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14188-37032_Ch11_Solutions

14188-37032_Ch11_Solutions - Electronic Commerce 7th...

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Electronic Commerce, 7th Edition Solutions 11-1 Electronic Commerce, 7th Edition 14188-37032 Chapter 11 Solutions Review Questions 1. Write two paragraphs in which you define “scrip” and outline the advantages and disadvantages of scrip for consumers. Answer: Scrip is digital cash minted by a company instead of by a government. One problem that comes to mind in considering this use of digital cash is counterfeiting as it seems to be much easier with such electronic bank notes than with paper money since they are merely electronic signals. Advantages include: Payment cards provide fraud protection. They have worldwide acceptance. They are good for online transactions 2. In about 100 words, describe the difficulties that can arise for merchants that want to process “card not present” credit card transactions. Answer: One problem facing online businesses is that the level of fraud in online transactions is much higher, all other things being equal, than either in-person or telephone transactions. Online transactions are less than 5 percent of all credit card transactions, but they are responsible for about 50 percent of the total dollar amount of credit card fraud. 3. In about 200 words, outline the reasons why a consumer who owns a credit card would want to use an electronic payment system, such as PayPal, for an Internet transaction. In an additional 200 words, outline the reasons that a small merchant might want to use an electronic payment system in addition to, or instead of, accepting credit cards. Answer: Responses will vary, but will include security, wide acceptance for many vendors and buyers, no need to risk other online payment options, and all that is needed is an e-mail address (vendors must set up a PayPal account). 4. In one paragraph, outline the problems that a company might encounter if it were to conduct international transactions using electronic cash.
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Electronic Commerce, 7th Edition Solutions 11-2 Answer: Although the costs of using e-cash for international transactions are less than using other payment options, there is a chance that e-cash can be forged or used in a money-laundering scheme. 5. In about 100 words, explain what electronic wallets are and how they can be useful to consumers. Answer: E-wallets are a storage place for credit card and personal information. They are useful in that they buyer does not have to reenter their information when they buy on the Web.
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