Payment Options and Online Services - Credit Card Payment, Digital Cash, Digital Wallets, Electronic Checks, Peer-to-peer Payment
As online shopping grew in popularity throughout the late 1990s and early into the 21st century, so did the number of methods by which shoppers could make online payments. Some methods were quickly adopted by electronic merchants and their customers, while other methods, due to issues surrounding security and ease of use for both payers and payees, were rather short-lived. By 2001, along with more traditional credit card payments—which accounted for roughly 50 percent of all online payments—options for online shoppers included making online payments via electronic withdrawals from a checking account or from a prepaid debit card.
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After selecting products or services they wish to purchase, the majority of online shoppers opt to make payment via credit card. They begin an online credit card transaction by completing a merchant commerce application. To ease consumer concerns regarding the risks involved in transmitting credit card numbers via the Internet, most merchants use secure electronic transaction (SET) or Secure Socke…
Another downfall of the credit card payment method is that it excludes anyone without a credit card. To allow individuals without credit cards to make purchases online, many firms began devising online cash payment systems. A prime example of a digital cash payment method provider is InternetCash, which was founded in March of 2000. InternetCash users purchase a cash card at a retail outlet, such …
Like the digital cash firms that attempted to create an alternate currency for the Internet, digital wallet services proved particularly short-lived. Companies like American Express Co. and Wells Fargo & Co. ventured into digital wallet technology in late 1999 and early 2000, only to discontinue those offerings in 2001. Essentially, a digital wallet allows online shoppers to save in a singl…
Electronic checks offer another method of online payment. Fidesic Corp., founded as CheckSpace Inc. in February of 2000, allows small businesses to make and receive payments via email. In short, Fidesic clients may present bills and make payments to other Fidesic clients via a simple email message. Using the bank account and routing data provided by its clients, Fidesic is able to transfer money b…
Other than credit card transactions, the most popular online payment option is the peer-to-peer (P2P) option by which individuals can send one another payment via a third party. PayPal is the leader in this category, boasting the largest Internet-based payment network in the world with roughly 8 million customers. Founded in November of 1999, PayPal began to attract attention from the millions of …
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