Electronic commerce and the marketing of Internet banking in the UK: THE GOVERNMENTAL POSITION

Electronic commerce and the marketing of Internet banking in the UK: THE GOVERNMENTAL POSITION


The UK Government has been favourably disposed towards the development of electronic commerce. This has been outlined in a White Paper (1998), which as part of the government’s strategy for ‘modernising the economy’, established the principle that economic success would in future be achieved by creating a truly ‘knowledge driven entrepreneurial economy’. In a subsequent paper (1998) it was suggested that the development and use of electronic commerce represented an important ingredient in this strategy and that the government would act as a facilitator by establishing a legal and regulatory framework which would permit electronic commerce to ‘thrive’, by ensuring a ‘strong supply sector providing innovative solutions to customers demands’ and by encouraging demand from what they term knowledgeable users. With respect to the issue of building consumer demand the government has pinpointed the considerable impact that consumer trust will have:

‘Electronic commerce offers considerable benefits for consumers — the convenience of home shopping, a wider range of goods and services and lower prices, as well as improved access for disabled people, the elderly and those living in remote areas. However, consumers will not take advantage of these if they are not assured a proper level of protection. They must be confident that the on-line world is a safe place to shop.

The UK Government has thus drawn attention to a number of factors that it believes will serve either to inhibit or to facilitate the success of electronic delivery channels. These include the need to establish a regulatory framework that offers consumers ‘effective’ protection when participating in the arena of electronic commerce. For example: consumers’ individual privacy must be ensured through the applicability of the 1998 Data Protection Act to the electronic domain; filtering tools must be available which enable consumers to block access to ‘potentially objectionable’ websites; legislation needs to be introduced to license organisations providing cryptography keys (ie electronic signatures); and finally, with reference to encryption (ie the process of scrambling transmitted data to ensure that such information is only read by the intended recipient) the UK Government seeks to safeguard consumer confidentiality by encouraging and establishing Trusted Third Parties (TTPs) for users to deposit their private encryption keys.

Similarly, the US Government (1998) has drawn attention to the advantages that accrue to consumers who use electronic commerce. They suggest these include: ‘access to a truly global marketplace’; ‘access to products, services and information at any time of day or night’; ‘the convenience and speed of shopping without leaving home’; ‘easier price comparisons and often discounted prices for goods’; and ‘an interactive opportunity to learn more about products [and services] and how to use them’ .

The Organisation for Economic Co­operation and Development (OECD) has also been instrumental in promoting the potential of electronic commerce for future business profitability (1998). It has suggested that electronic commerce ‘shrinks the world of business’, and offers the opportunity of bringing economic activity closer to Adam Smith’s ideal of perfect competition, or what Bill Gates of Microsoft terms ‘friction-free capitalism’. This is because it leads to a lowering of transaction costs, a reduction of the barriers to market entry and offers consumers improved access to information. To achieve this aim, however, the OECD believes that a number of barriers must be overcome. For example, access to the information infrastructure must be ensured, regulatory uncertainty minimised, logistical problems with respect to payment and delivery overcome, and consumer trust in such information systems must be strengthened.

With respect to the issue of ‘building user and consumer trust’ in the electronic system, a factor that was also raised by the UK Government, the OECD argues:

‘Trust is central to any commercial transaction . . . Developing new kinds of commercial activities in the electronic environment largely hinges on assuring consumers and businesses that their use of network services is secure and reliable, and that their transactions are safe, and that they will be able to verify important information about transactions and transacting parties, such as origin, receipt and integrity of information; and identification of parties dealt with.’

In terms of promoting and inspiring consumer trust and raising levels of consumer confidence in the new technology, it is suggested that education may help, but that such electronic transactions will inevitably necessitate a ‘calculated risk’ on the part of the consumer. In addition, they suggest that such technology ‘will only be embraced [by consumers] when their value is greater than the perceived risks’ .


Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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