They are especially true when they are used in a networked environment particularly in the Internet.
Issues, Disadvantages, and Solutions in Legacy Payment Methods in a Networked Environment
One of the most critical issues that exist in the use of legacy payment methods in a networked environment, such as the credit card, is how secured are the financial and personal information of the credit card users. Especially when used online, where information is oftentimes vulnerable to threats and unauthorized access, there is a high possibility that credit card information may not be secured. This thus is causing great concerns for consumers.
One of the processes when using credit cards in an online trading activity is the transmission of credit card numbers. If the server or web site that handles the information exchange between the consumer and the receiver is susceptible to unauthorized access, there is a chance that the credit card information may be stolen and used by another person for his own personal transactions.
In general, because information security in today's technology hasn't been totally provided with solution, wherein there are still a lot of information viruses that travel between networks and where unauthorized access to information is still a big problem, we can conclude that legacy payment methods in a networked environment is similarly not secured. However, despite of this, there are several solutions that have been developed to protect information from payments made in a networked environment.
One of the most common and basic solution that was developed to protect sensitive data is encryption in which information are sent in random forms of code. This was made more secured with SET (Secure Electronic Transaction) technology. In SET, the credit card number is not totally disclosed to the merchant....
Instead, it is sent in encrypted form and can only be decrypted by the user with the use of digital signature that is known only by the user (Claessens, 2002). However, because of the complex process involved in SET, such as the requirement of a software, called "wallet," in the user's machine, this method is not commonly used.
Another recent development in the legacy payment methods in a networked environment is the emergence of software and card readers for the users that allow them to swipe their cards themselves without the need to disclose the credit card number online. Claessens suggests that Real-life electronic payment means, such as electronic purses (e.g., Proton [78]), and debit cards, are also starting to be deployed on the WWW. Software and card readers are now available (e.g., Banxafe [7]) that provide the necessary hooks to browsers and Web servers to connect these real-life electronic payment systems to the WWW.Finally, with the common existence of mobile phones to many individuals, legacy payment methods in a networked environment can be done via mobile phone's SMS capabilities. Authentications are done with the use of random codes that are sent to mobile users that are in turn used to complete a payment transaction.
Bibliography
Orr, Bill. The Great Card Question: Will it be Smart or Debit?
ABA Banking Journal, Vol. 90, Issue 9, pp 54-57.
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2005. The BeeHive Online. 2005. http://www.thebeehive.org/money/credit-cards-benefits.asp
Advantages to Accepting Credit Cards Online.
R&R Web Design Online. 2005. http://r-rwebdesign.com/accepting_credit_cards.html
Claessens, Joris, et. al. A Tangled World Wide Web of Security Issues.
First Monday Online. http://www.firstmonday.org/issues/issue7_3/claessens/#c7
