What's Next....

As a group, we really appreciate you all stopping by to read our posts.  This started out as merely being an assignment that we had to complete in order to be successful in this class.   In the end, I think we all found it very informative.  I think that it also gave us a chance to step back and notice just how much we use the internet to complete all types of transactions via Online Payment Systems, OPS.

So, What about our blog would you say stood out most?  Let’s see…we stated that some of the Pros of using online payment systems were time management, convenience, saving money, and being more conscious of preserving our Planet by using less paper.  Of course, there are numerous reasons as to why OPS may be the best choice for some of you.  To sum it up, I really feel most consumers and business owners would chalk up their choice to use Online Payment Systems is simply for convenience.

But is the convenience really worth it?  We also had to point out the Cons of using Online Payment Systems.  The three that our group chose to speak on were online security, missed errors, and fees.  Do you think the convenience of OPS is worth any of these?  We discussed some of the everyday business operations and daily benefits of using online payment systems, as well as the major issues associated with OPS.

So what’s next……………

There is a lot of positive talk about Online Payment Systems in the future.  The idea of making purchases and payments online is becoming more and more accepted by people around the world.  I completed an informal survey while at work today and it was odd (well, not really odd) but I found it interesting that not one person in my center could say that they paid all of their household bills face to face.  Actually, all but one person (and there are 19 of us, all females with an average age of 28 years old) stated that they paid 90% of their bills online.  As of 2010, fifty-two million households paid their bills online.  That amount is steadily rising.  This is most definitely a trend amongst the “online payment world”.

Another trend is using credit card readers.  Many of you may be familiar with the commercials for the “Intuit credit card reader”.  This make doing business much easier because you can conduct business and accept credit/debit cards from your phone.  Well, I am very impressed with Paypal’s version of the credit card reader, simply called “PayPal Here”.  I think the major difference between this credit card reader and many others is the fact that it works only with Apple iOS and Android products, but most importantly, the fact that it is encrypted and is backed by PayPal’s risk management capabilities.  That gives you major comfort knowing that PayPal went the extra mile to help you feel more comfortable using their products.  Along with the security, you get the credit card reader along with the application for free (there is a 2.7% fee charged to your customers per each transaction), your funds are available to you fairly quickly, you can accept checks, send invoices from the app, and quite a few other features.

Although I will not go into too much detail, be on the look out for PayPal’s “Bill Me Later” product.  It is sort of like a credit line built-in to your Paypal account.  I found it to be pretty cool and again, it is just bringing us back to the realization that there are so many ways of using Online Payment Systems currently and there will surely be more to come.

Thanks again for keeping up with our blog posts over the past several months.  Hopefully the information was as helpful for you as it was for us.

Sources:

Laudon,  Kenneth C. and Jane P. (2012) Management Information Systems: Managing the Digital Firm. (Twelfth Edition)

https://www.paypal.com/webapps/mpp/credit-card-reader

https://www.paypal.com/us/webapps/mpp/billmelater-productoverview

How Online Payment Systems Are Used In Everyday Life

In this entry, we will discuss the significance of OPS in everyday life and the technologies necessary to make it all possible.  Consumers and businesses rely heavily on online payment systems daily for a multitude of transactions.  These transactions include travel, shopping, filing and paying taxes, paying bills and other banking transactions, as well as investing online.  Two main technologies in particular have emerged as a result of the increased demand of online payment systems:

Electronic bill payment and presentment (EBPP)

There are a significant number of bills that consumers pay on a regular basis, which include power bills, water, oil, internet, phone service, mortgages, car payments etc.  EBPP systems send bills from service providers to individual consumers via the internet.  The biggest difference between EBPP systems and the traditional method of bill payment, is that of technology. Rather than receiving a bill through the mail, writing out and sending a check, consumers receive their bills in an email, or are prompted to visit a website to view and pay their bills.  Three variations of EBPP currently exist:

·         Consolidation, where numerous bills for any one recipient are made available at one Web site, most commonly the recipient's bank. The actual task of consolidation is sometimes performed by a third party and fed to the Web sites where consumers receive the bills. The principal attraction of consolidation is that consumers can receive and pay numerous bills at the one location, thus minimizing the number of login IDs and passwords they must remember and maintain.

·         Biller Direct, where the bills produced by an organization are made available through that organization's Web site. This works well if the recipient has reasons to visit the biller's Web site other than to receive their bills. In the freight industry, for example, customers will visit a carrier's Web site to track items in transit, so it is reasonably convenient to receive and pay freight bills at the same site.

·         Direct email delivery, where the bills are emailed to the customer's inbox. It is convenient, because almost everyone has email and the customer has to do nothing except use email in order to receive a bill. Email delivery is proving especially popular in the B2B market in many countries.

Mediaries

There are also online payment systems that serve as mediaries and facilitate person-to-person payments, such as PayPal that have revolutionized the way funds can be exchanged on internet auction sites.  According to PayPal, one in three online buyers has an account with them.  PayPal is an acquirer, performing payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It may also charge a fee for receiving money, proportional to the amount received. The fees depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type. 

How do OPS affect your day to day online transactions?  Feel free to share your experiences.

Source:

Tamayo, Xavier, Jimenez, Luis and Flynn, Shawn P. (July 13, 2005) Trends in Consumer Payment Systems. Electronic Substitution for Mail: Models and Result, 8. Retrieved from: http://www.phoenixhecht.com/treasuryresources/PDF/PitneyBowes_trends%20in%20consumer%20payments.pdf

OPS: Everyday Operations

Many people would be surprised to learn just how much an online payment system (or “OPS”) effects the everyday operations of a company – especially when it comes to small businesses.  In this blog entry, we will discuss some of the daily benefits of using an OPS, as well as the major issues that are often associated with using an OPS.

LOWER COST

Being a small business owner, I can definitely attest to the everyday benefits of having an OPS. When I was first getting started, I initially considered having a merchant account setup for my company… But then I quickly discovered how much lower OPS fees were in comparison. Businesses (both big and small) make transactions each-and-every-day, so having a cost effective payment system easily becomes an important part of one’s daily operations.

USER FRIENDLY

OPS is arguably the most user-friendly method of online payment that is available today – for both company owners and their customers. Unlike waiting for a card to clear (which, in some cases, can take a significant amount of time) or mailing in a check (which can also be a very time-consuming process),  OPS allows customers to make secured purchases instantly, which is extremely beneficial for both parties involved. OPS prevents business owners from having to deal with notoriously complicated methods of payment, ultimately saving them the time and hassle of having to deal with these things every day that someone makes a purchase!

INCREASED MOBILITY

The daily grind of having to run the risk of accepting checks or even handling cash has essentially become obsolete with the emergence of OPS. OPS have a major hand in allowing companies who regularly participate in expos and trade shows where they are required to travel to receive online payments. For example: when making sales that are not online or in a store environment, owners (and consumers) are essentially confined to accepting cash or check payments, both of which can be extremely risky… But with an OPS, companies are able to travel and make sales DAILY, without method of payment being a concern.

SECURITY CONCERNS

Unfortunately, OPS is not a 100% fool-proof method of sending and receiving payments; it comes with its own set of risks just like every other everyday operation. On the consumer end, one may run the risk of their OPS account (such as PayPal or Google Checkout) being hacked – the same is true on the company end. “Two-factor authentication” has been created as a way of preventing potential break-ins; it does so by requiring account holders to to enter a six-digit code (in addition to their password) in an effort to eliminate any potential third-party scams.

With revenue (or receiving payment for goods/services) being the ultimate goal for all for-profit companies, whether a company is running their business solely online, or offers online sales in addition to having a physical store location, having (or not having) an OPS plays a major role in how they are able to conduct business on the daily basis. As a reader (and potential online consumer), how has OPS influenced your daily/regular shopping behavior?

Sources: http://sixrevisions.com/tools/online-payment-systems/

http://www.sba.gov/content/online-payment-services

Disadvantages of Online Payment Systems

In our last blog we discussed the advantages of Online Payment Systems (OPS) however some of the advantages are the very same reasons people shy away from using OPS.   It is much easier for younger generations, Y & Z Generation, to embrace change and seek the benefits of using innovative technology.  The Baby Boomer Generation on the other hand has the concept: if it’s not broke then why bother to fix it.  Older generations would rather take the extra initiative and time needed to travel to the store to make their purchases.  As well as spend the extra money for postage to send a check to make their bill payments.  Can you blame people for not fully trusting what they cannot see?  Have you ever given thought to the downfalls of OPS or are you just trusting that things will work as they are suppose to? Below we will examine a few of the negative aspects of using Online Payment Systems. 

Cons:

      Online Security: When we check out at a merchant and use our credit cards we must present photo ID.  However when making online payments there is no real authentication process to verify that the person entering the information online is not a criminal.  Without this verification process time becomes of the essence when it comes critical to dispute a fraudulent charge made using your credit/debit card because research is needed to prove your case.

**It makes sense to some to invest 20 minutes to drive to the location to make a purchase using check or cash rather than waste 1-3 days to dispute a charge because someone gained their credit card information.

      Missed Errors:  Can you imagine being in business since 1970, each time you needed to replenish inventory you contacted your supplier with whom you have a personal relationship to place your order.  The supplier delivers your goods in a timely fashion.  Upon delivery an invoice is provided and you either pay COD (cash on delivery) or mail in your payment.  Now 21^st Century technology is presented; you submit your order online which requires payment before delivery.  Once the goods arrive you realize you mistakenly order the wrong material.  Now you have you merchandise that cannot be used and you are out your money.  More time is now needed to return the “unnecessary material” to wait for the replacement order to arrive.  For many people the old way was more efficient.

      Fees: Management courses have taught us that there is an opportunity cost for every choice we make.  Surprisingly, OPS are no different.  During the Introduction of Info 3130 we learned that the overall objective of Information Systems is to reduce operational costs.  Since the core business of many organizations is not IT based and more specifically not specialized in Online Payment Systems an outside vendor is required to provide the online payment services.  An Online Payment Systems vendor like PayPal requires the merchant to pay a convenience fee ranging between 2.2%-3.9%.  Would it be beneficial to use their services as opposed to alternative payment methods? For corporate organizations this fee may prove to be inconsequential.  However, for the small business owner these fees could equate to astronomical figures eating away at the bottom line. 

I’m sure you’re thinking to yourself, you only identified three negative aspects of Online Payment Systems therefore the Pros outweigh the Cons.  However, many of the Pros center on convenience.  Do you think convenience is more important than security and preserving profit?  If you have a moment, please share your negatives experiences with Online Payment Systems and see if they align with the 3 major downfalls identified above.

Sources:

Laudon, Kenneth C. and Jane P. (2012) Management Information Systems: Managing the Digital Firm. (Twelfth Edition)

“Internet Payment Systems- Advantage, Cost, Online Payment Options, Security Efforts.” Reference for Business: Encyclopedia of Business, 2^nd Edition.  9/30/2012

< http://www.referenceforbusiness.com/small/Inc-Mail/Internet-Payment-Systems.html>

"Disadvantages of Internet Payment Gateways." Transactmoney. 9/30/2012

<http://www.transactmoney.com/transaction-articles/internet-payment-gateways.htm>

Pros of online payment systems

Online payments have been around for some time but the acceptance of it has increase dramatically over the years. But just like with anything it has its pro’s and cons.  You can pay just about any bill online from daycare expenses to even your hair styles. Banks offer their online bill payment services free to their customers. And let’s face it… Who doesn’t like something for free?   Think about it for a second when was the last time you mailed in a payment or dropped your payment off? I’m willing to bet it has been months and maybe years for some of you. What do you think the reason is for the raise in the use of online payments? In fact because of the use of online payments the US Postal service has had to close down serial post offices. Do you think the US Postal service could have been more proactive and should have foreseen how this would affect their business?    Do you think the cost of postage has anything to do with it people turning away from the postal service? Now back to the pros and con’s of the wonderful world of online payments.  We will cover the pros of online payments first. Make sure you check back to hear the cons of online payments.  

Pros:

Time Management- I don’t know about you but I’m a busy mom! All my bills are on auto draft so I don’t have to worry about it. Less time paying bills and more time with my family! It takes just seconds! No more written out checks and buying envelopes.

Convenience- You can just log on and pay anytime, day or night. We all are busy with all the things that life throws at us. It just takes seconds to set up your payment and after that you can have your payment scheduled to be paid every month.

Saves Money & Gas- with the price of postage on the raise! Why pay for a stamp when you can pay online for free Using an online bill payment service eliminates the need to pay for postage, and envelopes.

Avoid Late Fees- you don’t have to run to mail box to insure that your payment gets to where it is going in time. Now you can just set up auto draft or simply login and pay the day that your bill is due. You can set up online reminder services so you will never miss a payment again.

Less Paper- gone is the days of paper checks and receiving your bills in the mail. Now that the US is going green many companies will encourage customers to go paperless and encourage you to pay your bill online.

Security- Most people feel more comfortable paying via online payments with their bank vs. putting a check in the mail. Your bank’s online payment service is more secure then placing your check in the mail and hoping that it makes it there. The money is taking right from your account and reflects in your account as soon as you make the transaction.

Make sure you check back and please post to our blog!!!  We want to hear your thoughts J

Source(s):

Laudon, Kenneth C. and Jane P. (2012) Management Information Systems: Managing the Digital Firm. (Twelfth Edition)

 

Online Payment Systems Blog Introduction

Introduction to Management Information Systems

Online Payment Systems (OPS) are changing the way businesses make decisions. Today, consumers can simply log on to their favorite retailer site and pay for any product through their preferred payment systems. Throughout our blog posts, we’ll show the different types of Online Payment Systems in detail including systems like PayPal, Google Checkout, and Amazon Payments to name a few. These services can make shopping a very fast and pleasant experience. However, like all things, there seems to be many pros and cons of OPS. We’ll also discuss how businesses are reacting to the various forms of Online Payment Systems, finding new ways to compete. Many of our readers may not be taking advantage of these systems and we’ll go over how they can benefit in their daily life.

Throughout our posts, you’ll learn about Online Payment Systems. However, we’ll also show that there are pros and cons to this process, letting you judge whether or not you can benefit from this service.

Pros:

• Time Management - How can Online Payment Systems affect your daily schedule and possibly free up more of your time to do other things?

• Convenience - What’s easier, getting in your car and driving to a store, or simply logging on?

• Late Fees - Are there fees avoided by not having to deal with the hassle of remembering to go back to stores too late, incurring fees?

• Less Paper - Is it possibly better for the environment when you shop online?

• Security - Is it safer to log on to a website, avoiding a potentially dangerous world?

Cons:

• Online security - Identity theft is a huge topic in today’s world. Is there a danger in using online payment systems?

• Missed errors - Nothing is more frustrating than buying goods and waiting for a few days, just to find that there was an error in the order placement process, causing the order to be incorrect.

• Fees - Some online websites and payment systems charge convenience fees. Are they worth it?

We will also be discussion how OPS affect businesses. Online payment systems can affect day-to-day business in one of two ways: They can either simplify the purchasing process, or, they can cause it to become more costly and complicated. Services like PayPal, while very convenient, charge its clients a percentage of every payment that is received, which can become costly overtime. In future posts, we’ll go over in detail how Online Payment Systems can affect the day to day business activity.

An efficient online payments system is vitally important for the smooth functioning of the complex U.S. economy because of the increasing number of consumers who conduct business via the Internet. Consumers currently rely heavily on online payment systems daily for a multitude of transactions. These transactions include travel arrangements, shopping, filing and paying taxes, paying bills, banking transactions, and investing online. Consumers also utilize online payment systems that facilitate person-to-person payments, such as PayPal. As the widespread use of online payment systems continues, they will continue to evolve to meet the needs and expectations of consumers. Check back with us to learn more about how these systems affect the day to day life of people in our world.

Online Payment Systems are gaining momentum with each day that passes. Check back with us and learn through our blog posts if these systems are right for you and your future business endeavors!

Sources:

Tamayo, Xavier, Jimenez, Luis and Flynn, Shawn P. (July 13, 2005) Trends in Consumer Payment Systems. Electronic Substitution for Mail: Models and Result, 8. Retrieved from: http://www.phoenixhecht.com/treasuryresources/PDF/PitneyBowes_trends%20in%20consumer%20payments.pdf

Laudon, Kenneth C. and Jane P. (2012) Management Information Systems: Managing the Digital Firm. (Twelfth Edition)