(at very least, in 5 years to come)
E-commerce and Web-tech development is leading us to the expectation of the revolution that would be won by the machines, just like in the Terminator. Being already replaced in such spheres as agriculture and industry, human labour gradually takes a back seat also in spheres of trade and services. Today’s online shopping becomes much more comfortable, cheaper and easier than visiting a next door supermarket. Various web services offer a plenty of options for accepting payments and the card ones are wide from being the best method both for buyer and merchant already. All the market participants exert themselves more while performing a card transaction compared to any other payment method. Online payment systems are fully automated, manual transactions processing is performed only in extreme cases, like for payments that went in the stop list. Blockchain is winning the battle against the red tape of banks and enormous Visa and Mastercard; it is winning – but has not won yet. We will try to analyze what are the reasons of the fact that plastic and virtual cards have no real competitors yet.
Card acquiring process can be exhaustingly complex and slow, include many phases that are being processed manually like refunds and chargebacks, but what you have to hand to cards is the self security and safeness level, unreachable for online payment systems and cryptocurrencies. Bitcoin operations, despite having no regulator and as a result minimizing the human interferation, still have one vulnerability – they are irrevocable. In case you buy a good or a service through BTC, expectation/result ratio fully depends on a seller’s level of trust. Thereafter any objections to quality or refunds fully depend on seller’s honesty. You have no assurance, no deal guarantor.
Internet payment systems have their own anti-fraud systems and AML/KYC specialized sections, but they are nevertheless not so good as their colleagues in banks and card processors. It is not infrequent that “dirty” money are being transferred through several payment systems and getting hold in the account of the final recipient who is just an unwitting seller. Due to the fact that there is no security policy regulator for the whole range of payment systems, investigations of the source in similar chains can’t be performed and a “scapegoat” is appointed through the residual method.
Usually a service chooses the preferable payment system for accepting payments according to the business peculiarity. Great role is played by a territory factor, thus Chinese market is occupied by Alipay and Indonesia prefers FasaPay. Company occupation also values, after all Paypal is the “Gold Standard” for online shops, while Perfect Money is the payment system of “grey” HYI projects. Bitcoin as well as its forks repose on cryptomarket gamblers and enthusiasts, so if you ever see the shield “Bitcoin accepted here” on the website, this means that it’s owner or administrator keeps the BTC rate charts opened 24 hours a day in the background tab. Nowadays there is no alternative payment system able to cover the majority of users.
At the same time, card payments processing allows to embrace 95% of audience in 95% of countries. Most of the potential buyers never mind about what particular card is stored in their wallet – Visa or Mastercard, since the probability when there is only one of these card systems accepted on a website can be closed out. Moreover, we still have AmEx, UnionPay, JCB, etc.
Material form embodiment.
Yes, people are still skeptic about the electronics despite living in the computer era. User still feels more comfortable caring a piece of plastic in his hand rather then recognize money in a string of an online payment system personal account or wallet. The priority of real life communication over a virtual one also plays its major role. One may call to a bank and complain through a phone or even make a visit to a bank’s office. However even the biggest online payment system doesn’t provide any voice or video call support – just chat, tickets and e-mail. In response to cryptos we have the most deplorable fact – their user can ask for help from the people like himself on forums only.
Brand makes a difference.
It sounds corn but it works so for accepting payments on a website. Visa and Mastercard are the global brands, trademarks familiar to anyone on Earth. Until such time when people start recognizing online payment system logos as not just like pretty pictures, card acquiring will remain the basics of any Internet business.
Brand is first of all our mental image. And this image is created not only with a designer’s icing on the cake, but also with the authority and logo credibility. If you picture in your mind the payment methods in human form, than cash is an old-fashioned granny staying in the bakery store queue, online payment system is the huckster selling Chinese Rolexes and cryptocurrency is a teenager wearing VR-glasses on a hoverboard. Plastic (and other) card is the Harvard graduated lawyer – haughty and self-confident, wearing suit – but thereby very strict and insightful. Whom would you trust your money?