Online Payments: The Where and How of Cash on the Web
Let’s be frank– we live in a capitalist society, and money makes the world go ‘round. As we transition from a localized system of commerce to a more globalized society, our transactions become less and less limited to the real world, even going so far as to make physical cheques a rarity. This is because of the growing popularity (and necessity) of online sales and purchases; but, due to this, security becomes a huge consideration in everyday purchases.
With normal, face-to-face transactions, we are given a measure of security from the knowledge that we can track exactly where our money has gone, and to whom. Theoretically, if our product is unsatisfactory, or if more money is taken than expected, we can find the offender without too much trouble, with the full force of the law behind us. However, due to the lawless and relatively anonymous nature of the web, there is always a chance that our card or bank information isn’t in good hands when committing to an online purchase outside the known factors like Amazon, Ebay, and other large online stores. In addition to this, without the location and face of the seller or buyer being available, communication can be cut off as soon as the fraud or scam is complete, making it difficult to track and even more difficult to reverse. To top this all off, the security of honorable sites isn’t always perfect, and hackers or spyware can steal the information of hapless customers. So, in the face of all this insecurity, how can we proceed with online payment? Why are we not constantly facing this threat, whenever we’re using the internet?
In short, it’s because of secure third-party services that handle transactions and insure payments that you make. On the buyer’s side, one of the most common third-party online payment service is Square Cash, which acts as a middleman for any of your online purchases that accept the service. Essentially, when you pay through this, you pay Square Cash, which then proceeds to pay the online service. In this way, Square Cash is taking on the risk of purchasing online, and due to their nature as a large company with security and numerous assets, the small risk of your purchase is worth the 2.75% of the transaction that they receive. This is similar to how a credit card company operates, including the insurance on your payments that ensure you will be reimbursed for any fraudulent purchases using your information. This also benefits the seller, as Square Cash’s security in detecting fraudulent payment information is often higher than the most basic strategy of asking for card or bank information and charging that directly. Due to third-party payment services like this, both sides of the transaction gain enhanced security and peace of mind for a fairly low transaction fee. Everyone’s happy.
Before we wrap this up, though, I would be remiss not to mention cryptocurrency in an article about online payment security. This topic is vast, complicated, and constantly changing, so I’ll simplify it down to this: cryptocurrency is decentralized (meaning it isn’t controlled or given value by one source) and highly encrypted, essentially meaning that sending and receiving things like BitCoin, Ethereum, or XRP is unhackable and untrackable. However, due to its decentralized nature, it’s similar to sending and receiving stocks in the coin’s public image, albeit even more unstable. Without a centralized government or agency backing the coin’s set value with a real valued good (such as the gold standard of the United States), the cryptocurrency’s value is completely based on the rate of transactions of the coin, and the public opinion on its value. Until a solution to this is found, cryptocurrency is closer to gambling or playing the stock market than making normal transactions, and it is due to this that many prefer not to accept cryptocurrency as payment. In exchange for the highest security, your money is subject to the opinion of all, and can therefore skyrocket or plummet in value at the slightest change of the cryptocurrency market– something that just doesn’t work for small businesses that depend on stability.