One hurdle for a website that needs online transactions is how to accept payment. The majority of websites (and online buyers) use credit cards to transfer funds from buyer to seller, but there are alternative systems around. An interesting, if unconventional and maybe even a little risky, development is that of e-gold - no currencies required, just swap small quantities of metal.
Websites that perform online transactions have two options when it comes to receiving payment;
Directly request the information. For example, build a web form that asks for the credit card number, name, bank, expiry date, etc. Then process this information manually. This not only delays the order process, but creates significant risks and difficulties in making sure customer information is secure and private, everywhere it is stored and processed.
Outsource payment to a payment processor. For example, integrate with an online payment system so that all the website does is say “I want X amount of money from this customer” - the payment processor deals with the customer directly to get credit card info, and responds to the website to say “Yes, money taken!” or “No, customer failed to pay”. The order can proceed (or be cancelled) immediately and automatically and no sensitive customer data is even seen let alone stored.
However, a popular alternative to credit-card only processing is PayPal. Here, the buyer uses a PayPal account to pay for the order. Again, as far as the selling website is concerned, all it sees is a response to say “Yes, payment made” or not. However, the buyer is transferring online PayPal funds into the seller's PayPal account, not between bank accounts. PayPal is breaking the conventional link between buyer (ie. credit card account) and seller (ie. internet merchant bank account). PayPal offer several ways of adding funds to a PayPal balance including credit-card.
But with all of the above, we are always dealing in currencies. US, Australian, New Zealand dollars, Francs, Sterling, Euro and so on. To convert there are exchange rates to consider, which constantly change. What if there were a “currency-less” currency? What if everyone simply exchanged amounts of gold? Sell something for 1 gram of gold, and the country of buyer & seller is irrelevant. There is no exchange rate. It is an absolute amount. This is what e-gold is all about. You buy a quantity of gold according to your needs, and this weight is allocated to your e-gold account. When you buy something from someone that accepts e-gold, you simply transfer the correct amount to their e-gold account, they are notified of the transfer, and payment is complete. The process is instantaneous, irreversible and cheaper than credit-card or PayPal. And totally anonymous.
Is it all good? Well, e-gold state they are not a bank, and not subject to banking regulations. Although all e-gold account balances are backed 100% by actual gold bullion, it is hard to verify. And if someone gets your e-gold password and transfers all your gold elsewhere, you have absolutely no protection or comeback. But even so, is this the way of the future? Could be something to watch. See e-gold.com for details.
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- Tony Phelps is part of the Merlin Pacific IT team, dedicated to effective & efficient business IT. Discuss this or any other IT topic online with VIGNET (Vanuatu Internet User Group) - register free at http://lists.spc.int/mailman/listinfo/vignet_lists.spc.int All welcome!
