Internet Payment Services
EN: The author writes, "we are beginning to see some commercial transactions on the internet" .... so it's pretty clear that the article is laughably outdated. While it's probably impracticable, some of the theoretical material may be of interest.
Requirements
Some of the characteristics necessary for a payment service to be successful:
- Security - First and foremost, is the need for such a system to be secure against fraud and theft
- Reliability - It must keep an accurate accounting, and it must be accessible when needed
- Scalability - As the use of the system increases, it must scale up to be able to accommodate demand
- Anonymity - The author says that "it is important" for the payer and payee to be anonymous for some transactions, but doesn't provide any support for such a statement
- Acceptability - A payment system must be widely accepted, both among merchants who will accept payment via the system and by customers who will utilize it
- Flexibility - It must handle an array of different payment types to suit various needs
- Convertibility - Users must be able to exchange monies in a digital system for real-world currencies quickly and conveniently
- Efficiency - The cost-per-transaction must be low enough to make the payment mode acceptable, even for micro transactions
- Easily Integrated - Must plug into existing commerce systems easily
- Ease of use - Must not be overly complex for the individual accountholder to use
Payment Models
Some of the payment models considered:
- Digital Currency - A "currency server" is used, enabling a person to exchange real currency for digital currency, and the account information is not linked to their real-world identity
- Credit/Debit Instruments - Similar to physical credit/debit cards, these represent charge accounts that enable the user to "charge" purchases to an account and pay a bill later (or fund the account in advance)
- Secure Card Transactions - Charges are made to an existing credit card account, but the data provided to the server is not the actual card number, but an encrypted string that can be decrypted by the card provider.
- Direct Transfer - This uses the automated clearinghouse (ACH) system to effect a wire transfer from a deposit account funded by the payer to one of the payee.
EN: None of these models has had much success. There are still a few merchants who accept them, and still a few shoppers who have them. If it weren't for gambling, pornography, and other gray-market transactions where buyers wish to be anonymous or provide a layer of safety between a vendor and their money, they'd probably be completely obsolete.
Summary and Discussion
After some evaluation of several vendors attempts at accommodating digital payment systems, the author identifies a couple that meet the criteria for success. The two are NetCash and NetCheque. Neither has succeeded.