Risks Associated with Electronic Payment System | Fundamentals of E-Commerce

Download our Android App from Google Play Store and start reading Reference Notes Offline.

risks in e-payment systemRisks Associated with Electronic Payment System,
Fundamentals of E-commerce Notes | Sixth Semester,
BSc.CSIT | Tribhuvan University (TU)

Risks Associated with Electronic Payment System
Electronic payment is a popular method of making payments globally because of their convenience. It involves sending money instantly through internet technology or from bank to bank regardless of the distance. But it still have some risks to consumers and financial institutions, and they are as follows;

  • Tax Evasion
    Businesses are required by law to provide records of their financial transactions to the government so that their tax compliance can be verified. Electronic payment however can frustrate the efforts of tax collection. Unless a business discloses the various electronic payments it has made or received over the tax period, the government may not know the truth, which could cause tax evasion.
  • Fraud
    Electronic payment systems are prone to fraud. The payment is done usually after keying in a password and sometimes answering security questions. There is no way of verifying the true identity of the maker of the transaction. As long as the password and the security questions are correct, the system assumes you are the right person. If This information falls into the possession of fraudsters, then they can defraud you of your money.
  • Impulse Buying
    Electronic payment systems encourage impulse buying, especially online. You are likely to make a decision to purchase an item you find on sale online, even though you had not planned to buy it, just because it will cost you a click to buy it through your credit card. Impulse buying leads to disorganized budgets and is one of the disadvantages of electronic payment systems.
  • Payment Conflict
    Payment conflicts often arise because the payments are not done manually but by an automated system that can cause errors. This is especially common when payment is done on a regular basis to many recipients. If you do not check your pay slip at the end of every pay period, for instance, then you might end up with a conflict due to these technical glitches, or anomalies.
(Visited 89 times, 1 visits today)

Posted By : Digvijay | Comment RSS | Category : Sixth Semester
Tag :

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

Wordpress DMCA
Community | Toolbar | Android App | Founder/Developer : Hari Prasad Chaudhary | CSIT Portal Manager : Digvijay Chaudhary