Electronic payment system need of the Hour

Credit card is the most popular payment method used in Internet shopping. The idea of credit card payment is to buy first and pay later. The cardholder can pay at the end of the statement cycle or they can pay interest on the outstanding balance. Therefore, there are many credit card-based electronic payment systems (EPSs) that have been developed to facilitate the purchase of goods and services over the Internet such as CyberCash (VeriSign), iKP (Bellare, Garary, Hauser, et al, 1995), SET (Visa and MasterCard, 1997), CCT (Li & Zhange, 2004), and so forth. Usually a credit card-based EPS involves five parties: cardholder, merchant, acquirer bank, issuer bank, and financial institution. Internet is an open system and the communication path between each other is insecure. All communications are potentially open for an eavesdropper to read and modify as they pass between the communicating endpoints. Therefore, the payment information transmitted between the cardholder and the merchant through Internet is dangerous without a secure path. SSL (Zeus Technology, 2000) is a good example to secure the communication channel. Besides the issue of insecure communication, there are a number of factors that each participant must consider. For example, merchant concerns about whether the credit card or the cardholder is genuine. There is no way to know the consumer is a genuine cardholder. As a result, the merchant is incurring the increase in losses due to cardholder disputes and frauds. On the other hand, cardholders are worried about the theft of the privacy or sensitive information such as the credit card number. They don’t want any unauthorized usage of their credit cards and any modification to the transaction amount by a third party. These security issues have deterred many potential consumers from purchasing online. Existing credit card-based EPSs solve the problems in many different ways. Some of them use cryptography mechanisms to protect private information. However, they are very complicated, expensive, and tedious (Xianhau, Yuen, Ling, & Lim, 2001). Some EPSs use the Certificate Authority (CA) model to fulfill the authentication, integrity, and nonrepudiation security schemes. However, each participant requires a digital certificate during the payment cycle. These certificates are issued by independent CAs but the implementation and maintenance cost of this model is very high. In addition, the validation steps of Certificate-based systems are very time-consuming processes. It requires access to an online certificate server during the payment process. Moreover, the certificate revocation list is a major disadvantage of the PKI-based certification model (The Internet Engineering Task Force). The cardholder’s certificate also includes some private information such as the cardholder’s name. The requirement of a cardholder’s certificate means software such as e-Wallet is required to be installed on the cardholder’s computer. It is the barrier for the cardholder to use Certificatebased payment systems. To solve this problem, Visa Company has developed a new payment system called Verified by Visa (VbV) (http:www/visa-asia.com/ ap/sea/merchants/productstech/vbv_implementvbv. shtml). However, sensitive information such as credit card number is still passed to the merchant. Therefore, the cardholder is not protected by the system.

Financial industry data indicate that consumers increasingly prefer debit cards over credit cards, especially as a means of enforcing financial self-discipline. Given prior research suggesting that credit cards act as spending facilitating stimuli, this move toward reduced credit card use would appear to be in the right direction. Ironically, however, the same logos that were implicated in facilitating spending with credit cards are the logos that appear on debit cards. In what should serve as an eye-opener to consumers, it is found that exposure to debit card logos does result in an increased willingness to spend, similar to credit cards.

The current research examines influence of materialism and compulsive-buying behavior on Indian consumers’ credit card use. Research in Western countries posits that materialistic values and compulsiveness influence credit card use. However, results of the research differ from earlier researches. It suggests that Indian consumers’ credit card use is influenced by materialism but not by compulsiveness. Credit cards may be acquired to represent a lifestyle and improve individual’s status. The symbolic value associated with credit card is higher than its functional attributes. Consumers associate it with material possessions that bequeath status to them.

The use of debit and credit cards has become indispensable to consumers worldwide. This cashless method of payment offers flexibility and convenience. It eliminates the safety risk of carrying large cash amounts in person and cards can be cancelled as soon as it is lost or stolen. One of the most popular methods of non-cash transactions is through a Point of Sale (POS) terminal. A POS is a quick and convenient method for a customer to pay a business, but may lead to the disclosure of sensitive information without the knowledge of the customer. By investigating the information printed on the customer and merchant transaction receipts at various POS devices in South Africa, it is shown that information provided on the POS transaction receipts can put the consumer at risk as the credit card number, expiry date and name of the card holder may be printed on these transaction receipts. This paper investigates various POS devices used by South African businesses and the relevant information printed on the merchant and customer transaction receipts after a transaction. It is shown that the information contained in the transaction receipts from certain POS terminals is sufficient to perform successful online purchases at multiple online shopping sites. We also show that when the CVV number on the back of the credit card can be obtained while the transaction is in progress, even more online shopping sites can be successfully used without the authorisation or knowledge of the credit card owner.

The literature documents the impact of credit card use on people’s financial well-being, including special interest in women’s credit card behavior. This chapter examines predictors of the financial well-being for female college students living in Sao Paulo City (Brazil) or New York City (United States), focusing upon behaviors regarding credit card use. The results of structural equation models, based on 784 participants, suggest that financial self-confidence and social comparison impact the respondents’ habits surrounding credit card use and, more largely, influence financial well-being. Although social comparison is more strongly predictive of credit card use among Brazilian women, credit card use behavior has a greater impact on the well-being of American women.

We estimate a two-stage Heckman selection model of credit card adoption and use with a unique dataset that combines administrative data from the Equifax credit bureau and self-reported data from a representative survey of consumers. Higher-income consumers carry higher credit card balances, but they tend to repay those balances each month. Credit card revolvers have lower income and are less educated. Revolvers are twice as likely to use debit cards as credit cards for payments, but they carry much higher balances on their credit cards. The high cost of paying off credit card debt likely exacerbates existing inequalities in disposable income. Unlike the mortgage market, we find no evidence for lenders’ cutoff between subprime and prime consumers in the credit card market.

<strong>Abstract</strong> It is important to make payments contactless in order to comply with hygiene rules, especially when shopping under the new normal principles. It is expected that this will increase credit card use. Based on this, the aim of the study is to determine the demographic, economic and environmental factors affecting the use of credit cards. In this study, the data obtained from the Turkish Statistical Institute were used. Binary logistic regression and binary probit regression analyzes were used under discrete choice analysis to identify the factors affecting the household credit card use status. The analysis results showed that the factors such as gender, marital status, educational background, age, household size, employment status, income, expenditure, financial assets, saving, online shopping, and questionnaire year were effective on the credit card use attitudes of households. Determining the effects and effect sizes of these has contributed to explain the attitude of credit card use and has guided decision-makers and policymakers to transform the use of credit cards for contributing to the economy.

PurposeThe purpose of this paper is to understand the moderating influence of Multi‐item List of Value (MILOV) on credit card attributes, age, and gender in credit use among Indian customers. The research examines the impact of “lifestyle” variables (convenience, use patterns, and status) on credit card use.Design/methodology/approachData were collected through mall intercept technique in six metropolitan cities of India. A self‐administered questionnaire was distributed to customers visiting the malls.FindingsUse and convenience emerged as the major determinants of credit card use among Indian customers. Use, convenience, and status attributes were moderated by “sense of belonging” and “sense of fulfilment” dimensions of MILOV. Young customers were likely to use credit cards.Research limitations/implicationsThe study does not examine the influence of customer income, occupation, and education on credit card use, as many customers were not willing to disclose the information. These demographic factors can influence customers' perception towards credit card ownership and use.Practical implicationsThe findings can be of immense use to international and Indian banks in marketing of credit cards. The convenience attribute can be emphasized to instill confidence among consumers and motivate them to use credit cards.Originality/valueThere is no previous research on Indian credit cards which examines the influence of “lifestyle” and values on its use among Indian customers.

CYBERNEWS

PurposeThis exploratory study seeks to explore the link between the choices of payment mode to customer satisfaction. It examines the Austrian market in relation to its choice and usage of debit cards versus credit cards and its impact on customer satisfaction and loyalty. Furthermore, the study aims to identify the key drivers of customer satisfaction for these two modes of electronic payment.Design/methodology/approachA structured questionnaire was administered in person to 360 Austrian bank customers. These customers were selected using quota sampling based on Austrian census data for a particular Austrian province. However, while the quota sampling was used to determine the categories, selection of the actual respondents was done through systematic sampling. This ensured that the sample was representative of the population of that Austrian province who had credit and debit cards. One group, women who were 65 and older, were not considered as there were relatively few women in this age range who had debit and credit cards.FindingsFive hypotheses were proposed. Four of the five hypotheses were supported while one, H4, had partial support. Essentially, the results indicate that a person's preference for a particular payment method is dependent on his/her personal characteristics. Additionally, the payment method's features and characteristics influenced its desirability and acceptance. Furthermore, a person's expectations had an impact on his/her attitude toward the payment method. The study also found that positive expectations, performance, and desires led to customer satisfaction. Customer satisfaction, in turn, leads to a higher degree of intent to use the payment method and higher degree of intent to recommend the payment method. These results are consistent with the literature on customer satisfaction that identifies expectations, performance and desires as the drivers of customer satisfaction.Originality/valueMultiple payment modes have emerged but there has been scant attention paid to the effects of payment modes on customer behavior and by extension, customer satisfaction and loyalty. This paper addresses these issues.

For the purpose of online transactions, the user needs to carry credit or debit card at commercial places. In the existing swipe machine system, to authenticate a user, only personal identification number (PIN) is used. Sometimes the user may forget PIN or attempts wrong passwords consecutively, then the card will be blocked and the user needs to visit the bank frequently. There are chances that the fraudsters as an act of phishing may steal the personal information such as user id, credit or debit card number, CVV number, and card expiry date using skimming devices. To overcome these problems, a system is proposed which uses biometric authorization and personal identification number (PIN) to make a transaction. The user can make a transaction with any one of the user’s bank accounts without using a credit or debit card and also this system does not require a swipe machine. The transaction information is sent to the server over a secure network using the Internet and further processing will be done. The proposed system enhances customers experience and increases security.KeywordsBiometric authorizationPersonal identification number (PIN)Swipe machine

Debit cards are the fastest growing consumer payment method despite being more expensive and less versatile than credit cards. In this paper, we investigate some of the oft cited explanations for debit card use. Checking account data shows that debit card use is correlated with age, pay frequency, overdrafting, and ATM use, but not income, gender, crime, or expenditure. The data contain some signs that debit cards might be used as a method of spending restraint. (JEL D14, G21, L14)

Credit card use is ubiquitous. The credit cardholders’ behaviour of accumulating reward points and its effect is studied. The credit card users are categorised into government employees, private sector employees and the self-employed. The socio-economic factors like age, gender, education, marital status, family size, occupation, monthly income and number of credit cards owned affect the reward point accumulation behaviour of credit card holders. Frequency of credit card use has a positive effect on reward point accumulation but duration of credit card use does not affect reward point accumulation. The card transaction amount is more for the accumulators than the non-accumulators of reward points. Cardholders’ behaviour of accumulating reward points leads to increasing purchases, including conspicuous consumption and possibly leading them into a debt trap, if fail to make full payment of their credit card bill. The issuers of credit cards have a scope to widen their customer base by changing their marketing strategies so as to motivate the cardholders to accumulate reward points.

PurposeThis study aims to utilize the theory of planned behavior, integrating materialism, financial socialization, and perceived financial capability, to explore the psychological determinants influencing credit card repayment behaviors.Design/methodology/approachThe data for this research was sourced from the 2016 National Financial Well-Being Survey. Employing Structural Equation Modeling, this study investigated whether materialism, financial socialization, and perceived financial capability influenced credit card repayment behaviors through their impact on financial intention.FindingsThe analysis suggests significant associations between materialism, financial socialization, and perceived financial capability with credit card repayment behaviors. Furthermore, the results highlight the substantial mediating role of financial intention in shaping the relationship between materialism, financial socialization, perceived financial capability, and credit card repayment behaviors.Research limitations/implicationsEmploying Structural Equation Modeling, the study investigated whether materialism, financial socialization, and perceived financial capability indirectly influenced credit card repayment behaviors through their impact on financial intention.Practical implicationsThe findings of this study underscore the importance of considering credit card utilization and leverage used by average consumers. Supporting community-based financial education programs might be useful for reaching individuals and families at the grassroots level and educating participants about the deleterious effects of maintaining high credit card balances and the perils of pursuing their materialistic desires by leveraging these purchases through the utilization of credit cards. Credit card companies can use these findings to inform their marketing strategies and design credit products that cater to the needs of different segments of customers. From a policy standpoint, it is extremely important to develop programs that protect those individuals who are most vulnerable and need the most help with managing their money.Social implicationsPolicy makers can also use these findings to develop regulations and consumer protection measures to promote responsible credit card use. For instance, they can introduce laws that require credit card companies to disclose the full cost of credit, including interest rates, fees, and charges, in a clear and transparent manner. They can also promote financial education programs to help individuals with high levels of materialism manage their credit card usage and debt.Originality/valueThe paper integrates two well-established theoretical frameworks, the theory of planned behavior and materialism, to provide a comprehensive understanding of consumer credit card usage. This integration allows for a more nuanced analysis of the factors influencing credit card behavior. By utilizing data from the 2016 National Financial Well-Being Survey and employing Structural Equation Modeling (SEM), the paper conducts a robust empirical investigation. This adds credibility to the findings and allows for the testing of hypotheses derived from the theoretical frameworks. The findings of the paper have practical implications for policymakers, financial institutions, and consumer advocates.

This article explores the sociality of digitised money transactions in the use of credit and debit cards in New Delhi. The article draws from insights in Science and Technology Studies (STS) and uses ethnographic practices to capture the complexity of digital money usage. The findings suggest that digital money and its required technological infrastructure do not operate as neutral interventions. Rather, credit cards and consumer behaviour are generated by and implicated in a range of cultural codes and practices, such as contexts for debt vulnerability and fraud. Courts, banks and the government currently appear to be behind the regulatory curve for managing these transactions which clearly seem to outpace the existing legal capacities in India. Significantly, it also emerges that credit card usage, consumer debt and digital frauds need to be grasped as linked phenomena. Money and technology, hence, I argue, operate in sociologically and politically charged contexts.