ElectronicPayment

ITGS Business and Employment Natalie Hood 11E
= Topic: Electronic Payment =

- Credit cards - Debit Cards - ACH (Automated Clearing House) network
 * 1. What are three different methods of electronic payment?**

One-time customer-to-vendor payment: generally used when a person shops online at an e-commerce site, for example Amazon. How it works: one would click on the shopping cart icon, type in their credit card information and click on the checkout button. The site then deals with that person’s credit card information and sends them an email informing that their payment was received.

On some Web sites, a person could use an e-check, rather than a credit card. How a person would this, is by typing in their account number and their bank’s routing number. The vendor then permits payment through the customer’s bank, that would then either begin an electronic funds transfer (EFT), which is a computer-based financial transaction, or print a check and forward it to the vendor.

Recurring customer-to-vendor payment: this payment is brought out when someone pays a bill through a frequently direct account from their checking account or an automatic charge to their credit card. This is generally offered by phone companies, loan management companies and car insurance companies. Automatic bank-to-vendor payment: to use this, ones’ bank must offer a service called online bill pay. One would long on to their bank’s Web site, enter the vendor’s information and permit their bank to electronically transmit money from their account to pay their bill. For the most part, a person could select whether to do this manually for each billing cycle or have their bills automatically paid on the same day each month.

- Only enter account information (credit card number and shipping address) once - When coming back to the website, one only logs in with their username and password.
 * 2. What are the advantages to the customer of electronic payments?**

- Lowers costs for them - The more payments they can process electronically, the less they spend on paper and postage - Help them improve customer retention
 * 3. What are some advantages to businesses?**

- PIN/TAN system : the PIN represents the password, used for the login and TANs representing one-time passwords to justify transactions; most secure way of using TANs is to create them by need using a security token (depending an extraordinary secret and on the time). Usually online banking with PIN/TAN is accomplished via a web browser using SSL secure connections. - Signature based online banking (all transactions are signed and encrypted digitally). Keys – stored on smartcards or any memory medium (depending on the accurate performance).
 * 4. How are online payments made secure?**

- If a customer enters their information on the website they are going to pay for a product, someone, who isn’t part of the company, can read the data and save it. They would then be able to know your PIN code, and would also have the capability to access their bank account and get as much money s they want from it. - The people working at the company could lose their jobs – the person who sells it, gets the money. The person who sells it and someone who gets it. The person working at the company could also not know how to function the register.
 * 5. Describe two social/ethical issues which arise with electronic payments.**

- Name, address, phone number, email address, or company name - Log-in information - Social Security number of Federal Identification number - Credit/debit card information
 * 6. What information does VISA collect from its online customers?**

- They do not sell or rent anyone’s personal information to any third parties under any conditions, besides in the event of a bankruptcy or reorganization, or a sale of all or essentially all of their advantages.
 * 7. What is VISA’s policy regarding the passing on of customer information to third parties?**