The Ultimate – Alternate Payment System (APS) -Pt.1
A global online method of payment, one which facilitates online commerce for all Internet users in every country has not yet been created. I’m going to be taking a closer look at building our ultimate global payment system in the coming months and I invite reader participation. If you would like to see your ideas or options included, please leave us a comment.
I’m sure we will be borrowing from some of the most successful existing digital currencies such as Webmoney, e-gold and PayPal.
Today, credit cards account for approximately 90% of all online retail purchases. However, credit cards are not the best online shopping tool for everyone. Especially in small developing nations, credit card penetration and online usage has not kept up with the Internet’s rapid growth.
Millions of people in countries all over the globe have Internet access but no credit cards, bank accounts or local connection to an online method of payment like a prepaid card. They have no way to shop and spend on the Internet :-(
A perfect example of the ‘catch 22′ situation is India.
India currently has 5% of the world’s Internet user population and ranks 4th in number of Internet users. Reading these big numbers, you might conclude that India leads the world in retail online commerce. However, this is not the case.
India has NO online payment system for all those users and credit card penetration there is extremely low. Additionally, e-gold is not allowed and there is no online system like PayPal which accommodates a connection between local bank accounts and an online eWallet.
This number is expected to double over the next few years – a staggering 100 million users – more than the population of most countries! So how do all those Internet users in India shop online? They don’t….yet. Our ultimate online APS has not yet been created.
The Credit Card Legacy
Credit cards were not originally designed to support e-commerce. Fist popular in the 1960’s, personal computers had not yet even been conceived!!
However, since credit cards and merchant accounts have become so convenient to so many, they’ve been adopted by most online commercial businesses. Although, their online usage has also created a massive amount of associated card fraud. Data loss of customer records and identity theft are other problems which accompany online credit card sales.
What Should The Ultimate APS Include?
An important feature of this new digital money should be its availability to users. Access to user accounts can not be based on a ‘credit score’ or some local bank rating. Real digital money, just like cash, will be accessible to everyone equally including the rich, poor, uneducated or unemployed. Everyone should have easy access to account funding and online spending (both merchants and personal users).
Using this digital money should cross all ethnic, religious and geographic boundaries. It must be universally accepted and not based on any one language or national currency. A person in New York City must be able to easily accept a spend from a shopper in the Aceh Province of Indonesia or the City of Manaus, Brazil without any language barriers, payment delays, unknown monetary conversions or risk of chargeback.
Our new digital money should allow online users to pay anyone, anywhere at anytime. It should allow global payments between big business as easy as it transfers value from one friend repaying another friend for last night’s dinner.
Safe & Secure
The ultimate digital currency should offer users safety when sending or receiving payments, while it remains convenient and instant. When shopping online retail customers are very used to a safe and risk-free transaction environment. If consumers can pay securely online, they will buy and keep coming back. This ’safe’ environment should draw all kind of users, including the ones now scared to shop online due to the threat of credit card and bank fraud.
Any new online money system should allow a safe payment from the registered user’s bank account but also incorporate easy funding from multiple non-bank sources such as a cash payment at a local established business. Multiple methods of payment from users are absolute required items, not everyone today has a bank account or credit card.
Continued…
Mark,
I’m glad that this topic came about. There are numerous online payment systems out there right now but none seems to have all the “qualities” that the general public would want.
For buyers, the most convenient would be a paypal-like system wherein you can use your credit card. But sellers despise Paypal’s buyer protection program which lets dishonest buyers easily scam honest sellers.
For me, the one closest to perfection is moneybookers since everyone has to undergo strict verification processes. And there are no charge-backs to worry about.
I wish e-gold would learn from moneybooker’s system of verification to minimize all these fraudulent hyips etc.
Webmoney’s system would be too complex for the normal internet user. It is too secure. E-gold’s security is quite perfect for me right now.
Cheers and great article!
Steve
Re: steve mar, 21
I also believed, at one time, that you didn’t have to worry about chargebacks with Moneybookers. That is simply not the case, they can and will chargeback..