitant to use a non-cash payment system, then society might start heading in that direction.
ReplyDeleteLauren,
DeleteI really hope this cash-less day comes soon. I think it is so ridiculous and archaic that we still use paper and coin currency. It is unhygienic, costly to produce, and almost obsolete as it is apart from a few small merchants. I cant wait until all currency is just logged as a digit transfer! Thanks for you comment!
Lauren, have you met anyone who even has a legitimate reason for using cash, other than the few cases when a specific merchant or person will only accept cash? I've met people who don't want to be "tracked" but they have government issued IDs, they own real estate, they watch cable and surf the internet - they're already being tracked.
DeleteCash is actually less secure if you think about it. If my wallet of cards get stolen I can immediately report that fact and any charges that occur I am not stuck with by law. If someone steals my wallet full of cash, I'm hosed, therefore I don't care more than 20 bucks ever, and only use it when forced to.
In truth, its not question of actual security, but rather perceived security, which I think for most people is really a function just "feeling" familiar with the technology (while still not understanding it).
Online Payment is interesting way to pay for the things you need. you can find more goods than the good in store and you do not have to go waste time on shopping in shops.
ReplyDeleteNot to mention no sales tax!
DeleteI was very uncomfortable using my card to purchase smth online for the first time. Now I enjoy it more and more - I can reach global market otherwise not available for me! Also there is a trade-off between security and convenience (e.g. paying bills online).
ReplyDeleteI believe the next big thing is paying with a smartphone. You've probably heard about Apple Pay app, also Target is currently testing its new app CurrentC (actually, a collaboration with Apple) which can help customers use discounts and rewards and pay at the same time. It might be challenging at first (new technology is always hard to accept) but I'm sure people will eventually choose convenience.
Online payment is really convenient, people now have to option of not having to leave there homes and still are able to shop.
ReplyDelete