Will Electronic Payment play a
Vitally Important Role in Future?
With the advancement in technology, there is an increase
in activities that could be done through the internet. This
also causes the rising popularity of electronic payment.
Electronic payment refers to the service that involves
monetary payment or transfer. Although it is not until
2016 that the Hong Kong Monetary Authority had finally
issued the first batch of registered Stored Value Facility
(SVF) license, electronic payment involving SVF is not a
new idea. Since the 90s, electronic payment has been
developed in response to the demand of e-commerce in
places such as the United States and Canada. Electronic
payment has gradually evolved into a mature technology
through time.
There are mainly three types of electronic payment:
online payment, phone payment, and mobile payment.
Online payment refers to a payment type that is based on
the Internet. The enterprises and customers utilize the
Internet as a medium to conduct payment service. As for
phone payment, it majorly stresses on the use of phone
and how it integrates with the banking system to conduct
payment. Lastly, for mobile payment, transactions are
made via mobile devices. The customers can use a mobile
device to pay for services and goods without paying
physically with cash, cheque or credit cards. The
prevalence of mobile devices has set grounds for the
development of electronic payment and e-commerce.
Taking Hong Kong as an example, the use of electronic
payment is composed of 60% of the consumer expenses.
Examples of electronic payment options are credit/debit
cards and Octopus card. The way that electronic payment
has redefined the possibility of payment method has also
brought new directions for e-commerce. Electronic
payment has quite a lot of advantages. One of the
prominent ones is that such payment method is very
effective and convenient. It only takes users very little
time to conduct any scale of payment. It also costs less in
terms of operations. On the other hand, since the
payments are now conducted electronically, enterprises
can utilize the data collected from the transaction for
analysis which in turn brings greater benefits to its
business.
There are also a few types of tools to facilitate electronic
payment. They include electronic money, electronic
credit cards, and electronic cheque. One of the most
popular tools is the electronic wallet. It is a device that
allows users to make electronic payment/transaction.
Electronic wallets use the online banking system as a
basis to transmit encrypted data in order to complete a
transaction/payment via online interface or
software/apps. The enterprise usually provides a
free-of-charge online interface or software/apps to allow
users to directly link the payment activities to their own
banking accounts. The software/app includes functions
such as e-certificate, identity authorization and
transaction record saving which all allow electronic
payment to be extremely competitive in comparison with
the traditional payment method.
Despite the merits of electronic payment, it also has its
flaws. First, the fact that electronic payment relies greatly
on the online banking system makes it prone to the risks
of fraud, counterfeit and the identity authentication
issues. When implementing electronic payment, the
enterprise should set up a comprehensive and flexible
plan to monitor, assess and handle any possible
problems. Enterprise should pay close attention to the
data encryption in order to prevent information and data
leakage. Apart from this, electronic payment also bears
the risk of being attacked by hackers and computer virus.
With the prevalence of electronic payment, cyber-theft
has been on the rise and this has posed a huge challenge
to the electronic payment and online banking services.
Cyber-theft can be conducted via some malicious mobile
app which is able to hack into some contactless payment
system such as payWave by stealing the user details of the
cardholder or using the IP address of other people to
perform some illegal transaction. While promoting the
development of the electronic payment, we should also
be aware of the danger.
In short, although the development of electronic payment
opens up new opportunities for enterprise to expand their
business, it comes along with risks as well. Therefore, the
enterprise should keep itself up to date and stay cautious
when examining and developing the possibilities of
electronic payment.
