The impact of internet payment systems upon the retail sector Essay

The impact of internet payment systems upon the retail sector - Essay Example One of the most classical and beneficial advancements of the internet, that has been critically beneficial for growing cross-border trade and commerce, has been the internet payment system or e-trading concept; some other titles for the same are e-shopping, e-business, e-marketing – where ‘e’ simply implies conducting transactions via electronic medium. Classically, ‘shopping’ or ‘purchases’ took place face-to-face i.e. purchase against cash. With the advancements of the banking system, some purchases moved against the cheque system, and then against credit cards – plastic money. However, the arrival of the ‘e’ age, it became critical to have a reliable source of payments since purchases technically took place over the internet. Such situation gave birth to the need of a medium of payment other than credit and debit cards. Subsequently, there came third-party payment systems such as PayPal, Bank-transfers, Alert-Pay, E -Gold, etc. With the advancements of ‘e’ purchases, such third-party systems have assisted in providing enhanced sales. The Impact of Internet Payment System on Retail Sector The retail sector has significantly benefited from the advent and advancements of the internet payment system. In particular, as the said system has eased the process of e-shopping with added security features. Initially, this turned out to be a huge competitive edge for the smaller retailers as they embedded e-shopping along with internet payment systems, providing the ease of shopping from home comfort to the customers, pushing the competing bigger names to adapt the same strategy. However, initially, the advantages of this internet payment system were not known to be gone as far as they are today. In the initial phase, it was just assumed to provide comfort and ease of shopping, reducing the cost of selling for the seller, increasing margins, reducing the waiting-line phenomenon to a higher degr ee. Today, the cross-functional advancement of the MIS has led the firms into realizing the long-run potential of the various aspects of such payment systems. Prior to such advancements, the concept of home delivery and cash-on-delivery prevailed, which was not very encouraged by the retailers across the world in all sectors and industries. Fake order placements and false addressing were common issues; but internet based payment systems have reduced such issues to a much greater extent, and also made the consumer market much more mature. As a buyer now knows that internet based payment system reveals complete identity and contact information, and with IP tracking facility over the internet, there are lesser chances of individuals involving themselves in such or similar activities. The first and foremost advantage of the internet payment system is the ease of marketing for the marketers; marketers rely solely on the information and crave for reliable and authentic sources of informat ion. When purchases are made through paper money, the buyer remains unknown to the seller. However, when plastic money and internet payment systems are involved, the buyer no more remains anonymous; rather the buyer along with the buying habits and practices becomes visible to the marketer, and thus, marketers can develop groups and strata and segments to ensure that they target the right audience with the right combination of products and services. When it comes to e-marketing, marketers need as accurate of a data as possible, primarily due to the fact that e-marketing relies heavily on reaching the right customer –