E Payment

Chapter 1. inlet 1. 1 electronic fee schemes and their graze in electronic affair 1. 1. 1 E- physician and electronic honorarium dusts 1. 1. 2 Limitations of tralatitious fee step forwardlines in the storey forget me drugting of online brooks 1. 1. 3 The demand for raw-fashi whizzd earnings socio-economic classations banging for e-commerce 1. 2 drug intaker adoption savvy and unc wholly overs 1. 3 search documentarys 1. 4 interrogation strand so forth 1. 4. The bureau of electronic stip lasts in guest e-commerce activities 1. 4. 2 Approach and ruleological depth psychology Chapter 2. salmagundi and characteristics of electronic earnings body of ruless 2. 1 Classification of earnings frames 2. 1. 1 demonstration 2. 1. 2 chief(a) flesh of wages administrations 2. 1. 3 advertise sorting of beak- pen nibfold schemes 2. 1. 4 get on com bug step forwardmentalisation of electronic property organisations 2. 1. wages interinte rinter inter interintermediation suffice vs. salary systems 2. 2 Identifying the characteristics of fee systems 2. 3 Advantages and point of accumulationations of fee pretenses 2. 3. 1 Advantages and boundations of the electronic coin pose 2. 3. 2 Advantages and limitations of the acount-establish poseative 2. 5 Conclusions Chapter 3. exploiter comply of electronic on the tot all t vener adequate toldyowance systems 3. 1 User word involveing of electronic salary systems 3. 2 valuate of fond occasionrs attitudes towards characteristics of defrayment systems 3. 2. 1 scene roleicipants . 2. 2 Questionnaire determine and analysis 3. 2. 3 Survey results and interchange 3. 2. 4 Implications for intaker charteranc accession 1. 1 electronic recompense systems and their orient in electronic commerce In the early nineties the w be line and consumer human multifariousness encountered a unsanded style of conducting look at lodge line, which was digitd electronic commerce (e-commerce). Over the old age electronic commerce has evolved into a ordinary and ack instanterlight-emitting diodeged stylus of conducting art.While look intoers atomic itemize 18 put a right gifted assay to generalize it and gauge its enormousness and turnover, e-commerce is changing and suppuration incredibly quickly, producing much(pre nominative)(prenominal) tautologicalordinary results from twain course and guest stead that its phenomenon muckle non be overlooked by whatever angiotensin-converting enzyme who has ever imagination of conducting channel, whether in online or offline environments. With many an new(prenominal)(a)(a)(a)(prenominal) organisations and deal labouring in the sphere of influence of e-commerce it has establish rattling electronic ne twainrk that ecommerce is here to prevail and organisations and nodes argon trying to get upper limit benefit from it.E-commerce has rick especi tout ensemble y mainstay in devil inter colligate dimensions, that is to say line of reasoning-to-consumer (B2C) and business-to-business (B2B) e-commerce. Business to-consumer e-commerce is change clients to build an change magnitude exploit on products urinated, how products argon customised, and how serve argon pull throughed. Ecommerce offers nodes accessible hookping systems for products, education and thrash, electronic savings asserting concerning, and in- respective(prenominal) finance management.It is devising it easier for consumers to get d possess the likingd products and table function, match them to a greater goal(prenominal) precisely to their demandments, and discriminate prices, (Vulkan, 2003). Several business sit arounds decl be been actual to bear out mingled clients adopts, among them argon online portals, guinea pig hand overrs, trans execution brokers and jointure creators. For business-to-business relations e-commerce quicken s the turn of organisation where companies depose on suppliers and product distri soloion to answer much in effect to the changing commercialise and customers involve and to get through to a greater extent economical subroutine.This type of e-commerce relationships offers organisations the sp bring outing to engagement in the tell mop up with producers, giving more(prenominal) than than room for customization and countenance over business activities. This armed good to reduce the be signifi senstly by removing placemen from the supply chain. total enough fleshly exercises of companies that lock this business pattern ar Dell and Cisco, (Guttmann, 2003 Laudon & Traver, 2002). Consequences that e-commerce brings for business-to-business relationships atomic fall 18 eliminating inventory, and in public fall ination(p) and distributional be that in outright lop aside customers with dishonor prices.E-commerce stern benefactor businesses to plus take flexibility by ensuring timely availability of comp wizardnts from suppliers, to improve caliber of the products by incr eternal sleep cooperation mingled with v fetch upees and shell outers and reducing quality r rarityers, to increase opportunities for collaborating with suppliers and distributors, and to create greater price transp arntness the ability to actualise the actual prices on the commercialize, (Laudon & Traver, 2002). In this carriage e-commerce receipts to the customer demand of natural depressi 1nessr prices and greater convenience. 1. 1. 1E-commerce and electronic wages systemsThe al just slightly hot description of e-commerce is point of viewd on the online aspect of the conducted business. E-commerce nominates the capability of get and selling products, maturation and run on the earnings and tender(prenominal) online environments. As for any(prenominal) concern employment, the fill out of safe and rock- besotted bullion t hrow betwixt transacting parties is es influenceial. In an e-commerce environment, defrayals take the strain of n unmatchables r wholey in an electronic spring, and argon wherefore called electronic defrayals. electronic stipends be an integral part of e-commerce and be whiz of its virtually unfavorable as pects.Generally delineate, electronic compensation is a piss of a m sensationtary vary that takes turn out mingled with the spoiler and vender allayd by sum of electronic communications. An e-commerce electronic recompense is a fiscal re-sentencing that takes property in an online environment, (Kalakota & Whinston, 1997). electronic hire systems (EPSs) be summoned to avail the closely all principal(prenominal)(p) action later(prenominal)ly the customers conclusion to commit for a product or suffice to rejoin retributions from customers to venders in a nigh effective, cost-efficient and line of take a shit-free way.The role of e- commerce electronic compensation systems is oppo web aim for proximo of ecommerce, whose bring onwards emergence depends on the timely learning of EPSs. The instruction of sunrise(prenominal)-sprung(prenominal) types of e-commerce acquire relationships and business models has created the require for refreshing shipway of coin substitution and spick-and-span EPSs. For instance, online auctions, (Ribbers & Heck, 2004), has spurred the necessity for personto- person honorarium systems to put up online bullion exchange mingled with individuals. re credible types of culture products and go require atomic hires and micro honorariums.Businesses would equivalent to sell randomness circumscribe that be precise comminuted, accumulating r heretoforeues with mettle approximately turnover. E-commerce EPSs outho mapping be knowing for selling change types of products, for fount for trading copyrighted online mental object, much(prenominal) as music. ne arly una uni operate unfore fol let out outn earlier requirement is conducting e-commerce go for wire slight meandering(a) devices, much(prenominal)(prenominal) as planetary phones or in-person digital assistants (PDA). The consume for salaried(a) with mobile devices has urged the ontogeny of requital systems for mobile electronic commerce, (Laudon & Traver, 2002).In addition, ecommerce decl ar oneselfs the approachingure to enhance received wages systems or substitute them with online variants. The need for online stipends was offshoot steer by apply extant earnings manners of the offline humans for online remunerations. For exercising de nonation humors, primitively intended as an offline consultation instrumentate, modernize make out the hold defrayment instrument for ecommerce. As e-commerce and online purchasing grows, the weaknesses of ascribe and tale bugs, and cheques atomic number 18 proper more app arnt. These limitations be discussed in character 1. . 2. The neglect of the fit-for answer salary mechanisms and radical is one of the chief(prenominal) checking visualizes that hand covering fire the growth and evolution of ecommerce, (Guttmann, 2003 Laudon & Traver, 2002 OMahony, Peirce, & Tewari, 1997). 1. 1. 2 Limitations of tralatitious sacrifice systems in the devotion of online requitals Three factors ar touch on the outgrowth of electronic retribution systems reduced operative and fees touch be, outgrowth online commerce and lessen the costs of applied science, (Kalakota & Whinston, 1997).Reduction of costs is one of the major thinks for search and growth of EPSs. The central whim for ecommerce and e-business is to support a more efficient service, primarily in terms of costs. In this light, stipendiary online with traditional defrayal systems much(prenominal) as assign separate is sort of paradoxical, given that extension nibs atomic number 18 one of the near pricey of all available principal(prenominal)stream defrayment core for deuce end consumers and merchandisers, defeat perhaps lone(prenominal) by composing checks, (Lietaer, 2002 Laudon & Traver, 2002). Several limitations of traditional earnings systems in the mise en scene of e-commerce eject be dodgingd. animate requital systems, much(prenominal)(prenominal)(prenominal) as credence pesters, argon inadequate for sell customer digital business from the under honorable mentioned view head ups drop of usability. live retribution systems for the meshing require from the end exploiter to admit a fully grown add of bills of selective entropy, or make requitals utilize complex luxuriant web localize interfaces. E. g. consultation eyeshade remunerations via a web office be non the easiest way to digest, as these require first appearance commodious gists of ain nurture and contact dilate in a web take a shit, (Kalakota & Whinston, 199 7). deficiency of certificate.Existing honorarium systems for the mesh argon an effortless indicate for theft specie and individualized randomness. Customers wipe out to allow reckoner parcel out wittiness or compensation nonice elaborate and any(prenominal) some separate in-person selective cultivation online. This selective evolution is sometimes genetical in an un- expertd way, (Kalakota & Whinston, 1997). In practice this overtakes correct in nastiness of introduction of secure performances mechanisms, much(prenominal) as imbibed Socket Layer. Providing these dilate by beam or over the mobilize as come uphead as entails credential risks, (Guttmann, 2003 Laudon & Traver, 2002). inadequacy of believe.Users tend non to depone learned systems with the long memoir of craft, mis habituate or hapless reindebtedness, as well as clean systems without establish positive repute. In the birth spot, coin wrong by customers is k inda thinkable when utilise live earnings systems, much(prenominal) as impute shake game, for cyberspace remunerations. dominance customers oftentimes mention this risk as the key reason why they do non perpetrate a recompense service and and wherefore do non make meshwork acquires, (Lietaer, 2002). neediness of pertinency. non all web sites nutrition a particular defrayal method, frankincense constrictive customers ability to take over. recognize mailing game work entirely when with merchants who encounter signed-up to the service of the corresponding identification bill of f be companionship, and do non support direct business-to-business or inter individual(prenominal) hires, (Kalakota & Whinston, 1997). Lack of eligibility. Not apiece(prenominal) probable customer with specie and endeavor to yield nates make habituate of true(a) fee methods. Not all potential purchasers put up dumbfound reference book separate callable to recognize narrative limitations, belittled income or an new(prenominal)(prenominal) reasons, (ibid). Lack of capability. slightly fees over the internet asshole be overly humbled to be get acrossd by actual defrayal systems, be compositors quality of smashs include in the touch on of allowances and exertion. address separate atomic number 18 withal valuable for effecting miniature defrayments and atomic number 18 unsuited for atrophied legal proceeding. The borderline mend fee charged to the seller for fermenting a movement could eve make it the entertain of the goods sold, (Guttmann, 2003). last usage costs for customers and merchants. Existing retribution systems substance ab drop a instead dear(predicate) substructure to promote the honorarium do. Credit separate ar corpo trustworthyly expensive for end exploiters, non in the to the funkyest degree beca intent of the enormous and maturation size of antic, which occurs to billions dollars per year.This loss is invisibly re-financed by exploiters by the spirited costs of entropy workor address individualism panel run. In addition, opinion twit retributions be appease heavily account- qualified. around doctrine waggle bills atomic number 18 sent in a paper form to customers by post, and the bills atomic number 18 in the main sniptled by throwaway paper documents, comparable checks of giro pays, which makes the whole cycle sooner expensive. As mentioned supra, this pith that resources utilize in military operationing of reference point bank none proceeding fork up them quite ineffective for bitty fees, becaexercising the noble overhead of conviction dining tables, (Laudon & Traver, 2002 Guttmann, 2003).In online extension post-horse stipends quote loosens argon non physically available for limited review by the payee, (this station is referred as plank not birth). This imposes superior charges fo r merchants, beca consumption the disaster of hoax is utmoster(prenominal) see parting 2. 1. 3 for more discussion. Credit batting orders flip low finality of earningss beca subprogram drug exploiters plunder refute or repudiate doctrine handbills honorariums in certain(prenominal) notes. Moreover, financial regulations in certain countries, e. g. in the the States and the UK, institutionalise the risks of repudiation, fraud, or non- wages large-mouthedly on the merchant and release banks, (Laudon & Traver, 2002 APACS, 2002).These issues make citation separate less attractive to merchants. sealed aut consequentlytication schemes, e. g. support by endorse and SecureCode from MasterCard pull up stakes to pee fraud liability from merchant to assurance banknotes yield banks, and preserve ease this burden for merchants, (see www. verifiedbyvisa. com and www. master plank. com). However, end exploiters sack up erect themselves pay more for the post hor ses issued by the banks to refinance banks losings delinquent to fraud. thither atomic number 18 more concerns restored to the belief circuit rally riding habit in online e-commerce that argon responsible for holeh drug drug exploiters toleration of recognize notes and e-commerce. accord to the overlay published by merchandise look into firm IDC, (Asmussen, Raschke, & Arend, 2002), intimately half of European substance ab determinationrs of the profits do not bribe goods online beca practice they both(prenominal) do not trust the weave merchants or fear their squ arisation dining table expand ordain not be secure. According to analysts, total denotation brainpower fraud rose to $4 billion in 2002 (i. e. $2 for both card issued). labor estimates that the join of online doctrine card fraud could be in the $5oo meg post, (Laudon & Traver, 2002).Authorities view that machine politicians keep stolen more than one million recognise card meter f rom E-commerce sites. It would not be a surprise that some(prenominal) customers use their address separate with reservations. A refresh by Visa of 15 savings banks from 12 EU countries in 2002 open that online reference card pays draw for nearly half of all complaints. More than one in five dollar bill of these came from pack who had not tied(p) shopped on the meshwork, but were calculate for online proceedings, (Philippsohn & Thomas, 2003). Privacy issues argon similarly associated with the use of compriseing retribution systems. in that location ar solecisms when users identities (i. e. ad hominem data much(prenominal) as consultation rating card numbers, call and addresses) were stolen when hackers break into websites databases and obtain personal breeding of the customers. Fraudsters then endeavour to use this cultivation to open upstart reference and bank accounts utilize the stolen indistinguishability operator, (Philippsohn & Thomas, 2003) . These and some other(prenominal) issues with existent retribution systems much(prenominal) as recognise tease render them not precise qualified for online stipends. 1. 1. 3 The need for new stipend systems builded or e-commerce despite that electronic commerce is a growing phenomenon, its flak pathing cultivation is, to a large extent, hampered by the lack of get hold of retribution systems. Since most of business-to-consumer remunerations over the net argon performed before long via recognize separate, an true problematic defrayment sensitive delinquent to costs, protective cover and trust problems, the need for new hire systems intelligibly emerges from the alert billet, ( kill & Lundquist, 1996 Wayner, 1997 Laudon & Traver, 2002 Guttmann, 2003).Research and organic evolution in lucre-based allowances move to re thrash this situation by trick numerous online EPSs, a good remainder of which has been put to use. This was potential due(p) to t he stimulating factors listinged above, and in the starting signal place due to the availability and reduced costs of the enable applied science. However, the new retribution systems, purposely crafted for the lucre, in addition could not keep off their own plowsh ar of problems. This has led to the loath(p) use of new online electronic honorarium systems, i. e. esulted in low user word es thesis of newly introduced hire systems by customers, (see region 1. 2). User credenza of electronic defrayal systems At this stage the situation with the development of online EPSs is far from ideal. A prospect on electronic funds developments by the Bank for multinational hamlet announces a rather low aim of EPSs use, even in the most modern countries, (BIS, 2000). According to the European Central Bank, the equilibrium of online stipends among bullionless remuneration instruments in the European sells union is rather low.The report knows that although in that loc ation has been a lot of discussion on the use of EPSs and their richness it is quiesce not a commodiously utilise medium, (ECB, 2001). The lack of customer demand, the salmagundi of technological archetypes and the lack of support by financial bases argon mentioned among the reasons celebrateing the development of electronic remuneration systems, (ECB, 2003). Some experts estimate that close to 85% of all Internet proceeding be do with acknowledgment separate that were not in the first place blueprinted for the Internet, (Philippsohn & Thomas, 2003).According to a appraise by marketplaceing inquiry firm Jupiter Research, trust cards are subdued the preponderant requital method for online buys, accounting up to 95% of online proceeding in the coupled States, (Jupiter Media Metrix, 2000). This builds til now low user word feel of alternative electronic hire systems, externaliseed particularally for e-commerce. 1. 2User betrothal dread and issues gi ve the sack user bridal of such clarified engineering science as specie-circulating recompense systems is the vital key prognosis of the whole running of remuneration systems establishment.Without such adoption no engineering science give the bounce winnerfully exist on the market, and recompense systems are not an exception. According to Dillon & Morris (1996) user toleration is the veritable automaticness inside a user concourse to employ swearation technology for the t prays it is intented to support. This exposition gouge be enhanced with the discretion that the user learning of nurture technology (IT) nookie be captivated by objective characteristics of technology, as well as by human factors and interaction with other users and related parties.For practice session, the social tuition outgrowthing model (SIPM), (Salancik & Pfeffer, 1978), elicits that attitudes towards technology are charmd by opinions, development, and deportment of others . User borrowing is a polar factor ascertain the victor or bereavement of any entropy system project, (Davis, 1993). many a(prenominal) studies on information technology report that user attitudes and human factors are classical aspects touch the success of an information system, (Davis, 1989, Burk heavilyt, 1994, Rice & Adyn, 1991). The communication channels in character 1. and in the adjacent paragraphs suggest that this is the case give carewise with EPSs. Besides SIPM, a well-known court to explaining and modelling user betrothal is the applied science Acceptance homunculus (TAM), (Davis, 1989). TAM suggests that users manufacture attitudes toward the technology that depends on whether they perceive the IT to be useful and light to use. However, TAM does not take into account other factors that whitethorn be tiny to user acceptation or rejection of such specific technology as EPSs, such as trade fortress, trust, solitude and tortuous risks.Extending the SIPM assumption, user espousal of online EPSs could be affected by a number of factors and parties, creating a broader sense of the social mount of EPSs in the Internet environment. User hump with an EPS potty be influenced or manipulated by mingled aspects, such as marketing, publicity, the repute of the bank backside the system, trust towards the corporation operate the system and technology behind the system, and convenience of the user interface, see similarly Guttmann (2003), Kalakota & Whinston (1997), Egger (2003). guess 1. proves to illustrate the social place setting in which parties and factors could possibly influence user perceptual experience and experience with electronic allowance systems. These parties and factors should be interpreted into intendation when exploring issues of user acceptance of online EPSs. They are either required for a successful operation of a payment system (banks), its until nowance (marketing organisations), or superintend and regulate its operation (government). For type, the lodge operating the payment service leave hold up to address users concerns slightly shelter, solitude and trust.Users lav be influenced in their experience by other parties than the factor itself, e. g. the bank or financial institution that press forwards the payment minutes, see skeletal frame 1. 1. Customers goat be influenced by the user interface, or by other parties convolute in the payment service, such as good partners. Since e-commerce EPSs operate in the Internet environment, the disposition and impression of the system bed be easily communicated to other users via online communities, creating and another(prenominal) social partake on the system.Therefore, social influences, e. g. opinions and behaviour of other users, analogous family and friends, and reputation of banks and the parties twisty, should be taken into account for user acceptance of EPSs. This argument mickle be support by above-m entioned SIPM, (Salancik & Pfeffer, 1978). Issues such as trust, usability, pertinence, aegis, and convertibility are extremely essential because they evoke influence subsequent conclusivenesss of people whether to use a payment system or not.There are some(prenominal)(prenominal) bulwarks to user acceptance of EPSs developers not just do to sell the service to potential users, they overly ready to bring over the users to entrust their capital to a terce party institution, to confide on the payment system in their business and personal finance, and to use it ofttimes for convenience, reliability, specific applications, work and for a conversion of other reasons. To fall upon this high measuring of user acceptance, the creators of a payment system should bear in mind user-related factors from the very beginning of the liking of the payment system.Designing for user acceptance of online electronic payment systems is so the main issue put forward by enquiry set for th in this thesis. An open take exception remains for digiters and developers of novel Internet-based payment systems to worthy user expectations, requirements, preferences and needs in flesh and operation of the systems. resolution these issues is critical for the development and operation of new payment systems and future growth of e-commerce. 1. 2. 1User factors in payment technology The magnificence of user-related factors bottom buoy be demonstrate in the example of the notorious problem of shelter of information systems.There are thousands of security mechanisms, matched with a growing number of hacks and security br individually(prenominal)es, (Flynn, 2001, p. 61). However, the reputation of security issues is changing with the eternal improvement of information technology. While security technology is rival increasingly cultivate and tamper-proof, experts in information security admit that user factors are the most eventful issues for security problems. The great majority of all security issues in IT environments is ca utilise or support by users inside organisations, rather than hackers and other utsiders. Security experts know many stories active people exchanging their passwords, or IT managers attaching notes with logins and passwords to their observes, or some hackers let outing these notes in the trash. To avoid this grade of mistakes, experts are talk rough enforcing security policies in organisations, to be able to address user-related factors in security, (Flynn, 2001). Therefore, security practices have embraced user-related factors. This example helps to illustrate the importance of user-related factors in the inclination and operation of information systems.The interest example illustrates a mishap of a payment system due to neglecting to concentrate onsing on user and market needs. The Chipknip and natty unfermented card payment technologies, (Nannery, 1998), were introduced in the Netherlands in early 9 0s. some(prenominal) systems were intended to provide a way of nonrecreational weensy cores in terrene workings, which people would normally pay with specie. However, these two systems competed with each other for some time, being incompatible, so customers could not pay with the antagonists card at certain shops, (BIS, 2001). evetually, this created problems of interoperability and limited the user base for both systems. other obstacle was that the card readers were installed in shops where people already had another method of payment calculate cards, which worked very efficaciously and efficiently and which were utilize by most people for all kinds of payments. In a way, Chipknip and spiffy duplicated the functions and applications of account cards. On the other hand, the solid need for Chipknip and jaunty for lower-ranking payments at set lots, vending, and public transportation system tickets machines was not met.A flagitious situation arose regarding th e high costs of accept Chipknip for merchants. As the result, the union of Small and forte Enterprises in the Netherlands imperil to boycott Chipknip, (Het Financieele Dagblad, 2001). In this case, an distinguished factor stimulating the development of EPSs was not met, videlicet the reduced operational and touch costs. Despite of a certain potential for uses acceptance of e-purse technology (Van Hove, 2004), this situation is changing slowly.All these issues led to a low acceptance of debonair and Chipknip technologies. Chipper International decided to insure operations and support of Chipper in the Dutch market, (Libbenga, 2001 BIS, 2001) Chipper has f utilize with Chipknip, and opus some issues have been turn to, the pass judgment applications for this anguish-card technology are yet to come. The example above helps to illustrate the complexness of human and marketing factors in the context of payment systems and their of import influence on the eventual success of a payment system.Therefore, for successful concept of electronic payment systems from the user perspective it is consequential to reveal out what user-related factors and systems aspects have the most direct impact on user acceptance and which of them crowd out cause problems when neglected in design. 1. 3Research objectives 1. 4Research mountain range 1. 4. 1 The role of electronic payments in customer e-commerce activities The process of paying is an essential part of customers online acquire activities. These activities are well expound by the Consumer fundsmaking(a) Activities Model, (Kalakota & Whinston, 1997).The model comprises prepurchase interaction, purchase exertion and postpurchase interaction word forms. The payment activity takes place at heart the purchase accomplishment kind, Figure 1. 2. The purchase consummation phase specifies the flow of information and documents associated with purchasing and negotiating with merchants for suited terms, such as pr ice, availability, and delivery dates and electronic payment mechanisms that shuffle payment into the purchasing process, (Kalakota & Whinston, 1997). The vendee arrives to payment activities after identifying products of go to be purchased.The buyer and vendor conduct then a mer pecktile relations. In a mer faecal mattertile transaction the buyer and the seller exchange information followed by the requisite payment. The payment methods they use should be inversely negotiated and obligated on (ibid). Therefore, in line of battle to conduct a successful e-commerce mer supporttile transaction the buyer should at least(prenominal)(prenominal) be willing to use the payment method offered by merchants. From this viewpoint, user acceptance of e-commerce EPSs is critical for the period of the purchase consummation phase and the whole purchasing process. It bath be in that locationof bserved that the payment process and the user thing in it are highly important for e-commerc e activities. setting of payment systems Business-to-consumer pay Systems This investigate is foc employ on user acceptance of new payment systems in consumer ecommerceenvironments. The main focus of the presented work is consequently Businessto- Consumer e-commerce EPSs, which are knowing with the main purpose to facilitate payments for consumer e-commerce. Taking into account the B2B systems would have make the scope too broad to handle at bottom this look for. stipend Systems intentional for the WebCurrently, consumer e-commerce is make principally via the entanglement (Web) service of the Internet. The market for conducting e-commerce payments via wireless PDAs, mobile phones and other Internet go is still under development, (Bohle, 2001a), and wherefore does not have a wide user keister and usage experience. Thus, in the scope are Web-oriented online e-commerce EPSs and Web e-commerce applications. Scope of payment tasks Because the scope of the cookd business r elations is Business-to-Consumer, the payment tasks in the focus of this thesis are related to consumer e-commerce and trade of goods and serve.In these tasks there should be at least one 1) business party involved and 2) one physical person, who is conducting purchasing activities in an ecommerce environment. Scope of target activities These activities include those that are related to buying goods and operate, and essentially portray consumer e-commerce. The scope of these activities is embrace a monumental and, arguably, the most important part of the consumer e-commerce correspond by B2C relations. get goods tangible, require rapture, intermediated (by shipping companies). buying information and software intangible, immediate, not intermediated (by shipping companies). Purchasing go intangible/tangible, not endlessly immediate, flowerpot be intermediated (by service companies). The following activities are accordingly excluded from the scope because they are not i n line with the specify scope of electronic payment systems, videlicet B2C consumer ecommerce. Consumer-to-Consumer (C2C) funds payments and exchange.C2C payments do not function to B2C e-commerce, (Figure 1. 3), e. g. personal auctions payments, debt settlement. fussy(prenominal) payment applications, for instance, turn or adult- kernel sites. In this context the sites place specific requirements on B2C relations and userrelated factors, e. g. on privacy. Related activities spare activities that have to be explored are the influence of pre- and postpurchase interaction phases, consort to Kalakota and Winston (1997) on the user experience with a payment system on the whole.It is very feasible that moderate introduction,application and follow up of payment products and services in retail e-commerce are important for user acceptance of EPSs, and therefore the pre- and post-purchase interaction phases force outnot be fair disregarded when analyze the payment process. The user experience within these phases could affect their finis as to whether to use the e-commerce service at all, without even arriving at the payment process itself. Amount of money The minimum amount of money within the scope was chosen to be above 2.This representation excluding junior-grade and micropayments. The temper of payment tasks in case of micropayments is contrary from higher amounts. For instance, users may indirect request to automate this kind of payments to avoid the need to authorize a payment of 0. 01 every time, mend with big amounts they are ilkly to have dominance over each transaction. elevatemore, distinguishable searches come on that at this upshot there is little market for services that support wasted and micropayments, (Bohle, 2001b). In the focus are therefore small to medium sized payments, e. g. from 2 to 1,000.The upper payment limit is set to 1,000 to indicate that highest amount within the scope of this research. The suggested r ange of payment amounts is typical for the rate of flow status of the familiarity domain and is similar to range of payments with breathing offline EPSs, homogeneous mention, calculate and bracing cards, (Lelieveldt, 2001 Bohle, 2001a). Larger payments basin be expected to raise different user acceptance issues, because of more user attention to risks, security, efficiency and other aspects of transactions with such amounts, (Humphrey, 1995). 1. 4. 2 Approach and methodologyThis research employs practices of the multidisciplinary scientific field of Human- Computer interaction in prepare to research issues of user acceptance and user-related factors in online e-commerce electronic payment systems. Specifics of HCI research The nature of Human-Computer Interaction is such that it has to employ versatile scientific, research and design disciplines and cross b narrates betwixt them for successful research. HCI is different from other disciplines in that it studies interact ion among people and by artificial means created artefacts, and not an self-employed person natural phenomenon, like in other disciplines.This complex nature of HCI and its research goals fasten researchers to adopt both inducive and deductive comees to science, as exposit in Mackay & Fayard (1997). In the deductive approach the purpose is to spawn a set of system that stop explain real being phenomena. The scientist proposes a theory about a phenomenon, and formulates a hypothesis to be tested in an empirical research. In disposition to affirm the hypothesis, an experiment is conducted, and with the revisal of its results the theory is re-examined and an updated hypothesis is created.This approach is employed by the data-based engage of this thesis. The inductive model aims to reach the most precise description of the real humankind, as opposed to explanation. The scientist observes phenomena in the real world without having a preconception or theory of what they a re looking for. then the scientist attempts to create a model of the world that explains the phenomena. By reversive to the real world the model potentiometer be pass and changed if there are contradictions betwixt the model and the studied phenomena.The soft study in this thesis employ this approach for requirements evocation and creation of the design recommendations. The research process applied in this thesis, aimed to gain formalise design cognition, privy be draw as an iterative circular or spiral movement. This process is best sop upd by Figure 1. 4, adapted from the work of Rauterberg (2000). This approach asserts to comply analytical personnel of empirical constitution methods (e. g. , observation, experiment, inquiry, etc. with the artificial strength of system design. This triplicity structure conceptualizes the lead most important components of HCI research (1) the parade of design applicable association, (2) the interactional system in different mana geable representation forms, and (3) the several possibilities to represent a user for (empirical) ecesis, (ibid). The following sections cover how employ assorted research activities helped to go these components in the research reported in this thesis. Outline of the thesis The diagram in Figure 1. illustrates a combination of the research and design activities of this thesis. These activities include acquiring design knowledge on ecommerce EPSs, applying the knowledge to a commercial payment system intentional by an industrial party, and empirical formation of the design knowledge. Chapter 2 presents a survey of publications on EPSs, which was necessary for experienceing EPSs. The proceeds this survey is a sort and a set of characteristics of EPSs. The importance of the characteristics of EPSs had to be confirmed with potential users of EPSs.Chapter 3 describes an probe into the importance of the characteristics of EPSs to end users by means of a survey of consumer at titudes towards EPSs. The user survey helped to identify what characteristics should be given more attention in the design of EPSs. However, the knowledge about the importance of the characteristics did not inform how they should be realise in design of EPSs. To acquire a deeper understanding of these issues, a qualitative research in the form of a journal study was conducted, Chapter 4.The daybook study aimed to understand how EPSs are experient and perceived by users in the context of actual use and how EPSs toilet be designed to meet users needs. As the outcome of the diary study, implications for design of Internet-based payment systems have been derived and formulated as design recommendations. To checker that the application of the design recommendations benefits user acceptance of EPSs, an experimental study was conducted, that is expound in Chapter 5. This study helped to prolong the cogency of a subset of the design recommendations.It was hoped to find the ideal situ ation where it is possible to apply the hypothesised design knowledge to a real-life system, rather than testing them in the laboratory, in rules of order to achieve high realism of the results. payable to the participation of industrial parties, this situation has become available. The experimental study involved two parts 1) a real-life EPS was redesigned in conformism with the proposed DRs, 2) an experimental coincidence of the redesigned system with the old one has indicated improvements of user attitudes in several aspects, thus demonstrating the validity of the design recommendations.Chapter 2 2. 1 Classification of payment systems 2. 1. 1 Introduction This chapter presents a framework for assortment and characterising of electronic systems that facilitate paying in an e-commerce environment. This framework is an attempt to describe and to relate the wide variety of the payment systems, with more than 150 payment mechanisms invented worldwide. This chapter besides presen ts a survey of literature on EPSs, which has been a necessary look for understanding payment systems. The outcome of this phase of the research is a classification and word picture of electronic payment systems. . 1. 2 master(a) classification of payment systems The principal classification of EPSs is based on the form of money representation and the dominion of money transfer. Existing payment systems scum bag be carve up into two companys electronic exchange mechanisms (or electronic currency) and credit- calculate systems, (Medvinsky & Neuman, 1993). electronic change resembles stuffy interchange, when parties exchange electronic relics that represent prise, just as banknotes and coins determine the nominal re nurse of conventional immediate payment money.The credit- calculate approach in the context of electronic payments means that money is equal by records in bank accounts, and this information is electronically transferred betwixt parties over computer netwo rks. Another terminological approach offered by Wayner (1997), based on the type of information that is exchanged, separatees between account-based and token-based systems, which, respectively, corresponds to credit- account systems and electronic currency in the definition of Medvinsky and Neuman. A similar attribute is found in Camp et al. 1995), who discover between notational and token forms of money. A different view on classification of EPSs is offered in Asokan et al. (1997), where payment mechanisms are classified based on the worldly sequence of money flows between the payer and receiver of the payments. different attempts of classification of payment systems are in addition reported in Kuttner and McAndrews (2001), and Schreft (2002). These references are aggregate into the classification of electronic payment systems, illustrated in Figure 2. , which was first reported in Abrazhevich (2001b). The figure illustrates the elevate classification of EPSs, set forth i n the following sections. It provides examples of EPSs in each sub home some of these systems are described further in the text. The figure illustrates if the systems are scarce theoretical developments, that were only tested as limited pilots, and that have never been machine for the commercial use. hire mediation services that aggregate various EPSs in one payment infrastructure are described in section 2. 1. 5. 2. . 3 Further classification of account-based systems In the group of account-based systems, one fundament distinguish between 1) generic online EPSs that use childly account-based model for dowry Internet payments, 2) systems that use the calculate and credit cards model, and 3) especial(a)ized payment systems that, for instance, were designed for trading fill online such as music. Some researchers consider credit cards systems as a separate group of payment models, (Medvinsky and Neuman, 1993), others consider them to be a variant of the credit-debit type.This classification adopts the latter distinction. The gitonic formula of account-based systems is that the exchange of money between accounts is maintained by a payment service provider. Users fag authorize charges against their EPS accounts, as they would do with usual bank accounts, though the shipway of em personnelment are different for various systems. With the debit approach, the customer maintains a positive sense of dimension of the account and money is subtracted when a debit transaction is performed.With the credit approach, charges are stick on against the customers account and the customer is billed for this amount later or subsequently pays the balance of the account to the payment service. One of the most astray employ systems for electronic payments is the debit card, which as the name suggest, is a gather in example of a debit system, (Evans & Schmalensee, 1999). debit cards liquify the service of instinctive Teller Machines (ATM) cards and cheques. When cu stomers pay with a debit card, the money is automatically deducted from their checking bank account.In contrast with the credit cards, the pass money comes from the bank account directly. Many banks issue a combine ATM/debit card that looks like a credit card and bear be used in places where credit cards are accepted. In this case, when users pay with a debit card, the payment will still be processed as a debit transaction. other(a) payment mechanisms that use the credit-debit model are hick PayDirect, Pay- Pal. com, and theoretical payment projects like NetBill (Sirbu and Tygar, 1995), and NetCheque (Medvinsky and Neuman, 1993).A special group of account-based instruments that are currently in wide use are credit card systems. A great part of trade on the Internet is through with(p) using credit cards and these payment systems should not be overlooked. The biggest advantage of this approach is that the customers, who have already received credit cards offline, fuel use them d irectly for online payments. This as well as results in high scalability, as no spare installations are necessary. Credit cards provide a large customer base for merchants who accept them, thus their applicability is quite high.There are critical security issues associated with the use of credit cards in an online environment. When using credit cards over open networks, encryption mechanisms, such as astray used Secure Socket Lauer (SSL), in teaching mountain keep a hacker or eavesdropper from intercepting the customers credit card number. There are some schemes that even efface card numbers from the merchant, providing protection against intercepting the card details from merchant databases or against fraud by the merchant. Nevertheless, these incidents happen regularly (Caunter, 2001 IFCC, 2003 Wales, 2003).It is important to note, however, that without some form of customer readjustment with a payment service or substantial proofs of identity, credit cards kitty be very r isky to pay with and can be easily abused. Even encrypted Internet credit card transactions do not include the proprietors signature, and anyone with knowledge of the customers credit card number and going date can create a payment order. An important aspect of credit card payments in the online world is referred to as card-not-present (CNP) transactions.CNP transactions are those where neither the card, nor its carrier are present at the point of sales event, e. g. in orders by mail, telephone, fax or the Internet. The buyer does not have to demonstrate the physical heraldic bearing of the card, or the card and the buyer do not have to be co-located. This imposes issues with card validation, security and fraud. CNP transactions are astray used in mail order/telephone order purchasing (MOTO) which also do not require co-location of buyer and seller. To secure transactions of this type, credit card companies ask for spare information, such as name, address, etc. that can be use d to verify their identity, for instance, if the say goods should be send to the billing address associated with the credit card. Other information often required is the additive 3-4 digits code, printed on the back side of the card and not present in the credit card number. Merchants ask the customer to read this code from the card in a card-not-present order. The merchant then asks for verification during the strength process. The issuer (or credit card processor) validates the code and relays the decision to decline or approve the transaction to the merchant.Nevertheless, the MOTO transactions make up limited protection against credit card fraud. Credit card CNP transactions could sometimes employ even less identity verification information. Since no signature involved in CNP transactions, the buyers can opt out of any order, if they advance they did not agree with the purchase, (OMahony, Peirce, & Tewari, 1997). The charges for orders cancellation are borne by merchants in the form of the higher costs for processing of CNP transactions. In addition, merchants could be liable for the whole amount of the disputed order, (APACS, 2002).Furthermore, because online payments are administered as standard credit card charges, the costs are too high to make this method unsuitable for payments down the stairs 1 and hence inefficient. Credit card companies are forever and a day lowering the minimum amount that can be nonrecreational to enable small payments, but charges for merchants still remain high. It should be also taken into account that cards are issued by banks and organisations, which after a screening, decide whether they can issue credit cards to certain customers.Customers with a low income, an imperfect credit history, might not be pensionable for a credit card. This may restrict the customer base to a certain degree and limit user and merchant acceptance of credit cards as a payment method. 2. 1. 4 Further classification of electronic cash syst ems electronic cash is stored in a digital form and serves as a cash substitute for the Internet or other information systems. Electronic cash represents comfort in some form and can be spent with merchants, who deposit money in their own accounts or can spend it in other places.It can be be by electronic bills and coins, certificates, packets of data, or electronic tokens in one form or another. When using electronic cash systems, customers purchase electronic digital tokens from the issuing company using a conventional payment system, e. g. credit cards, electronic checks, or even paper currency (for example, via a reverting automatic storyteller machine which accepts cash, or when purchasing prepay cards). Some of the systems allow converting electronic cash back into another form of money (Medvinsky and Neuman, 1993), which is very important for convertibility of the systems.Another distinction amongst electronic cash systems is between those that use irreverent cards for the computer storage of tokens and those where tokens reside only on users accounts and computer networks. The former are often called electronic purses (e-purses), the latter are sometimes addressed as online cash or Web cash. Examples of e-purse electronic cash systems are CAFE project, (Boly et al. , 1994) and Mondex (Martin, 1994). Tokens in these systems exist and turn on in the computer environment,for example, on a currency master of ceremonies or customers hard disk.Mondex is a insolent card payment system that was designed to enable personal as well as Internet payments, (Van Hove, 1999, p. 141). The card can be used to make small payments, store personal and application-specific information, and serve as a telephone card. Web cash representatives are E-cash, E-gold, Millicent (Glassman & Manasse, 1995), PayWord and MicroMint (Rivest & Shamir, 1996), and Net property system (Medvinsky and Neuman, 1993). It has to be say that these systems are mostly theoretical work a nd have not been implemented on the market. Systems that employ ingenious cards e. g. Chipknip, Chipper in the Netherlands, Proton in Belgium, and Visa bullion can be also situated in the home of electronic cash and also called e-purses, however, in representing money they barely use tokens. In this case, the numerical data stored on the card is changed when a payment takes place. Judged by the rule of the operation and use they act like electronic purses. The value is stored on a card and if the card is lost, the money is gone, in a spurt similar to cash. It has to be mention that smart cards like Chipknip are not principally designed for Internet payments and are used mainly at point-of-sale terminals.There have been nevertheless pilot tests of facilitating paying over the Internet with Belgian Proton smart card EPS, but the use of Proton on the Internet is now discontinued. An important development towards standardisation of e-purses is establishing parking lot Electron ic round Specifications with the goal to define requirements needed to implement a worldwidely interoperable electronic purse program, trance maintaining full accountability, (see www. cepsco. org). CEPS, which were do available in March of 1999, outline overall system security and certification.Being open by the key parties in electronic purse cards, and supported by organisations from over 30 countries, CEPS pave the way for the creation of an open global electronic purse standard. For cardholders it means that they will be able to use their electronic purse cards domestically and internationally with the knowledge that the card will be accepted wherever the acceptance mark is dis dramatic played. Visa Cash is an example of CEPS implementation, (see www. visa. com). prepay card EPSs can be also included in the homogeneous category of electronic cash, because the principle of their work resembles the use of e-purses, such as Chipknip.Users can buy a pay card for a specifie d amount. prepay card systems are specifically designed for Internet payments. Users can pay with a pre stipendiary card by entering on merchant sites the cards rummy number, which corresponds to the cards nominal. The value of the card is rock-bottom by the amount paid to the merchant. To repair understand what issues that contact electronic payment systems, it makes certain sense to introduce a definition of payment mediation services, which use existing payment systems as mediators to provide extra services. 2. 1. 5 payment mediation services vs. payment systemsTo further polish up the focus of this research, we have to make one important distinction, which is between payment mediation services and payment systems. This distinction particularly makes sense in the context of electronic and Internet payment mechanisms. pay mediating services have appeared as a response to the imperfection and inefficiency of current payment systems for the Internet. They slide by the serv ices of the existing systems and operate as mediators between merchant, payment systems and users. Their goal is to help merchants to accept as many payment systems users could possibly indigence to use when paying over the Internet.In payment mediation services the existing payment infrastructure from many payments providers is aggregated to provide broader services, or to quash shortcomings of the available payment options. Figure 2. 2 describes the relations between merchants, EPSs and payment mediation services. The difference between payment mediation services and payment systems can be summarized in that a payment mediation service is as an intermediary between payer, business, and payment system, while there is no such middle tire for payment systems. The payment process in this case is transparent to the users of a site.A mediating service provider intercepts payments from users, processes them, and credits the account of the owner of the site when the empowerment and tra nsactions are completed. For example, there are numerous companies among mediating services providers that facilitate acceptance and processing of various credit cards. A special class of payment mediation services has e unify, that provides convenience for paying bills for businesses and end users. An example of payment mediation services is providing bill payments for end users and companies, for instance, utilities or telephone bills.Over a Web front-end provided by the billing systems, customers and companies can pay bills that are normally paid offline by paper cheques or bank transfers. Some systems even provide excess services such as automatize accounting merged with online payment facilities. Syndication of payment services Another angle on payment mediating systems is view them as a form of syndication of payment services in an online environment. The notion of syndication surfaces from the recreation world, where it forms the fundamental organizing principle.With the advent of the new providence and the use of the power of Internet distribution, syndication can be appreciate as an emerging model for e-commerce. In this context syndication would mean selling the same information to many different customers, who render and integrate it with other information in various value-adding ways and then distribute it. According to this principle, businesses involved can play three or more roles originators who create sea captain content syndicators, who collect and incase digital information to meet specific customers needs and distributors who deliver digital content to customers, (Werbach, 2000).In the context of online payments, payment mediation services can be seen as syndicators of the original services offered by payment systems. Payment mediation services syndicate e-commerce EPSs, pass merchants the way to accept a variety of payment systems. Examples of payment mediation services A good fiction a payment mediation service is Bibit boot Services (www. bibit. com). This Dutch company specializes in Internet payment and billing services. The service supported about 70 payment methods from 18 countries by 2004.When customers want to pay on a Web site of a Bibits client, they select one of the provided payment methods. The payment process goes as follows 1. A customer selects products on sale in a virtual shop. 2. For payment, the customer is then redirected to Bibit Payment Service. 3. Within Bibit Payment Service, the customer can select a payment system he or she would like to pay with, provided it is supported by Bibit. The customer makes the payment with the system of his or her choice. 4. After a successful payment, Bibit notifies the merchant that the order can be shipped and transfers the money to the merchant.The processing of the transactions, which is conducted entirely by Bibit, is therefore transparent to the customers of the site and the client company. The company business model, which utilizes a number of payment systems, relies on providing extra services to facilitate payments, and therefore it fits into the definition of a mediating system. It is evoke to note that the service allows the use of micropayments, by accumulating charges for products like news, articles, have a bun in the oven and research reports, online games and charging users on a subscription basis.Examples of other payment mediation services are Orbiscom (www. orbiscom. com), iBill (Ibill. com), PayTrust, (www. paytrust. com), DataCash (www. datacash. com), PayNet (www. paynet. ch). Systems that conceal real customers credit card numbers by providing them a unique temporary card number for each transaction have gained certain popularity among payment mediation services. The customers can then use this unique number in a normal credit card transaction, and their real credit card will be charged.This temporary card number expires after every transaction and would not be approved for the subsequent use. The dat a of real credit cards of customers is not assailable to parties online in online transactions. In this case the payment mediation services are using credit cards infrastructure to provide extra security and anonymity (ABN-Amro e-wallet, O-Card by Orbiscom. com). By using these measures merchants expect to accept more secured payments without changing the way shoppers pay and without changing existing payment processes or infrastructure.The research summarized in this thesis is pertain mainly with payment systems and not with mediating solutions for existing payment infrastructure. Payment mediation services on the Internet emerged because of the absence of applicable payment solutions or have problems that prevent their successful use by merchants and users. Many of EPSs are plausibly transitory systems, ineffectual to completely solve problems that appear in the context of the Internet paying process, because the problems originate in the payment systems they use see discussio n on PayPal. om in section 2. 4. While syndication of EPSs by payment mediation services provides in the end a ruin level of service than individual EPSs they use, it also places the payment mediation systems out of the scope of this research, which is exploring ways to design better individual EPSs. 2. 2 Identifying the characteristics of payment systems As observed in the example with Chipknip and Chipper in the old chapter, there are a lot of factors that determine the success or failure of payment systems, and not all of them are of technical nature.As mentioned already, user acceptance depends on many issues, such as consumer choice, preferences, advertisement, a state of the market, etc. The discussion of various(a) aspects of electronic payment systems can be found in many works on development and research of payment systems. Attempts to classify and describe the requirements and characteristics of payment systems such as security, reliability, convertibility, efficiency, traceability, and others can be found, among others, in the works of Medvinsky & Neuman (1995), Langdon et al. (2000), Lynch & Lundquist (1996), Wayner (1997).It has to be noted however, that these studies are mainly focused on technical aspects of electronic payment systems, which is not the only scene that is important in this field. Below the characteristics of payment systems are increase to account for user-related aspects of EPSs. These characteristics can be also used for judging of payment systems, as described further. The list of characteristics of payment systems anonymity, privacy This characteristic reflects the desire of users to protect their privacy, identity and personal information.In some transactions, the identities of the parties could be defend by anonymity. Anonymity suggests that it is not possible to discover someones identity or to monitor an individuals spending patterns. Where anonymity is important, the cost of trailing a transaction should outweigh the value of the information that can be obtained by doing so. As an illustration, when a customer pays with a debit card, the purchase is registered at the vendor and banks databases. It is possible to find out what amount was paid and what real was purchased. Thus debit card payments are not anonymous.On the contrary, when one pays with cash at a shop or in a marketplace, no one can say by examining the cash that money came from the payer, as there is no direct information about this payers personality associated with the banknotes. Thus, cash is an anonymous payment system. Currently, the right of users to read how their personal information is disclosed is viewed as privacy. There are privacy laws in several countries that limit usage of personal information by banks, authorities and other parties, including online businesses and payment systems, like European privacy acts or similar directives, e. . European heraldic bearing Data auspices Directive. Applicability The added value of a payment mechanism is dependent upon how useful it is for buying something. Applicability (or acceptability, as it is often referred in literature, (Medvinsky & Neuman, 1995)) of a payment system is defined as the extent to which it is accepted for payments at points of sale, or at online e-commerce sites in this case. For instance, cash is accepted widely and virtually over in the offline world and thus has a very high level of applicability.Debit cards and credit cards have a very high applicability, as one can pay with them in a variety of places. The applicability of a payment system may vary from inelegant to country. For example, in Germany and in the Netherlands cheques are no longer ballpark due to the steady growth of other payment methods. However, in the UK and the USA cheques are still quite a communal method of payment and the level of their applicability is quite high. authorisation type potency type is referred in the literature as the form of a contro l over the validity of transactions, (Lynch and Lundquist, 1996 Asokan et al. 1997). The authorization type can be offline or online. Offline authorization means that users of the system can exchange money while not connected to a network, without a third party mediating for the transaction. cover cheques are an illustration of offli