Online payment: good or bad?

Say that you are surfing the Internet one day and you see a product that you have been wanting to get your hands on but unable to find it locally. You then log on a website that specializes in the trading of products (such as Ebay) and select a payment provider like PayPal to pay for your product and a few days later it's sent to your doorstep. That's a form of online transaction.

An article from The Star Online talks about online banking. Basically, it involves customers transferring their money to different banks through e-transaction and receiving confirmation in a matter of seconds. This procedure has already been implement in many countries around the world and may represent the way payment is conducted on a daily basis in the future. as Dorn (1997) emphasizes that "the basis of a new monetary universe is sand rather than paper - a computer chip rather than a Federal Reserve note". It won't be surprising to see cards and payment machines replace money bills in the future.

Pros: Very convenient to pay bills and transfer funds anywhere in the world, and on a more advanced level users can set their bills to be paid automatically from their accounts every month.

Cons: Users may be tricked into scam websites by following email links, and there is also the security risk of a user's account being hacked and the funds siphoned.

There may be still people out there who do not feel comfortable transferring their money online. Nevertheless, online transactions are here to stay and will continue to develop even more in the future, as Cronin (1997) mentions that "the Internet has emerged as a key competitive arena for the future of financial services". More and more opportunities will arise, not only for internet marketeers, but for consumers as well.


References:

• Cronin, MJ 1997, Banking and finance on the Internet, 2nd edn, viewed 15 June 2009, http://books.google.com/books?id=l94FEs-lMu4C&client=firefox-a
• Dorn, JA 1997, The future of money in the information age, 1st edn, viewed 15 June 2009, http://books.google.com/books?id=SL3-W7_bQTkC&client=firefox-a