Digital Economy Essay Example | Topics and Well Written Essays - 3250 words

Digital Economy - Essay Example An obvious reflection of the use of EFT is in the world of ecommerce. It has helped the companies outsource employment to other nations and transfer the compensation via wire transfer method and thus EFT has brought about a payment revolution as well. While some insecurity issues have been associated with such transfers, it depends on the individual to use this technology to the optimum advantage. It is important to know whom we are making the payment and why. With fraudulent activities on the rise EFT has given exposure to criminal activities especially when it is carried out through Visa or Master Cards online. Fraudulent agents make fake promises on the internet and hence tempt the users to make payments. Making the equal monthly installment payments for loans and insurance have become easier through electronic clearing system (ECS) and this has induced people to opt for insurance policies and credit. Above all wise decision-making is important to make proper use of EFT and hence optimize the digital economy. Introduction The popularity of Electronic Fund Transfer in the present days has become unimaginable and its importance is clearly undeniable with the fact that the process of fund transfer taking place through online internet media with cheap network and improved cryptography making it faster, quicker and accessible to a large mass thus saving a lot of time and making the process very much transparent. The following literature review will help in identifying the usefulness of this application in the modern context and various aspects associated with this particular component of the digital economy. Person-to- person Electronic Funds transfer According to Oz Shy (2010) there is a clear domination of the person-to-person Electronic Fund transfer system in the European countries in schools and in other service sectors, which has made the system vastly popular and noteworthy. For example in schools the parents transfer the money electronically to the bank a ccount number provided by the teacher adding a note stating the basic information checking the requirement for the fund transfer. Moreover the basic day-to-day household payments are also made electronically in virtual mode thus saving a lot of paper checks and time. Thus this electronic process of fund transfer is considered economically most viable and practical process in Germany although in United States this process of electronic fund transfer is not in much use where traditional methods of cash based transfers take place against writing suitable paper checks drawn in the name of the account holder. As per the research by the author in US the adoption of P2P online system is slow due to the fact that P2P transactions require the personal information of the payer to be revealed to the payee which cause concerns and fear for the US households. Using some theoretical framework and using analysis of costs required in delivering online payments and finally leveraging on the concept of critical mass of users the author finds out that the mass adoption of P2P system in Europe is basically of the natural extension of the earlier used ‘old Giro payment’ networks and due to the huge involvement of banks and financial institutions of Europe whereas as per strong prevalence of the Cheque 21 Act of 2003 the strong involvement of the US Fed has