The process for credit card systems begins when the cardholder (you) swipes their card through the point of sale machine or inputs the credit card information into the fields of the website you are making a transaction through, the information is then sent to the merchants acquiring bank, which then captures and sends the credit card information to the cardholders acquiring or issuing bank. The next steps in the process include the card issuer receives the transaction information, processes it by checking the cardholders balance for sufficient funding, and replies to the transaction request by either accepting or declining the transaction , then the card issuer sends the appropriate code to the acquiring bank and on to the merchant. Credit card payment systems may seem complicated, but in reality, the process is quite simple and is completed in a matter of seconds. Micropayment systems handle small monetary transactions typically between $0.25 and $5.00 that allows content providers to process high volumes of transaction with a cost-effective method, which requires wireless portals and special digital payment systems that can handle micropayments. A digital wallet is a system in which you provide you credit or debit card information to a third party company such as Google who saves your information in a secure server for you to later access and use without the need to re-input your information for every transaction. Personally, I use Google wallet nearly exclusively for my online transactions because it has proven to be secure and I am not typically a person who trusts merchant websites. I have a fear in the back of my mind that their system can and will be hacked and my money will be drained from my accounts. However, if the option for Google digital wallet is not available and I must use PayPal, I feel comfortable using their services as well, because the same basic principle applies to PayPal, as does Google digital wallet.
Laudon, K. C., & Laudon, J. P. (2011). Chapter 9: E-commerce: Digital Markets, Digital Goods. In K. C. Laudon, & J. P. Laudon, Essentials of management information systems (9th ed.) (pp. 302-339). Upper Saddle River, NJ: Prentice Hall.
Emmanuel, I agree that there is some risk of fraud and identity theft in using electronic payment systems. However, there have been improvements by leaps and bounds in the security…