Characteristics of e-commerce technologies
The following are the characteristics of e-commerce technologies (Burns 2002):
Ease of automated processing: A payer can now easily automate the generation and processing of multiple payments with minimal effort and cost. Previously, the dependency upon banks to handle most payments and the lack of a cheap, ubiquitous communications technology made automation of payment processes expensive and difficult to establish.
Immediacy of result: Payment immediacy occurs because of automation and the ability of the intermediate systems and providers to process payments in real-time. In manual, paper- based systems there exists a time delay due to the requirement of human intervention in the process.
Openness and accessibility: The availability of cheap computing and communications technology, and appropriate software enables small enterprises and individuals to access or provide a range of payment services that were previously only available to large organizations via dedicated networks or the transactional processing units of banks.
Loss of collateral information: The new technology dispenses with, or alters, collateral information accompanying transactions. This information has traditionally been part of the transaction, and has been relied upon by the transacting parties to validate individual payments. Collateral information can be defined as information:
• which is not essential to the meaning and intent of a transaction
• which is typically incidental to the nature of the communications channel over which the transaction is conducted; but nevertheless
• provides useful contextual information for one or more of the parties to the transaction.
Collateral information can include many things ranging from tone of voice in a telephone call to the business cards and letterheads and apparent authority of the person with whom the firm is dealing. Since information is received only via a single channel (such as an electronic message) in electronic systems, new processes are needed to support and reinforce payments in the same way as manual systems.
Globalization: Globalization, or the minimization of geographical factors in making payments, is an obvious aspect of the new payments systems. Its effect is upon areas such as size of the payments marketplace, uncertainty as to legal jurisdiction in the event of disputes, location and availability of transaction trails, and the ability of a payment scheme to rapidly adapt to regulatory regimes imposed by one country by moving to another.
New business models: New business models are being developed to exploit the new payment technologies, in particular to address or take advantage of the disintermediation of customers from traditional payment providers such as banks. Disintermediation is where the technology enables a third party to intervene between the customer and the banking system, effectively transferring the customer’s trusted relationship with the bank to the new party.
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