This was the topic I was most looking forward to writing my blog about, because I thought I knew a little about smart cards and electronic payments. However the topic proved to have more to it that I originally thought. Electronic payments are the back bone of e-commerce for without them e-commerce would flounder and because of that businesses need to establish secure electronic payment systems. I can see that B2C need to guarantee secure online payments to secure return customers.
Before reading the Turban chapter I didn’t really consider that I used electronic payments all that often and never thought I had used a smart card. I didn’t realise that store gift cards and e-tags were types of electronic payment methods.
Electronic payments have become increasingly popular method of payment in Australia and have resulted in a rapid decline in the use and acceptance of cheques. The most common forms of electronic payments I make are via the BPAY system or PostBillPay. I know my own bank encourages these types of transactions and does not charge any fee for internet transaction compared to over the counter transactions. I cannot remember the last tie I paid a bill with cash and these types of electronic payments are easy and convenient once they are set up.
The Reserve Bank of Australia it states that in 2004 credit card transaction were the most frequently used method of non cash payments. I probably use my credit card for more transactions than cash however I do worry about card skimming and key logging online. I know my brother in law’s credit card details were skimmed in Thailand while he was on his honeymoon and used for various purchases on and offline online up to the value of $1500. Luckily his bank noticed the unusual activity and contacted him. Despite all the security risks of using credit cards for online payments they still remain the most widely used payments method for electronic commerce (Lim, Lee & Kurnia 2006)
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Although the popularity of e-commerce increases there have been a number of electronic payment systems that have failed over the last few years. Examples of these include Beenz, CyberCash, Cybercent, Digicash, eCharge, FirstVirtual. (Lim, Lee & Kurnia 2006) The study conducted by Lim, Lee & Kurnia (2006) found that findings cooperation with established organisations, simplicity, trust, security and mutuality of stakeholder benefits are all of importance to the adoption of electronic payment systems. They suggested that trust and security in the electronic payment systems is of utmost importance for user acceptance and adoption and that if electronic payment systems didn’t differentiate themselves through adopting different security measures from other electronic payment systems that they increase their chances of failure. Also by aligning themselves with well known trusted brands that are already established in the marketplace they increase their opportunities of success. I agree with the findings of Lim, Lee & Kurnia as these seem to be logical things to help develop consumer confidence in a electronic payment systems.
After reading the case study about the success of the TaiwanMoney card system I was interested in finding out about how smart cards were being implemented in the Australian transport system. Australian Governments have invested lots of money into developing e-ticketing systems. Recently the Tcard system that was being implemented by the NSW State government was scrapped due to continuing problems and delays with the company developing the system. The proposed system was a contactless smart card that was going to be able to be used across Sydney’s public transport network. . According to an article by Tindal (2008) the government invested $95million into the failed system. Although the proposed system failed to get off the ground the Minister for Transport believes that cashless ticketing is the way forward. I was surprised that the government or private businesses hadn’t developed an e-ticketing system beforehand and I’m sure the Tcard failure was a big financial burden for us NSW tax payers.
Being a big fan of EBay I have paid many times for goods I have won by credit card or cash deposits. eBay in Australian from June 17 eBay sellers will only be able to accept payment via PayPals, or cash on delivery, effectively up to doubling the cost of selling a product on the website (Gnome 2008). This change will boost the profits of eBay by millions as eBay owns PayPal. I have never used eBay’s payment system PayPals and am suspicious about the reasons why eBay is implementing this change – is it really to protect the consumers or about driving up their own profits. According Williams (2007) PayPal signs up over 100 000 new customers each day to their services and is the fastest growing global currency exchange. According to Schwartz (as cited Lim, Lee & Kurnia 2006) contributes the success of PayPal to their financial surveillance software that monitors transactions.
I was interested to read that so many countries had implemented ID type smart cards. I believe it will be a long time before Australia introduces an ID electronic card, seeing the current government scrapped the access card proposed by the previous Government. In 2006 John Howard announced that the Australian Government would proceed with an access card for health and welfare services however this has been abandoned by the newly elected Government. This proposed card was strongly opposed by those concerned with the privacy risks and the big brother concerns involved with the development of such cards.
References
Lim, B., Lee, H and Kurnia, S. (2006) Why did an Electronic Payment System Fail? A Case Study from the System Provider’s Perspective. Retrieved 1st May 2008 from http://www.collecter2006.unisa.edu.au/Paper%2011%20Benjamin%20Lim.pdf
Tindal, S. (2008) Tcard is dead, Tcard mark II coming this year? Retrieved 1st May 2008 from http://www.zdnet.com.au/news/business/soa/Tcard-is-dead-Tcard-mark-II-coming-this-year-/0,139023166,339285380,00.htm
Williams, D (2007)Pro PayPal E-Commerce, Retrieved 1st May 2008 from http://www.springerlink.com/content/x5640124014n6816/
Gome, A (2008) eBay forces vendors to use its in-house bank. http://www.smartcompany.com.au/Free-Articles/The-Briefing/20080411-eBay-forces-vendors-to-use-its-in-house-bank.html
http://www.rba.gov.au/PublicationsAndResearch/PSBAnnualReports/2002/Pdf/australian_payments_system.pdf
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