What are the existing practices in developing countries with respect to buying and paying online? In most developing countries, the payment schemes a

by Zorayda Ruth B. Andam

In most developing countries, the payment schemes available for online transactions are the following:

A. Traditional Payment Methods

• Cash on delivery. Many online transactions only involve submitting purchase orders online. Payment is by cash upon the delivery of the physical goods.

• Bank payments. After ordering goods online, payment is made by depositing cash into the bank account of the company from which the goods were ordered. Delivery is likewise done the conventional way.

B. Electronic Payment Methods

• Innovations affecting consumers, include credit and debit cards, automated teller machines (ATMs), stored value cards, and e-banking.

• Innovations enabling online commerce are e-cash, e-checks, smart cards, and encrypted credit cards. These payment methods are not too popular in developing countries. They are employed by a few large companies in specific secured channels on a transaction basis.

• Innovations affecting companies pertain to payment mechanisms that banks provide their clients, including inter-bank transfers through automated clearing houses allowing payment by direct deposit.