Credit Card Use and Risk in E-marketing Australian Perspective

Question: Define the Credit Card Use and Risk in E-marketing for Australian Perspective. Answer: Introduction E-marketing is a fast growing service. E-marketing involves the activities of banking payment, purchase of goods and payment of bills initiated by marketing organizations. The benefits of e-marketing is that the consumer can carry out the activities from the precincts of his home, office or wherever he wishes. E-marketing has been used by a large population of all ages for the purchase of goods. E-marketing organizations are able to deliver every conceivable goods to the door step just by the click of the mouse. The growth of the e-marketing sector has been possible with the growth in the internet facilities. E-marketing has a negative side to it. The negative side is the security as well as privacy issue of the person using the credit card. In online transactions there is no way to secure that the person using the credit card is the legitimate holder of the credit card. Again even though the person using the credit card may be the legitimate owner of the credit card but when he is using an e-commerce site he enters his credit card information there is an inherent risk of cyber security. There is the risk of a fraud and identity fraud being conducted online. Even though the banking system is taking care to reduce the risks but the consumer should be aware of the risks involved. It is the responsibility of the consumer to take adequate precautions to such risks. The present research would focus on the awareness level of the consumer towards use of e-marketing whilst using the credit card. It would also focus on the defensive measures taken by the consumer to prevent credit card frauds. Literature review E-commerce refers to the use of electronic means for the transfer of funds. The purpose of transfer of funds can be for trading of products and services. The transfer of funds uses the backbone of electronic networks. This started in the 70s with the use of electronic networks for transfer of funds. The first practical use of e-Commerce was the cash less transfer of funds between the banking institutions with the aid of telecommunications network. Presently an advanced use of this is seen in the everyday use of ATMs. This started in 1980s. This use of electronic medium between banks advanced to the use in -standard business documents. All these happened with the growth of the internet. As the internet grew so did the variation in the use of funds for purposes other than banking business. Thus was born e-Marketing, a platform in which trade in products, goods or services to take place (Barnes and Hunt, 2013). The Australian Payment Clearing Association (APCA) is the payment clearings regulatory body of Australia. Since 2006 it regularly publishes data on different frauds conducted when using cheque and cards. The APCA collects the data from different financial associations and publishes them. It is APCAs imitative to inform the consumer of the different process of fraud that are being conducted. Australia had about 15.5 million credit card users in Dec 2013 (APCA 2014) and 16 million in Dec 2014 (APCA 2015). The total fraud conducted via credit card in 2014 was $304 million and in 2015 was $387 million. Different types of frauds that are occur on cards are Counterfeiting, Stolen cards, transactions done with cards that were not received by the actual owner, fraudulent use where data from someother owner was used, use of cards for purchase of online products etc. Gupta (2013) studied the use of mobile technology in the global banking system. According to Gupta the internet technology has greatly influenced how people use information in the purchase of products. Banking institutions are aware of this growth and are investing in the mobile technology sector for development of security features. According to him most banks that the mobile sector will help them reduce the cost of financial transactions. Hay and Webster (2014) studied the extent of crime being, done in Australia. According to them the challenge to prevent credit card is in development of strategies to reduce the risks of such frauds so that the loss to the financial institutions and merchants can be reduced. According to them the level of credit card fraud being undertaken by transnational criminals is growing. Correspondingly there is a widening gap in the perceived widening of the gap to understand how sophisticated credit card crime is taking place. They suggest methods to tighten the access points, limiting the use of cards to the internet, the use of cards having a geographical limitation and to have different PIN for different cards. A study was conducted in Victoria, Australia amongst the consumers, retailers and stakeholders like the government, industry etc. The study found that there is a lack of understanding of the concerns of the three. There was felt the need for proper dissemination of information regarding the ways and means in which fraud is being conducted on credit cards. The government and law enforcement should be more proactive with the information to what they are doing to prevent such crimes. There was felt the need for monitoring of the e-retailers activities. The surveyors felt that consumer associations should provide a platform for grievance redressal, educate and monitor retailers, consumers and stakeholders (Ha and McGregor 2013). A study conducted amongst undergraduate students of Melbourne, Australia in 2007 to access the risk of credit card use and the risks it possess in the E-market. The study wanted to explore the awareness level and thus the experience level of the students towards credit card use and fraud. It also examined as to how the students dealt with such online frauds and thus make policy recommendations based on the survey. The study found that 46% of the students use the internet to purchase goods and about 35% of use credit cards for payment purposes. Most of them had a weekly average purchase of $100. The study also found that a high of 85% of the students were of the risks involved in the use of credit cards. Different types of credit card frauds were surveyed. The highest the student faced was fraud caused due to spam (Barnes and Hunt, 2013). A study found that for the adoption of the e-Commerce business there should be organizational e-Readiness, the strength of the brand of the product, advantage of using the e-Commerce institution, the purchasing power of the consumer. Some of the negative factors of not using e-Commerce if the lack of product trial facilities, reluctance to use credit card, absence of good quality websites and lack of trust due to security and privacy concerns (Alghamdi, Nguyen and Jones 2013). A comparative study between Pakistan and Australia found that to influence consumers the websites should be specific to the demands of the country. The websites should respect the cultural and socio-economic demography of the consumer (Sohaib and Kang 2014). Thus e-Commerce websites should be dynamic with the requirement of the region and the user. A study conducted in 2013 in Australia found that Cash remained one of preferred modes of payment. Though the use of Cash has reduced drastically. Older people generally prefer cash as method of payment. The share value of use of card for purchase in the last three years (including 2013) has increased as compared to that of cash. In fact in 2013 more consumers preferred card (debit and or cash) in relation to cash (Meredith, Kenney and Hatzvi 2014). A study conducted in Australia showed that there is a relationship between credit card frauds and online marketing. The study was able to show that with increase in the level of awareness of the credit card user there is a decrease in the his getting caught in the fraud (Sofo and Sofo 2016). Research aim The aim of the research is to evaluate the risks involved in e-Marketing using Credit Card Research question The research question for this assignment is as follows: How frequently do you use credit card for purchasing of online goods Are you aware of the risks involved in the use of credit cards for e-commerce What precautions do you take for prevention of risks from the use of credit card risks Research objective The objective of the research is as follows: To understand the awareness of the e-commerce consumers towards its potential risks To examine how consumers deal with the e-commerce incidents To gain an insight into how the consumer can be protected from e-commerce fraud through the use of credit card. Research methodology To be able to achieve the primary objective of the research both a qualitative and a quantitative data will be used. The qualitative research is done since the sample size will be small. The basic idea of qualitative research is that it depends on the skills and intelligence of the interviewer. The quantitative research will be used to quantify the variables (Zikmund 2013). Data Collection and Analysis Primary data will be collected in the form of a survey questionnaire (refer Appendix for survey questionnaire). The use of primary data is found suitable since a population can be analyzed through the collection of data. The focus of the survey would be to visualize how frequently consumers use e-Commerce to purchase goods online. The survey would also indicate the type of goods that consumers generally prefer to purchase online. This would help us in gaining an understanding into what are the preferred methods of payments for goods that he purchases online. Thus we will be able to understand whether the consumer / buyer is aware of the risks involved in doing e-commerce specially by the use of credit cards. The above would be used to perceive the different precautions being taken by the consumers to avert such risks. For the analysis, exploratory data analysis tools will be used. This will be used to quantify the data. The data will be analyzed for demographic and socioeconomic differences. Non-parametric and non-parametric studies will be used to ascertain the correlation between the data. Expected research outcome The present study on the use of credit cards by the consumer in e-marketing will demonstrate the awareness of the consumers towards the use of credit card. It will also demonstrate his awareness towards the risks that are involved in the use of credit cards. Thus it will give and insight into the safeguards taken by the consumer towards the perceived risks. Conclusion The benefits of e-marketing is that the consumer can order any goods from the precincts of his home, office or wherever and whenever he gets the urge to purchase goods. E-marketing organizations are able to deliver every conceivable goods to the door step just by the click of the mouse. The growth of the e-marketing sector has been possible with the growth in the internet facilities. But this growth in the e-marketing / e-commerce is not without its drawbacks. With the increase in e-commerce trade unscrupulous elements have devised methods to hack into the information of the consumers credit cards. Once they get hold of the information they use this information for their benefits thus depriving the legitimate owner of the credit cards of its benefits. The stakeholders in the e-commerce industry are aware of such frauds and are doing their best to protect the interest of the consumer. But the consumer also needs to be aware of the risks and thus should take precautionary measures. It is only when the consumer becomes aware of the risks of e-marketing with credit cards that he will be able to secure himself and hence prevent frauds. References Barnes, S., Hunt, B., 2013. E-Commerce and V-Business. Taylor Francis.pp.214-232 Ha, H. and McGregor, S.L., 2013. Role of Consumer Associations in the Governance of E-commerce Consumer Protection. Journal of Internet Commerce, 12(1), pp.1-25. Australian Payments Fraud Details and Data - Australian Payments Clearing Association 2014 Australian Payments Fraud Details and Data - Australian Payments Clearing Association 2015 Barnes, S., Hunt, B., 2013. E-Commerce and V-Business. Taylor Francis. Hay, B. and Webster, J., 2014. Responding to organised payment card compromise and subsequent fraud. Journal of Payments Strategy Systems, 8(1), pp.30-42. Gupta, S., 2013. The mobile banking and payment revolution. European Financial Review, 2, pp.3-6. Zikmund, W.G., Babin, B.J., Carr, J.C., Griffin, M., 2013. Business Research Methods. Cengage Learning. Alghamdi R., Nguyen A., and Jones V., 2013. A Study of Influential Factors in the Adoption and Diffusion of B2C E-Commerce, Int. J. 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