Question

1. Briefly explain briefly the alternative form of payment that you researched and how it works as an alternative to traditional cash.
2. What are the advantages of this form of payment?
3. Are there disadvantages or risks associated with the form of payment that you researched?
4. As a consumer yourself, do you use any forms of cash alternatives? Which ones? Do you have concerns about the security of this payment method, and if so, what can you do to mitigate these?

Answer 1

Alternative methods of payment are means of making a payment other than cash. Alternative methods of payment (AMOP) include payments made using a credit or debit card, loyalty program points, cryptocurrencies like bitcoin or virtual wallets like Google Pay or Apple Pay. Most businesses accept non-cash options in transactions, as consumers find it more convenient to use a card than to carry around cash.

In some cases, businesses will allow a consumer to pay for a purchase by adding the amount owed to another bill. For example, a cell phone company may allow a customer to add the amount owed on a new phone to his or her monthly phone bill. This allows the customer to spread the cost of the phone out over several months, while also allowing the cell phone company to get the customer to sign a contract. Frequent flyer programs are an example of alternative methods of payment. Rather than pay for the cost of a flight with a credit card, the cardholder will use points that he or she has accumulated from using the card to make other purchases. The value of the points are defined in the cardholder agreement. Loyalty programs are another form of alternative methods of payment. For example, a restaurant patron may receive bonus points for each dollar spent. The restaurant may offer discounts on food and beverages according to how many points the patron has accumulated. This is an increasingly popular method of AMOP for restaurants that create payment applications for mobile devices.

One such alternative method of payment is cryptocurrencies which has undergone a transformation since the debut of Bitcoin in 2009. Bitcoin is an example of a cryptocurrency, or an electronic currency that uses cryptographic technology to ensure that the payment is safe and secure. Bitcoin and other cryptocurrencies have received widespread attention in the media and from investors, many of whom speculate in cryptocurrencies in an attempt to get rich.

However, there are some disadvantages associated with these alternative forms of payments such as Certain mobile methods are prone to security leaks or An update can cramp your style or high fees for online transactions or Clients have too much control and on top of all Keeping track of all the laws and security precautions which can prove tricky sometimes.

After all the advancements, there is still a fear exists among customers regarding these alternative payment methods. The Identity Theft Resource Center(ITRC) says its research shows that 87 percent of consumers who have made a purchase or bank transaction online in the past month are concerned about the safety of the personal identifying and financial information they transmit. With growing numbers of eCommerce and m-commerce transactions, there are new opportunities for cyber criminals.

It’s our responsibility to have the purchasing process under control and reduce the risk of fraud at every step of checkout. Data thieves’ knowledge of how new technologies work is impressive. For that reason, reducing the vulnerable points of payment processing is a crucial part of every eCommerce business. We need to know the payment security solutions. One should ensure various security parameters such as SSL protocol, PCI compliance, 3D secure, Address Verification Service etc.