The vast majority of Americans would spend more online if they were offered an easier and more secure way to pay than credit and debit cards, according to a survey from Javelin Strategy & Research.
So what is wrong with PayPal?
If you need to move monies from payers bank account to merchants bank account when merchant wants to be paid prior to shipping purchase you have only a few options:
1. Both parties connected to a proprietary account system like Paypal and transfer funds between accounts online. Risk: security issues on misues of funds in accounts. Pro: Global yet small network, only limited funds in payer accounts to be defrauded
2. Both parties participate in global card systems and card payment can be accepted and merchant guarantee given by a bank. Risk: fraudulent transactions can take place for both patrties. Pro: Global widely spread network.
3. Both parties agree to use online bank account credit transfer. Risk: payer not protected from merchant non delivery, charge back at merchant mercy. Only domestic network today, Pro: Security level mandated by payer bank.
In what sense would it be better if "mobile phones " would be used instead? Either you access a proprietary payment account within or outside telco, card account or online banking account. Risks of fraud, misuse, spam and unwanted marketing are the same
or even bigger compared to using a personal computer to do online shopping.
© Finextra Research 2013