Abstract Effectiveness Criteria for Internet Payme

EffectivenessCriteriaforInternetPaymentSystems1TaeHwan.ShonandPaulaM.C.SwatmanDepartmentofInformationSystemsMonashUniversity,POBox197,CaulfieldEast,Victoria3145,AustraliaTel:[phone]Fax:[phone]E-Mail:[e-mail]-Mail:[e-mail],sinceitscommercialisation,hasexpandedwithtremendousrapidity.ThisdevelopmenthasbeenstillfurtherassistedbythecreationoftheWorldWideWeb,whichhascaughttheimaginationofusersaroundtheworld.AsthemarketingandprovisionofgoodsandservicesovertheWebcontinuestogrow,themissingfactorappearstobeawell-acceptedandwell-trustedmethodofpayingfortheseproductsandservices.ThispaperdiscussestheproblemofInternetPaymentSystems(IPS)andreportstheresultsofaresearchprojectwhichattemptstoidentifyandclasseffectivenessfactorsforIPSs.TheprojectwasundertakenbymeansofaDelphisurveyofexpertsinIPSusageandclassifiedtypesofIPSprovidersaswellasthefactorswhicheachgroupconsidersmostimportant.ThisinformationwasusedinthedevelopmentofoursetofIPSeffectivenesscriteria.IntroductionTheInternetisknowntomostpeopleastheglobal“networkofnetworks”,connectingmorethan140countriesaroundtheworld.AccordingtoNetworkWizards(1996)thenumberofhostcomputersontheInternetincreasedfrom992,000inJuly,1992to12,880,000inJuly,1ThispaperwaspublishedintheproceedingsofPAWEC'97”,the1stPacificAsiaWorkshoponElectronicCommerce,Brisbane,Queensland,April5th.1996─andmorethan488,000domainsand134,365networkswerefoundontheInternetinJuly,1996.Internetfacilitiesallowuserstosendelectronicmail(e-mail)tooneanother,downloadEffectivenessCriteriaforInternetPaymentSystemPAWEC’97Paper7-3usefulfilesandconnectonehostcomputertoanother.Theseabilities,whileimpressive,aremerelyanexampleofwhattheInternetcanoffertoitsusersaroundtheworld.Krol(1994)suggeststhatthemostimportantaspectoftheInternetisitsabilitytoalloweveryonetoaccessthenetwork.TheWorldWideWeb(“theWeb”)wasdevelopedatCERN,theEuropeanLaboratoryforParticlePhysicsintheearly1990s.EagerandPike(1995)describetheWebas:•AnInternetbasednavigationalsystem•Aninformationdistributionandmanagementsystem•Adynamicformatformassandmanagementsystem.TheWeb’sdesignisbasedontheHyperTextTransportProtocol(HTTP),whichallowsuserstocreatehyper-media-baseddocuments2called‘Webpages’byusingHyperTextMarkupLanguage(HTML).AnimportantaspectoftheWebpageisthatitcaneasilybelinkedtomanyotherWebpagesontheInternet.A‘Webbrowser’whichisatermusedonlyontheWeb,isthemostpopularprogramontheInternettoday.Thisisapublic-accessclientprogramwhichenablesuserstonavigateandaccessanyWebpage(Krol,1994).ThemostimportantaspectoftheWebisitsabilitytosupportmultimediaapplicationssuchasgraphics,sound,moviesorinteractionbetweenusers.Cronin(1995)pointsoutthatthedevelopmentofWeb(anditsassociatedapplicationssuchasWebbrowsersand‘Searchengines’)havemadetheInternetmucheasiertouseandnavigateandhasgreatlyincreaseditsattractiontoandusebyindividualsandorganisations.TheInternetwasoriginallyusedbyindividualacademics,universitiesandgovernmentagencies(particularlyinthemilitary)forresearchanddevelopmentpurposes.SincethecommercialisationoftheInternetin1993,thisgrouphasbeenjoinedbycompaniesofallsizes,wishingtoadvertiseandtradegoodsandservicesbothlocallyandglobally(KalakotaandWhinston,1996).AccordingtoYahoo(1996),thereweremorethan23,000companiesontheWebasofOctober,1995.AsurveyconductedbyGray(1996)indicatesthatmorethanonemillionWebsiteswerefoundasatthe1stofJanuary,1996.Commercialactivitiesalreadyabsorbmorethan50%oftheInternet’susageandthisproportionisincreasingeveryday.Yetdespitethisenthusiasmandrapidgrowth,theInternethasbeenrecognisedasadifficultplacetodoseriousbusiness(see,forexample,PoonandSwatman1995;1996;1997).Mostcompanieslimittheirbusinessactivitiestocreatingon-linecatalogues,advertisingproductsandcommunicatingwithcustomersthroughe-mail,althoughitisnotdifficulttoimaginethepotentialoftheInternetasatruemarketmedium.ImpedimentstomaximumuseoftheInternetforcommercialuseincludethelackofastandardinterfaceandfearsconcerningtheprivacyandsecurityofpersonalinformation.Amajorproblem,however,isthelackofanintegratedfinancialtransactionsystemsuitableforanopenelectronicmarketplacesuchastheInternet.HowtheconsumerwillpayforgoodsandservicesandhowtheproviderwillreceivethepaymentsecurelyovertheInternetareissueswhicharebeingseenassomeofthemostimportantsuccessfactorsforInternetcommerce.2Hyper-mediaisaformofmultimedia,inwhichthe“links”takeusersnotonlytootherpartsofthedocumentitself,butalso(potentially)tootherpartsoftheWeb─andthustodocumentscreatedbyotherusersentirely.EffectivenessCriteriaforInternetPaymentSystemPAWEC’97Paper7-4Toovercometheseproblems,manyindividualsandorganisationshavebeendevelopingfinancialtransactionsystemsfortheInternetwhicharecomingtobeknownasInternetPaymentSystems(IPS).AnexactdefinitionforanInternetPaymentSystem(IPS)isdifficulttofind─andcanvaryfromoneorganisationtoanother.ItisnoteasytodefinewhatexactlyInternetPaymentSystemisatthisstagebecausetheconceptisverynewanditsdevelopmentisstillmovingveryfast.Forthepurposesofthispaper,wedefinea