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Monday, November 17, 2008

Electronic Payment Systems

There are many different systems used today that make cash or check completely obsolete. They include digital wallets, micropayment, accumulated balance digital payment systems, stored balue payment systems, digital checking, and electronic billing presentment and payment systems.

A digital wallet allows users to make electronic commerce transactions quickly and securely. It is also known as e-wallet. One of the more well known forms of digital wallet is Paypal. The software provdes security and encryption for personal information and transactions. It allows users to shop without having to re-key their personal information every time they make a transaction. The technology is not only a software program, but it is also an information component. It is basically a database for user-inputted information. The database consist of the users shipping address, billing address, payment information and other important data.Digitial wallet has become a valuable part of Ebay. Ebay uses the technology for practically every transaction processed by its users.

Micropayment systems were brought about for those payments in very small amounts. Some non-ecommerce examples are toll booths and bus fees. This system becomes very obsolete, however, when dealing with credit cards because of the bank charges associated with each transaction.

Some micropayment systems will build an amount and then charge a larger sum for just that reason. These systems are called accumulated balance digital payment system. They will charge every month for the usage after the balance accumulates. An example of this is Vodafone.

Stored value payment systems are becoming more and more popular with each year. The primary reason for this is that more and more people are using the internet for literally everything. From purchasing clothes and food, to shoping for engagement rings. What this system does is holds the payment information in a bank for later use. One well known example of it is Paypal, which is a peer to peer. However, other websites, like (a homeschooling cirriculum purchasing website) will store the information in their systems with a set up log in. This type is called a merchant platform.

Back in the 70's and 80's check writing became a basic form of payment. Problems came about later on the years where one would write a check and later "bounce" due to insufficient funds. This type of activity cause banks, retailers, and consumer to shell out expensive fees if the check was not recovered nor resolved. Out came in 2004 the "Check Clearing for the 21st Century Act" also know as Check 21. This practically removed barriers to paper electronic check processing. How this works was if a consumer pays for goods and services with a check, it automatically gets scanned online, to verify funds where normally would take days for the merchant to receive money now would take hours to move funds once payment is applied, instead of days. This act help reduce "paperwork", and help accelerate cash flow to businesses and other organizations. The use of the internet as a medium to clear payment via a checking account has made business e commerce more popular. The efficiency and speed of the transactions help move goods and services more rapidly. The digital checking movement created more business opportunities online than other retailer handling personal paper checks. According to Fed experts, by 2010 the paper check processing should completely decline rapidly. This should make transactions more than ever quicker and safer in the future.

Last, but not least, we have electronic billing presentment and payment systems. These systems are generally used in an automatic payment type. A really good example that many people use, in Arkansas, is CheckFree. This is Entergy's online payment system. You store your information in your CheckFree account and can set up automatic drafts to your checking or savings account to pay your bill. You can also add other bills that allow CheckFree use, like Dell, to your portfolio.Last, but not least, we have electronic billing presentment and payment systems. These systems are generally used in an automatic payment type. A really good example that many people use, in Arkansas, is CheckFree. This is Entergy's online payment system. You store your information in your CheckFree account and can set up automatic drafts to your checking or savings account to pay your bill. You can also add other bills that allow CheckFree use, like Dell, to your portfolio.


Mrs. Brown said...

Good topic guys!!

Electronic Payment Systems are the best thing ever invented. I don't think people realize how much money we save by using these systems. We can pay our bills online and save on stamps. If I can pay a bill online I do and a lot them also send e-statements to save on paper.

Paypal is very useful also because you can store your information to pay for things online that you otherwise would have to mail a payment. The only downfall to these e-payment systers would be hackers because someone is always trying to get access to other people's information.

Lori said...

I love the electronic payment systems. That is how I pay all of my bills. It is so much more convenient and fast. You can always check what kind of balance you have on either a credit card or your bank balance also.

Miss Susie Homemaker said...

I agree yet again... these systems do save everyone so much time. And of course we all know, time is money. Not only are we saving stamps, but we're saving the gas from having to drive to the bank to make transfers or payments there.

Also, the micro-systems, like the toll booth passes and others, don't just save the user time and money but also the company time and money. This cuts costs of people who have to count all that money, prepare deposits, etc. Now, electronically, all of that is done instantly. FABULOUS!

I too also pay EVERY single bill through my online banking. It's a lifesaver.

Neisa said...

I bank electronically and pay as many of my bills online as I can. I do appreciate the convenience it provides, however I still get paper statements. There is just a security factor there for me. There are times that e-mails do not get through and I don't want to take the chance that my statement doesn't arrive in time and I don't get a payment made. I have had a recent problem with a credit card payment not getting posted and having late fees due to a bank error. Thankfully, the credit card company worked with me on it and took off the charges. Electronic is nice, but electronic requires connectivity. I am a single parent, my husband died over 8 years ago. If something happens to me and all my bills and accounts are electronic only, then my executor will not be able to take care of my estate. That is another reason that I like paper backup.

tbowen said...

When I have the opportunity to pay my bill online, I take advantage. I hate the smaller places that I still have to write them a check. I sometimes worry about my bank information getting out, but my bank has my information in a computer system anyway, so why worry? I think online payments are great and a time saver.

Demechia said...

The electronic payment systems are convenient. If they move everything the electronic way then there will be no need for checks and then what will we do if we need to write a check before payday and there is no money in the bank. I think that some stuff just needs to be left the paper way. That way you will always have a way to trace people.


Demechia said...

This is in rebuttal to my last post. It is not that this isn't a good topic it is a good topic. It is always interesting to learn about the new Electronic Payment Systems.


Angela Murphy said...

Electronic payment systems have become a huge time saver and money saver. No need to buy stamps and I only have to order checks about once every two years now. It helps to always know what is available whether it's online or on my cell phone. My husband and I actually balance our "checkbook" online almost every day. Our bills are paid online and I love being able to see what purchases I've made by category.

Justin Ross said...

Almost everyone here has the same thoughts...I love the electronic payment systems as well!! I would say I order 50% of the things I buy online. I'm really glad that someone invented these great systems!! I would say the only real complaint would be the draw back of putting your personal information on the internet. My wife has actually had someone steal her debit card information while checking out at an online store. The criminal spent like $500!! I now see a whole lot more security on these online stores now. You can always trust a website when you see some sort of security icon that let you know you are protected form hackers and so on.

I really don't even see the use of cash or checks anymore. There only a couple place that don't take plastic or some other sort of electronic payment. The world is changing right in front of our eyes and we barely realize it!!

Snoodle Family said...

I use the Electronic Payment Systems a lot! I rarely use cash or checks anymore because of how convenient the debit card/credit card/ electronic payment systems has become. I have one bill now that has to be mailed. The others I can ust get online and pay. I do have to be careful, though, when buying online. I have had identity theft before, so even though a business says that they are internet secure, I am still weary, but it has not stopped me from still buying online!

The Seabolt's said...

I have also used electronic payment systems and have wondered how safe is it really. I used to use checks all the time about 4 years ago but with the ease of the debit card, that is what I prefer. I remember the bank telling you to put your home address, telephone, and SSN or DL number on all your checks! Now that is so scary to me that I have only the bare minimum on my checks! I too dont carry cash only that plastic debit card.

Andy Arnold said...

I’ve not used checks in close to five years now. I pay all of my bills online through my bank free of charge. It works really well and the ease of keeping up with payments and tracking my spending is remarkable. I’m surprised checks are not already obsolete as they are quite easy to commit fraud on another person’s account with personal information such as name, address and driver’s license or even social security number inscribed. The emergence of checkless availability and debit cards has drastically limited my carrying cash. So, I am not a happy driver when I pull into a gas station to find the pump doesn’t accept debit/credit cards for payment and avoid those stations at all costs.