Should We Be Concerned When Using Electronic Payment Systems?

The world now operates largely through the World Wide Web. New internet based companies are springing up all the time to offer consumers products for less and without the hassle of having to pop down to the shops to pick the item up.

All of these websites need to have some form of electronic payment system to allow the customers to securely pay their money to the company in question and possibly the biggest single issue with shopping on the internet is the threat of your bank details being hacked by some online virus or tracker.

Obviously there will always be people that will attempt to hack peoples bank details, just like there will always be people who attempt to rob banks or perform muggings. But thankfully there are a number of individuals that have the task of constantly coming up with new ways to make the electronic payment systems more secure.

There have been several variations of the online electronic payment system, but the standard version that most people use today is PayPal. This service works as a go between for the client and the company selling products. The money is transferred securely to PayPal who then hold the money before passing it on to the company. Because of this there is no exchanging of bank details between the two individuals. All the bank details are stored on PayPal’s secure servers.

Other variations of the electronic payment system involve using a series of security number and passwords. For instance VISA’s latest version of their online electronic payment system includes using the three digit security code from the back of the card and also uses a specified password that the owner sets to verify that the card hasn’t been stolen.

Obviously you will never really eliminate all card crime, because as quickly as these companies can manufacturer new methods of keeping us all safe, someone is coming up with a way to crack the code and give the advantage back to the thieves.

If you really want to make sure that you stay safe when ordering your products online, then there are a number of rules that you should follow. Firstly, online shop on sites that you know are genuine and you trust, secondly ensure that you machine is updated with the latest security patches from your software manufacturer, and thirdly ensure when purchasing that the web address starts with https. As long as you follow these steps you should have a happy and safe online purchasing experience.

Why the Germans Do Not Prefer Electronic Payments

The world of payments is rapidly moving towards the digital options. However, still several customers use cash and they finalized their transactions by using actual cash.

Industry experts are predicting that cash will be obsolete in a few coming years. However, there is a European country which is following a totally opposite trend. In Germany, the use of physical cash is more than any other country in the world. According to a research conducted by Federal Reserve, the people of Germany use cash in 82 percent of their financial transactions. 13 percent of these transactions are executed by using debt cards while only 2 percent of the transactions are carried out using credit cards. Germans keep more cash in their wallets as compared to the amount carried by people in other countries. On average, each German keeps $123 in his wallet. As per the research, the average amount kept in the wallet by Germans is almost double as compared to the quantity of cash kept by people in other countries. Americans keep $74 in their wallets, on average, while the people of Netherland carries $51.

The people of Germany not only like to pay in cash but also, they want complete freedom to do so. A recommendation to limit the use of cash faced extreme opposition from consumers and political experts. According to Guardian’s report, there was a ban imposed in Germany on making any payment via cash which has worth more than 5 thousand pounds. The purpose of this ban was aimed at stopping money laundering and the use of cash to support terrorist activities. Such bans are commonly imposed in other countries of European Union but in Germany, this suggestion faced strong criticism by the majority of the political groups.

According to Guardian, the head of Germany’s Central Bank, Jens Weidmann said while talking to the journalist of Germany’s newspaper named “The Bild” that if Germans get the impression that the use of cash is going to be gradually restricted in the country, it can prove to be actually fatal.

Even the newspaper was also against this suggestion. In February 2016, the newspaper published an open letter and urged the readers to sign it and send it to the finance minister.

The commitment of German people with the use of actual cash is so strong that most of the people are storing the cash in their houses. As per Wall Street Journal, the majority of Germans are withdrawing their money from banks and storing it in the safes inside their houses. This trend is so intense that a vault making company reported 25 percent increase sales increase in the first half of the year 2016. Several other such companies are delivering their maximum production in order to meet the increased demand of vaults.

Why do Germans Prefer Cash?

Despite the fact that electronic payments have made the things extremely easy for the people, why Germans still prefer physical cash over electronic payment? One reason for this is the security. Germans believe that payments via physical cash are more safe and reliable as compared to electronic payments.

To cater these issues, it is recommended that such a payment partner should be chosen which is compliant with the standards of data security. Moreover, the payment processor chosen by German people should accept several payment options. Online traders can only accept electronic modes of payment, but if Germans are provided with multiple payment options, they can easily choose the one which is best suited to their needs and expectations.

According to the Wall Street Journal, another reason behind German’s hesitation regarding the electronic payment is inflation. Because of the negative interest rate implemented by the European Central Bank, the Germans have to pay for making the deposit into the bank. Furthermore, the history of hyperinflation also made the people of Germany reluctant towards the use of online payments.

Because of the fact that the payment systems continue to get more and more advanced, it is expected that with the passage of time, the Germans will also move towards electronic payments, especially, when they have to make international payments. Business companies have to work hard in order to reach German people, but these companies shouldn’t give up.

International Payment Processing: The Rise of Local Electronic Payments

There is no point in denying it. Technology is changing more rapidly than we might ever have imagined two decades ago, and electronic systems have now forever changed the way we work, communicate, and even the way that we purchase and enjoy books. Predictably, this trend has also affected the way we pay. Traditional payment avenues, such as cash and cheques, are being systematically replaced by innovative electronic forms of payment as markets respond to growing demand. In some European areas, like Scandinavia and the Netherlands, the use of cheques is virtually nonexistent. In 2009 the UK Payments Council reacted to declining cheque use by proposing they be phased out completely! (This has since been rescinded.) Rapid consumer uptake of electronic payment systems has meant that some countries’ banking systems are rushing to catch up and are currently very busy perfecting local electronic payment systems that can cope with an extraordinarily high volume of paperless transactions.

Popular forms of electronic payment processing are:

Direct Debit – a mechanism where your customer gives you authorization to debit funds directly from their bank account.

EFT – a blanket term used to describe the electronic transfer of money.

ACH – Automated Clearing House – the US specific system for processing electronic payments.

SEPA – Single Euro Payments Area – This is a standardized form of electronic payment used throughout the Eurozone. Using SEPA payments, funds can be transmitted across borders with the speed, simplicity and cost-effectiveness of a local domestic payment.

The electronic trend is heavily promoted by banks, as electronic payments mean less overhead and expense than those systems that require manual processing, such as cheques. They are more than willing to invest in systems that will deal with epayments effectively, ensuring that people can send and receive funds quickly and securely, moving as fast as their computers will allow.

In the US, bank-to-bank transfer payments are cleared through the Automated Clearing House, or ACH, system, which processes huge volumes of debits and credits electronically. Across the pond, the UK has developed FasterPayments, which offers the speed of a wire transfer with the administrative simplicity of an eft. Throughout the Eurozone, payments are streamlined by the existence of the Single Euro Payments Area, a group of countries within which a payment can cross borders and time zones with the same ease and efficiency as if both parties were in the same country.

You can be sure that as the demand for electronic payments grows, more countries will work to create and streamline their own specific electronic payment services to deal with the need. Payment processing companies also respond to the growing demand for electronic payment processing by offering a full suite of local electronic payments.