Increased Consumption, Employment and Income
E-commerce payment systems has allowed for instantaneous, easy transfer of funds. Consumers will thus be more willing to make purchases, benefitting businesses.
It is even more convenient than hard cash as no change or exact amount of cash is required. This leads to an increase in transactional efficiency as it saves time and brings convenience for both the merchants and customers.
As seen in the diagram below, what results is a virtuous economic cycle, where increased consumption leads to increased production, employment and income.
It is even more convenient than hard cash as no change or exact amount of cash is required. This leads to an increase in transactional efficiency as it saves time and brings convenience for both the merchants and customers.
As seen in the diagram below, what results is a virtuous economic cycle, where increased consumption leads to increased production, employment and income.
Lowered Average Transaction Costs
Cash-based system is a physical system driven by variable costs, so that average transaction costs decline only slightly as volume increases.
The payment card system, however, is more of an information system, whose cost structure is driven primarily by the fixed costs of setting up its interconnected components. The greater the volume of transactions carried over an electronic network, the lower the average cost per transaction.
The payment card system, however, is more of an information system, whose cost structure is driven primarily by the fixed costs of setting up its interconnected components. The greater the volume of transactions carried over an electronic network, the lower the average cost per transaction.
Flexible Payment Options
Through the advancement of the e-payment systems, numerous flexible payment arrangements have been made possible and offered by online merchants. For example, credit cards, debit cards, or even a direct transfer from a bank account.
It also allows buyers to pay now, pay later or prepay; affording consumers greater flexibility in their shopping experience.
In general, they provide consumers with access to all available funds or lines of credit for a given transaction, and they give merchants peace of mind about payment guarantees, provided they follow appropriate payment procedures.
It also allows buyers to pay now, pay later or prepay; affording consumers greater flexibility in their shopping experience.
In general, they provide consumers with access to all available funds or lines of credit for a given transaction, and they give merchants peace of mind about payment guarantees, provided they follow appropriate payment procedures.
Globalised EconomyE-payment system facilitates the globalised economy in travel and tourism, as consumers are able to access payment forms outside of their home country.
This reducing concerns about exchanging and carrying foreign currency while providing security against loss or theft. Improve Economic Efficiency |
E-payment systems also reduce central bank costs in providing currency. With the advent of card usage, paper transactions are reduced as bills can be viewed online.
As such, this reduces the cost of printing notes and coins by central banks, and reduces the labor put into the processing of physical cash by treasury or finance departments. This improves the overall efficiency in commerce and the economy.
As such, this reduces the cost of printing notes and coins by central banks, and reduces the labor put into the processing of physical cash by treasury or finance departments. This improves the overall efficiency in commerce and the economy.
Eliminate Grey Economy
Credit cards aid in eliminating a substantial portion of the gray economy. Retailers who want to avoid paying sales tax prefer cash transactions as it makes it easier for them to not report some or all of their transactions.
Card transactions, on the other hand, are “above board” and create an audit trail that greatly reduces the non-reporting of transactions. This allows for the government to obtain the tax revenues that may have gone undiscovered.
Card transactions, on the other hand, are “above board” and create an audit trail that greatly reduces the non-reporting of transactions. This allows for the government to obtain the tax revenues that may have gone undiscovered.
Fun Facts#11 eBay has over 100 million unique audiences a year
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[email protected] Done By: Gobardja Ian U098473L Kua Li En A0070291M Nicholas Chen A0072340U Justin Tan A0072547B |