Answer to Question #267001 in Management for Wendy

Question

Discuss any four payment systems available for ecommerce businesses. For each payment system, highlight its strengths and weaknesses.

Answer 1

Cash provides immediate gratification; you receive the money and it is yours until they return the item, in which case you can offer store credit instead of cash.

Advantages of cash as a system of payment.

With the exception of taxes, instant cash is available.

When using cash instead of a credit card, there are no transaction fees.

Cash's drawbacks include:

Some employees may be tempted to steal money from the drawer.

A safe must be kept on site, or regular trips to the bank for deposits will be necessary, which will cost time and money.

Credit cards were introduced to the market and have since grown in popularity.

Credit cards have the following benefits:

Accepting credit cards boost revenues. Credit cards are becoming the most frequent means of payment, and your customers demand the flexibility to pay by credit card at any location.

Credit card acceptance improves cash flow. No need to go to the bank because credit card transactions are transferred straight into your account.

Credit card drawbacks include:

Charge backs and fraud are two hazards associated with credit cards.

Credit card refunds take time to process.

The latest craze to hit the market is mobile wallets.

Benefits of Mobile Payments include:

close-range Communication payments are the newest method of collecting credit cards, and you will not want to be left behind if you like to be on the cutting edge of technology.

In 2015, over two-thirds of Americans had a smartphone. If your customer has a smartphone, they almost certainly have a mobile wallet. The more options you can provide, the happier your customers will be.

Mobile Payments Have a Few Drawbacks:

You will need NFC technology. If you don't have NFC hardware, you won't be able to make payments with your mobile wallet.

There are a variety of mobile wallets available, and they do not all work in the same way, so you will have to figure out which one is best for you.