Understanding Money and E-Commerce
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Questions and Answers

Money serves as a means to buffer the value of achievements over time.

True (A)

Business transactions with notes and coins do not allow for any anonymity of the participants.

False (B)

The physical value of notes and coins is higher than their business value today.

False (B)

Customer and supplier need to be in the same location for cash transactions to occur.

<p>True (A)</p> Signup and view all the answers

Transaction costs on a farmer's market are generally very high.

<p>False (B)</p> Signup and view all the answers

The role of banks and payment service providers is unimportant in E-Commerce.

<p>False (B)</p> Signup and view all the answers

Cash and book money are the two main types of money used in real economic areas.

<p>True (A)</p> Signup and view all the answers

Cyber money is an appropriate means for running an E-Commerce business.

<p>True (A)</p> Signup and view all the answers

Customers and suppliers must know each other for transactions to occur.

<p>False (B)</p> Signup and view all the answers

Notes and coins must be authentic for both partners in a transaction.

<p>True (A)</p> Signup and view all the answers

Book money is linked to the banking account and the account owner.

<p>True (A)</p> Signup and view all the answers

Transactions can be conducted completely anonymously with book money.

<p>False (B)</p> Signup and view all the answers

E-money is categorized as one of the primary payment methods.

<p>False (B)</p> Signup and view all the answers

The level of payment guarantee is one of the technical parameters for selecting payment methods.

<p>True (A)</p> Signup and view all the answers

Transaction costs are invariant and do not depend on the payment methods used.

<p>False (B)</p> Signup and view all the answers

The magic triangle for assessing payment methods involves customer acceptance, supplier protection, and transaction costs.

<p>True (A)</p> Signup and view all the answers

Payment per cash in advance involves delivery before receipt of payment.

<p>False (B)</p> Signup and view all the answers

GiroPay was founded by a collaboration of several German banks.

<p>True (A)</p> Signup and view all the answers

The course of action for payment per invoice includes sending an invoice before delivery.

<p>True (A)</p> Signup and view all the answers

Secure authentication is not a security requirement when selecting a payment method.

<p>False (B)</p> Signup and view all the answers

One potential problem with payment per invoice is delivery without a corresponding invoice.

<p>True (A)</p> Signup and view all the answers

The risk associated with payment per invoice is primarily borne by the customer.

<p>False (B)</p> Signup and view all the answers

For GiroPay, the customer must log in with their account number and password at their bank's web banking portal.

<p>True (A)</p> Signup and view all the answers

Periodic costs in payment procedures include one-time costs such as procurement costs.

<p>False (B)</p> Signup and view all the answers

A supplier does not need to have a bank account to operate with GiroPay.

<p>False (B)</p> Signup and view all the answers

The risk in the GiroPay payment method is solely assigned to the customer.

<p>True (A)</p> Signup and view all the answers

Cash on delivery is considered an integral part of E-Commerce.

<p>False (B)</p> Signup and view all the answers

One potential problem with cash on delivery is the customer's absence at the delivery address.

<p>True (A)</p> Signup and view all the answers

For a debit note payment method, a customer must have a giro contract with their bank.

<p>True (A)</p> Signup and view all the answers

In the payment per debit note method, the supplier does not need a cashing contract with their bank.

<p>False (B)</p> Signup and view all the answers

A deviation between payment amount and delivery volume is not a potential problem in the systems mentioned.

<p>False (B)</p> Signup and view all the answers

The cashing function in cash on delivery is taken over by the delivery service provider.

<p>True (A)</p> Signup and view all the answers

The customer must have a credit card to utilize this payment method.

<p>True (A)</p> Signup and view all the answers

A delay in payment can occur due to a chargeback of credit card payment.

<p>True (A)</p> Signup and view all the answers

E-Payment methods do not combine traditional payment methods.

<p>False (B)</p> Signup and view all the answers

Dunning letters are a method of collecting debts.

<p>True (A)</p> Signup and view all the answers

Payment dysfunctions can occur as a potential problem in this payment method.

<p>True (A)</p> Signup and view all the answers

SSL encryption is used to protect transferred data in E-Payment methods.

<p>True (A)</p> Signup and view all the answers

Cyber money is a form of physical currency represented in electronic form.

<p>False (B)</p> Signup and view all the answers

PayPal members can send money without any restrictions on the receiver's location.

<p>False (B)</p> Signup and view all the answers

Virtual currency is recognized as legal tender according to the definitions provided.

<p>False (B)</p> Signup and view all the answers

The E-Payment provider does not inform the supplier when the payment is confirmed.

<p>False (B)</p> Signup and view all the answers

If cashing activities are unsuccessful, the case can be referred to a lawyer.

<p>True (A)</p> Signup and view all the answers

The receiver of the money is informed via E-Mail if they do not have a PayPal account.

<p>True (A)</p> Signup and view all the answers

Virtual money can only be issued by banks.

<p>False (B)</p> Signup and view all the answers

Risk is predominantly on the bank's side in this payment method.

<p>False (B)</p> Signup and view all the answers

The US Department of Treasury defined virtual currency in 2013.

<p>True (A)</p> Signup and view all the answers

The requirements for money documents include authenticity verification.

<p>True (A)</p> Signup and view all the answers

Flashcards

What is money?

The medium by which value is exchanged in a transaction.

What is an economic area?

The economic system used to manage the value of products and services through transactions.

What is a business transaction?

The exchange of goods or services for a specific value in a transaction.

What is cash?

The physical form of money, consisting of notes and coins.

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What is book money?

Money recorded in financial accounts, used for transactions without physically exchanging cash.

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How does business with cash work?

The physical exchange of cash and goods/services between a customer and supplier at the same time and location.

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What are the pros and cons of using cash?

Physical money is independent from the owner, durable, divisible into small units, but vulnerable to fraud and loss.

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What are the privacy and legal aspects of cash transactions?

Cash transactions allow complete anonymity, but are subject to legal restrictions.

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Book Money

A type of money that is only recorded in a bank account, not physically held.

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E-money

Money that exists electronically, often linked to a specific device or account.

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Payment Method Assessment Triangle

Provides a framework for analyzing payment methods by considering their balance between customer acceptance, supplier protection, and costs.

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Acceptance by Customer

The likelihood that a customer will use a given payment method.

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Protection of Supplier

The level of protection a supplier has against a customer not paying or delaying payment.

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Costs

The costs associated with using a specific payment method, including transaction fees, processing charges, and other expenses.

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Periodicity of Payment

The frequency of payment for a product or service, such as a single purchase or recurring subscriptions.

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Internationality of Business

The extent to which a payment method is used for international transactions, considering factors like currency exchange rates and cross-border regulations.

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Cash On Delivery (COD)

A payment method where the customer pays for goods at the time of delivery. This involves a delivery service picking up the goods, delivering them to the customer, and collecting payment.

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Payment by Debit Note

A type of payment where the customer's bank account is debited automatically to pay for purchased goods. It involves a supplier submitting a debit note to their bank, which then collects the payment from the customer's bank account.

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Money Collection Bursts

A situation where a customer's bank account has insufficient funds to cover the debit note payment.

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Payment by Online Bank Transfer (GiroPay)

A payment method where the customer pays for goods online through their bank account using a third-party service like GiroPay.

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Deviation between delivery and invoice

A situation where the delivered goods don't match what was ordered.

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Confirmation of Payment Receipt

A payment method where the customer has to confirm receipt of the delivery and the delivery provider has to confirm receipt of cash from the customer.

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Duration from payment to delivery

The time it takes for a customer to receive goods after payment.

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Deviations between Payment Amount and Delivery Volume

A situation where the amount paid by the customer doesn't match the quantity of goods delivered.

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Payment Independent Costs (Customer)

Costs incurred by a customer for purchasing a product or service, including one-time costs like procurement and setup, and periodic costs like basic service charges and hardware rentals.

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Payment Independent Costs (Supplier)

Costs incurred by a supplier for providing a product or service, including one-time setup and adjustment costs, and periodic costs like basic service and software charges.

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Payment Per Invoice

A payment method where the customer pays after receiving the goods or services. The invoice might be included in the delivery or sent separately.

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Payment Per Cash in Advance

A payment method where the customer pays upfront before receiving the goods or services.

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GiroPay

A payment method that allows customers to transfer funds directly from their bank account to a merchant's account via an online banking platform.

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Secure Authentication (Payment)

The process of securely authenticating a customer before authorizing a payment. This includes methods like secure logins, password verification, and other security measures.

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Liability Scope (Payment)

The scope of responsibility for losses or damages resulting from fraudulent transactions. It defines who is liable for the payment in case of a dispute.

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Payment Integration into Sales Process

The integration of the payment process into the overall sales workflow, ensuring seamless transition from order placement to payment confirmation.

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Credit Card Payment

A payment method where a customer pays directly using a credit card, with risk primarily on the customer's side.

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E-Payment

A payment method where an E-Payment provider acts as a mediator between the buyer and seller, handling the transfer of funds and transactions.

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PayPal

A popular E-Payment platform that allows users to send and receive money via e-mail, using their registered accounts.

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Credit Card Based E-Payment

A method where customers pay using their credit cards, but the transaction is guaranteed by the credit card company.

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E-Payment Provider Functions

E-Payment providers handle a variety of payment functions, simplifying the process for suppliers.

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E-Payment combination

E-Payments often combine traditional payment methods, like bank transfers or credit cards, with the added convenience of digital transactions.

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PayPal Data Protection

Data transfer in PayPal is secure, with SSL encryption, meaning the sender's financial data is not shared with the receiver.

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Smart Card Payment

A payment method that uses contactless smart cards, offering a streamlined and secure way to make payments.

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Cyber Money

A digital currency used for online transactions, typically not backed by a government or central bank, and not recognized as legal tender.

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Chargeback Delay

Delays in payment caused by a customer refusing a payment due to issues with the original transaction or invoice. Examples include disputing a credit card charge or disagreeing with the amount on an invoice.

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Cashing Methods

Methods used to recover overdue payments from debtors, such as sending letters demanding payment, calling the debtor, visiting them in person, or identifying and contacting debtors.

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Virtual Money

A digital representation of value stored on a electronic device that can be used for payments but is not backed by physical currency like banknotes or coins.

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Announcing Legal Activities

A legal process where a debtor is notified of an impending lawsuit for non-payment and provided details of the claim against them.

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Statement of Case

A legal document outlining the reasons for a lawsuit against a debtor, including the amount owed and the basis of the claim.

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Reference to Judgments

A situation where a debtor is provided with a legal judgment ordering them to pay a debt.

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Court Procedure

A final step in debt collection where a legal claim is taken to court for resolution.

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Study Notes

Electronic Payment Overview

  • Electronic payments facilitate e-commerce transactions.
  • Methods for making payments in e-commerce include cash, book money, and e-money.
  • Different payment methods have various pros and cons, and choosing the right one depends on factors like transaction costs, security, and payment guarantee.

Business and Money

  • Money acts as a lubricant for economic activities, enabling business transactions in various sectors, including the web.
  • Money provides a buffer for maintaining the value of achievements over time.
  • The economic cycle typically involves delivering a product or service, receiving payment, offering money to purchase a product or service, acquiring the product or service, and using the product or service.

Physical Money

  • Physical money (notes and coins) are a universal medium of exchange.
  • Physical money is independent from the owner.
  • It is easily divisible and has a long life.
  • Physical money has drawbacks, including the risk of fraud and loss, and its low value compared to its business value.
  • Transaction costs are low for businesses using physical currency.
  • Physical transactions with notes and coins permit anonymity.

Book Money (Banking System)

  • Most business transactions use book money.
  • A banking system (bookkeeper) facilitates book money transactions.
  • Customers and suppliers both have bank accounts.
  • An intermediary (bookkeeper) ensures that the account balance is accurately maintained.
  • The process guarantees safe and traceable accounting.
  • Customers and suppliers are not immediately connected.

E-Money (Electronic Payment Instruments)

  • E-money involves electronic transfer of funds.
  • E-money enables anonymous transactions.
  • Electronic payments can be made by using various methods.

Important E-Payment Methods:

  • PayPal: E-mail-based service for sending and receiving money.
  • GiroPay: German banks provide this service for online transfers via web-based banking portals. The customer and supplier both have accounts at the bank. This is not a completely anonymous transaction.
  • Smart Cards: Allows customers to make payments at retail points of sale, like for tickets, parking garages etc.
  • M-Pay: Mobile payment method, integrated with web-based shopping. Users use SMS or PIN numbers for authorizing purchases.
  • ClickandBuy: A service to ensure the secure online transfer of data between customers and retailers, by using an account on the online shop server.

Problems with Transactions:

  • Invoice discrepancies.
  • Delivery failures.
  • Payment failures from customers.
  • Theft and loss of physical money.
  • Insufficient funds for payment.

Payment Procedures:

  • Payment per Invoice: Delivery followed by invoice and payment. This method involves a higher amount of risk for the supplier.
  • Payment per Cash in Advance: Invoicing and payment before delivery. This method minimizes the risk for the supplier.
  • Cash on Delivery (COD): Payment upon delivery. Risk is minimized by handling the payment of the transaction between the customer and supplier's courier.

Receivables Management

  • Delayed payments: Addressing delays in payment through dunning letters, phone calls, and visits.
  • Legal action: Forwarding unpaid cases to a lawyer or the court system.
  • Debtor identification: Identifying and assessing the financial status of overdue debtors.

Virtual Money

  • Virtual currency defined by the European Central Bank and the US Department of Treasury.
  • Virtual currency operations use electronic mediums.
  • Virtual currency does not have the status of legal tender.

E-payment integration

  • The system is complex and uses several different payment methods that are combined to create different processes.
  • E-payment typically unburdens the supplier by performing the payment function, which can improve the transaction efficiency.

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Electronic Payment PDF

Description

This quiz explores the role of money in business transactions, particularly focusing on cash, book money, and electronic money. It highlights key concepts related to anonymity, transaction costs, and the importance of banks in E-Commerce. Test your knowledge on how different types of money function in the economy and their implications for both buyers and sellers.

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