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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