The Internet has recently become the most vital segment of this national information infrastructure, better known as the information superhighway. With the backing of Federal government and big business, the Internet is now an essential marketing and sales channel. Today, even small companies often find it necessary to establish an online presence.
Though delivering electronic customer information is relatively simple, exchanging electronic funds is not. New technology must be widely adopted which provides rapid and secure sales transactions. The future of Internet electronic commerce hinges on the issue of handling digital cash.
There are many advantages to conducting electronic commerce on the Net. The following are the more significant areas to consider.
Marketing. Fast and inexpensive way to attract new customers, especially in geographically remote areas. Speed of transactions. Typical direct sales and mail-orders are slow methods by comparison.
Accuracy of transactions. No reentry necessary for customer or sales information.
Convenience. Storefront is open 24 hours a day, 7 days a week.
Competitive research. Easy searching for similar products or services.
Reduced overhead Facilities, inventories, and personnel can be centralized.
Up-to-date information. Sales and product information is continually revised.
But the Internet, with all its functionality and coverage, attempts to hide a serious deficiency. By design, it is an open public communication forum. Thus, its strength actually creates its most severe weakness-security. Hackers, corporate spies, and white-collar criminals all see an unparalleled opportunity for entry into this worldwide virtual cash register. Private commercial online services, such as CompuServe and Prodigy, currently provide a more secure environment for electronic commerce.
Forms of electronic cash have been warmly embraced by businesses and consumers for years. ATMs (automated teller machines) provide a fast and convenient way to withdraw, deposit, and transfer funds without banks or personnel. Direct deposit of payroll checks and direct payment of certain regular expenses are now common bank services. Debit cards give habitual consumers with poor credit an alternative to their addictive credit cards. Even electronic cash cards (electronic purses) with imbedded memory chips are entering the marketplace from companies such as Mondex and Bourse.
Electronic funds transfer (EFI) is one of the keys to effective Internet commerce. If properly implemented, buyers and sellers are able to quickly and safely exchange digital money. Banks handle the actual transactions, but the authorizations are made over the Internet. …