Traditional and alternative internet payment systems: the merchant perspective

With increasingly powerful information and communications technologies, alternatives to traditional payments processes are emerging which promise not only convenience but improved value at lower cost. New payment methods enable merchants and businesses to realise the potential economic gains from shifting to more efficient electronic payments such as improved cash flow efficiencies, reduced costs and protection from fraud. This paper examines the influences and challenges associated with the evaluation and selection of methods for paying for goods and services by online merchants, specifically within the context of traditional and alternative payment methods and the Internet environment. Using a qualitative approach, representatives from five Australian online businesses were interviewed to (1) provide a snapshot of the payments landscape from a merchant perspective and (2) identify competing and conflicting requirements of merchants and their customers with respect to the use of payment methods. In view of the sensitive nature of the subject matter, particularly with regard to the issues of fraud, security, chargebacks and transaction volumes, a case study approach was considered to be more appropriate and effective. The findings suggest that merchants need to keep abreast of and adapt to changes in the payment field while taking cognisance of the changing patterns in consumer payment behaviour and the need to engender trust and confidence in the payment process.