Online payments are not a recent development. Online transactions have been in play since the establishment of the Stanford Federal Credit Union in 1994. What is astounding is the rise in online transactions in recent years. The growing popularity of digital processes and the arrival of the 2019 pandemic have added more factors to the steep incline in e-payments. More and more people have begun to opt for online transactions rather than in-person or cash payments.
The most obvious reason is the convenience, of course. There are many other pros and cons to it, however, as we will see the experts elaborate on, in this article.
Pro: Reduced costs, optimization, Con: Technical difficulty, fraud
According to Chris Taylor, the Marketing Director for Profit Guru, the pros are: “Reduced processing costs: Rather than employing a cashier or incurring the expenses associated with sorting payment slips, retailers can set up payment processes with little or no initial expense and only pay low transaction fees if a sale is recorded on their platform. Customer path optimization: Without the online payment option, prospects will be unable to experience the satisfaction associated with online shopping – today’s global shoppers are now accustomed to getting immediate approval of their order and, in the case of digital purchases, immediately receiving the goods or access to them.” Taylor counts technical difficulties and the risks of fraud as the disadvantages of online payments, “As for any system that is reliant on technological resources, online payments are susceptible to disruptions and downtime. Technical maintenance activities on online payment gateways or the card network infrastructure are usually time-limited, declared in advance, and planned during times of low traffic on eShops, often at night. Fraud’s financial expense: As consumer demand for online purchases has grown, so has the number of fraud attempts in the market. A significant drawback to internet purchases is the merchants’ and consumers’ vulnerability to various malicious threats. From identity fraud to website vulnerabilities and phishing attacks, hackers are becoming more sophisticated in their efforts to disrupt online transactions.”
Pro: Personaliaiton and Optimization, Con: Security and Fees
“Online payment systems, especially when they are well integrated with CRMs, offer the buyer a more personalized and optimized customer journey. They make it easier to pay because they allow payment with various methods and one-click checkout makes the purchasing experience quicker and less inconvenient for people on the go.” says Bryce Welker (CPA), the CEO of CPA Exam Guy. He says security and costs are the most significant disadvantages of online payments, “The two biggest cons that come to mind are security and fees. How secure is the website’s online payment system–what kind of encryption does their site use? If an account is required to make payments, do they utilize two-factor authentication? Online payment platforms also come with fees. When I’m buying something online, especially if it is a substantial purchase, I want to know how much extra I am paying to compensate for the fee that the platform is charging to the seller.”
Pro: Increased speed and mobility, Increases Revenue, Con: Impulse Purchases, Security Risks
“Instantaneous purchases in the online checkout room result in increased transaction speed. Another attribute that can be called a plus is mobility. This is because consumers no longer tend to bring cash and can now make purchases with their e-wallets or key fobs. Increased revenue: Electronic payment networks are growing in popularity, which means there are more opportunities for expanded purchases. With cash use declining, this has not resulted in fewer revenues, but rather an increase.” says Edward Mellett, the Founder/Co-Founder of WikiJob.co.uk. Expanding on the cons, he explains the pitfalls of e-payments for buyers, “Purchases made on impulse: With so many temptations available online, it’s easy to fall victim to impulse purchases. This ensures that you’re unable to adhere to a budget, which is a near-impossible goal in some situations. Increased revenues make sound economic sense and have an ideal opportunity for merchants to increase revenue. Threats to security: As is the case for any piece of technology available today, these technical technologies are susceptible to security vulnerabilities and breaches. This is why it is important to safeguard your private information to the maximum extent possible. Once again, immediately notify your bank or financial institution if you suspect anything unusual. Servers may go down for extended periods of time, transfers may bounce back, a payment may not be cleared, or you may be paid twice – both of these considerations constitute security threats that you should be mindful of.”
Pro: Convenience, Con: Card Information Theft
“Online payments avail the buyers to purchase any type of product or service online. It helps the buyers by avoiding the hassle to visit the store physically or carrying cash to pay the creditors. In this covid pandemic, online payment has become a foremost need for all type of buyers to avoid human interaction. The best two advantages of online payment for buyers are; paying bills for any type of product or service from anywhere of the planet and the chance to perform a cashless transaction. On the other hand, the best two disadvantages are the risk of card information theft and inconvenient for offline purchase.”
John, Marketing Specialist at Infizius; an IT, Digital Marketing and Game Development Company
The advantages are many. However, to avail of them, you need to be aware of the pitfalls and risks of online payments. Being smarter about your online transactions can help you reap the benefits while avoiding potential damages.