nuff not enuff

Sunday 2 June 2013

CASE STUDY : ONLINE PAYMENT MARKETPLACE : GOAT RODEO




JTU 396E E-Commerce – Assignment 1 

The case study as selected above is about online payment issues for any business transaction concerns. The so called ‘big players’ in this payment marketplace are Apple, Google, Facebook and Amazon which provided their respective customer with their own version of future payment system. An alternative popular online payment surely goes to PayPal. This entire provider objective is to provide their customer a way to pay for the goods or services purchases online with a small fee charges. PayPal for example, deals with the customer request by processing the transaction jointly with the credit card companies which approaching 70% of online payments worldwide. But the most important factor of the involvement of this big company to participate in online marketing is the emergence of the mobile platforms of smartphones and tablets based on the newer technologies explosion experience.
Based on the case study, it stated that the value of online payment is about $310 billion in 2011 alone and an increment at 12% a year is such a persuasive temptation to resist by any. Nowadays, all are eyeing the mobile commerce[1] which started to show impact in the United States in 2011 ignited the fast-growing segment of the larger online payment marketplace. It’s a good indication of how small devices can produce a big influence in the future related transaction online. Neither cash money, credit card nor debit card should be present in the wallet anymore as digital wallet is on its way to break the conventional method of paying for goods and services.  The revenue produced by the mobile commerce is reaching a whooping $22 billion from the overall online payment sum stated above and growing at 20% per year. For the customer point of view, this means a new dimension of shopping spree is available and it is going to be much easier, quick and safer way of implementing in the routine day. No more complicated and fussy approach to follow such as filling name, credit card number, pin number, address, office number and so on when a one time registration give the solution.
It is found that mobile payment is agreed as the best solution of keeping out any cash or card ever needed to be brought along during any transaction done but there is not yet a mobile payment system that are really secure and reliable to replace the conventional method. Namely, customers still have to give all the information by entering it into a tiny screen on their mobile phone. This is not a practical approach to cut the time short but ones need to use PayPal to solve the problem. PayPal will collect and save all the information and manage the transaction later on behalf of its customer. Therefore, customer can just verify the transaction easily without experiencing the complicated moments. The facts that PayPal controlling almost 78% of the alternative online payment and involving itself in nearly $2 billion in mobile commerce, even without the strength of monopoly any hardware or software used in the smartphones or android technology like Apple, Google and RIM, it can be said that they are the front-runners in this business worldwide. The only creditable PayPal have is the 98 million active users on their database which others do not posses. Such as Apple, Google and RIM ( the manufacturer of BlackBerry), their online payment system is way outdated and uncompetitive for the customer to choose from. This is because, like Google, they provide Google Checkout which is grown at 7% of the alternative payment market or in other words, not popular by demand and used; Apple used Apple’s iTunes Store which is a closed type environment of online payment available only to iPhone or iPad registered user; and RIM have nothing similar to any of online payment applications. Somehow, customer does not have many choices upon accessing any online transaction by subscription nor registering to any of the entity mention above except PayPal. Same issue goes to Amazon.com even it is slightly differs from the three company, where they were collecting almost $1 billion in goods from their customer based online in 2010. Recently, a major concerns floating around the business online transaction regarding the process of providing information online at the Amazon.com into a tiny screen of mobile devices. This is not good and perhaps could lead to decreasing revenues in the future because customers are looking at other options or alternative available.
One of the project involving Google, Citigroup and MasterCard are embedded NFC ( Near Field Communication[2] ) into Android Mobile Devices that would allow consumers or customers to pay merchants by waving their smartphones in front of a reader provided by the Verifone, the largest manufacturer of credit card readers for cash registers in the world. The problem is, how can this solve the security measures in the mobile commerce environment? The waving motion took place and follow ups by entering some sort of PIN code to approve the payment which is very unsecure method of payment online because nothing else is related to the transaction occurred. Somebody or someone might have misuse or decoding the PIN code easily. However, Google do not plan to implement the method in the near future because they are concentrating of placing more ads to their registered mobile users.
Social website such as Facebook and twitter also in the process of creating some sort of similar application of mobile online payment. Facebook called it Facebook credits which it can be purchased by using the credit card, while twitter are considering their user to frequently used their two system called Twippr or Twitpay. Both of the twitter based application functioning by downloading the message first, and then acknowledged the recipient, the amount and most importantly, the currency identification before the recipient is notified regarding the transaction. Nevertheless, both twitter systems rely heavily on PayPal to complete the life-cycle. Again, PayPal superior influence onto mobile commerce is beyond doubt.
Even though, cell phone carrier such as Verizon, AT&T, T-Mobile and others around the world did try to persuade consumers to fully utilize the Isis system, which appeared to be bypassing the credit card companies entirely, it is widely known that it is been used all around the world respectively. However, this might threaten the credit card business in the future if it is fully implemented.
One company called Obopay, allowing their customer to purchase or transfer money by using mobile phone. Users can send money to anyone with a cell phone on any wireless network. Obopay have set a deal with Verizon, Nokia, BlackBerry, Citigroup and MasterCard. Currently, consumers need to load their account at the Obopay website complete with the credit card and debit card information to proceed. However, it is not practical to worldwide because Obopay accepting only consumers from United States, India, Kenya and Senegal. The idea is to eliminating credit cards loops so that it can reduce transaction cost for merchants and customers and making it easier to use the service.
According to the case study, the future of wireless payments is assured. The prediction is within five years from now, smartphones will replace the conventional method of carrying cash in the wallet, for an item less than $100, and will be the prefer choice of payment application soon. Android NFC devices show highly potential as online payment application while PayPal remain among the big player to improve once new technology built in the smartphones taking place.
Whatever the decision taken by the big player mentioned in the case study, the mobile commerce would be a hit in the near future. Anything related with the technology, software, hardware, carriers, merchant roles or even Isis system, would be a catalyses to generate a highly revenues to them. Consumers would be benefited by fast, convenient, secure and reliable mobile commerce application to purchase goods or services online. Absolutely, no complicated procedures, no waiting time, reduction cost at the maximum level, and perhaps no more roles played by the credit card companies in the future for any online payment in the marketplace. Anything related with the weaknesses of the implementation of mobile commerce would have been reduced and improved rapidly along with the emergence of new technology which may shrinked the widely boundary marketplace into a consumer-friendly environment sooner or later. In other words, the gap of online payment marketplace and mobile commerce is narrowed, the system is applicable to all and consumers will benefited from it integration.


[1] the use of cell phones to purchase goods and services online
[2] is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters. Present and anticipated applications include contactless transactions, data exchange, and simplified setup of more complex communications such as Wi-Fi. Communication is also possible between an NFC device and an unpowered NFC chip, called a "tag". (From Wikipedia, the free encyclopedia)

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