Disintermediation has Reduced Online Transaction Risk - Example

Disintermediation has Reduced Online Transaction Risk Table of Contents Introduction 3 Discussion 3 Bitcoin 4 British Airways 5 Retail Market 8 Conclusion 9 References 10 Introduction The process of elimination of monetary intermediates is known as disintermediation. Intermediaries mostly occur between suppliers and users. They bridge the gap between end users and business or service owners. Intermediaries have played a very important role in history in the buying and selling process of products and service. The emergence of internet in the world has reduced the domination of brokers in online business. Due to disintermediation both buyers and sellers have been profited. The process of disintermediation occurs because of various factors including inflation. The traditional method of buying and selling of products via broker is not entertained by people in the modern world. Elimination of broker cost reduces the price of products and companies can sell their products directly to buyers without any interference of middleman. Due to these advantages people in the world prefer e-commerce without involvement of intermediates. This essay includes some important evidences that prove disintermediation is useful for people. Discussion E-commerce has become a very essential mode of buying and selling products and services in the world. Almost every country in the world has the facility provided to them by companies who deliver products to people to their desired address just after the purchase. In the early phase of 20th century, the involvement of brokers and middle-man was significant (Friedman, 2001, p.25). Many companies believed that they could not get proper customer leads without involving brokers in their business. Customers had limited choice and had to undergo the same procedure. In the modern world due to emergence of internet the traditional mode of buying and selling products has been diminished. The involvement of traditional intermediaries has reduced in the past few years which became beneficial to people as per random polls organized in different cities. Manufacturers have a chance to deal directly with their customers without involvement of dealers which is beneficial for them. Manufacturers do-not have to provide share of their profit to intermediaries which is definitely a positive aspect for them (Ribbers, 2006, p.295). On the other hand consumers can avail products and services at cheap rates because intermediaries do-not have to paid any profit of a purchased product. With the extinction of intermediaries both buyers and sellers have achieved more opportunities as well as direct relation which has helped in development of this business prospect (Steinfield, 2003, p.105). The safety and security has also improved with less involvement of third party brokers. In the traditional ways of business over internet the mode of payment was not much secured. Brokers would have any customer bank and savings details which was not a very ethical fact. Hence consumers did-not trust this mode of business and preferred traditional ways of shopping. However due to emergence of internet the involvement of intermediaries have reduced and people believe in the transactions that happens online (Elliot, 2003, p.17). Bitcoin Bitcoin is the largest crypto-currency in the world for payment system. This software was introduced in the year 2009 to record entire payment system without involving any intermediaries. The concept of Bitcoin is new and it provides users to create a personal wallet with the help of mobile app or computer program. Since this mode of payment is electronic hence users find transactions safe because every payment is recorded, detailed and verified (Anttiroiko, 2008, p.92). The Bitcoin software is verified by public ledger so it ensures safety of money. Users do-not need to give out their banking details while transactions which assures safety during online transactions including online purchases. It is a peer-to-peer agreement network which does not require any involvement of broking partners or third party vendors. The process of Bitcoin usage is very simple. Users can earn their own Bitcoin and every detail of it is recorded (Dave, 2008, p.43). Users also have the convenience to send or receive payments online from other users using the same mode of payment. The mode of transaction is fast, safe and secured by public ledger which provides users safety and security in their transactions. Users also have the facility to notify their payments as when required by them. The process has been implemented to ensure safety and full-proof money transactions from one account to other. Each and every Bitcoin is fully protected by customer signatures which is digital, Bitcoin are also authenticated by government bodies in order to reduce the limit the chances of theft of money. The usage of Bitcoin depends on dedicated hardware computing which provides complete security from loss of any Bitcoin during a transaction. Moreover due to no involvement of middle-man the transaction procedure is sensitive (Turban, 2006, p.81). Due to emergence of Bitcoin disintermediation has occurred in online transaction which is a positive step for human society. The monetary information and banking details of every person is sensitive and this information should not be given out for any purpose because there is always a risk factor in the society because of unsocial elements. The usage of Bitcoin has become so vast in the society because people fined the mode of transaction trustworthy and safe. Hence disintermediation is useful for because it has given freedom to people against online risks. British Airways The rise of internet has provided airline industry to make direct relations with customer who has proved to be beneficial for both customers and aircraft owners. There are many airlines in the world that provide service to millions of people across the globe. British Airways is one of the most recognized flag carrier airlines of United Kingdom. Previously due to lack of technological advancements in ticket selling procedures they had to involve partners who became middle-man for their industry. However after random usage of internet by people buying and selling of tickets online is done directly by many airlines. British Airways believes in direct transaction with their customers. Previously British Airways used to sell their tickets by involving brokers by paying them commission which became the reason for high price of airlines. However in the modern world British Airways has created its own website for selling tickets online without consent of any middle-man which has made the procedure easy and people find purchasing tickets easy and safe during the transactions (Roebuck, 2011, p.39). The most important factor is that customers do-not have to go to ticket booking agencies to book tickets which have reduced the purchase amount of tickets. British Airways has implemented many ideas like reduction of fare price for loyal customers so that can get attention of customers and increase their clients as a whole. Discounts on airline tickets have definitely attracted many customers towards their web-site. British Airways has provided their customers with a highly advanced and remarkable web-site for purchasing tickets online (Roberts, 2008, p.11). Every month about 1.5 million people purchase airline tickets through the web-site of British Airways because of disintermediation. In the year 2007 it had been estimated that online sales of tickets and e-ticketing can benefit airline industry and will become one of the most important factor for economy generation for the industry. British Airways has taken many steps to ensure people safety and security during online transaction of tickets (Lee, 2008, p.77). There are people who do-not want to buy tickets online because of fear that they might lose their money while purchasing if something goes wrong. In order to reduce the fear of customers British Airways has implemented many features in their web-site. First of all customers can select their preferred flights based on their preferable time. Next, they can purchase tickets by selecting a variety of price range. If something goes wrong during transaction by customers or the web-site the money is refunded within 48 hours after checking details. Due to these advancements people trust the web-site and rely on the safety and security that the company has adopted in order to ensure proper online transaction (Harvie, 2002, p.192). The purchasing mode of tickets is done via standard protocols in order to maintain the confidentiality of customer details that is entered during transactions. The information entered by customers regarding their debit or credit cards is encrypted in order to provide maximum security during the transactions. The web-site of British Airways is based on obsolete secured mode. Whenever a customer enters a private area for making a transaction a pop up appears on the screen of administrator, when a customer moves from a private area to the public area after making a transaction the personal data gets deleted immediately leaving no information for anyone to capture. The process of online ticket booking has been made efficient and secure by these implementations. In many countries airline industries has opted this kind of procedure to reduce the headache of ticket purchasing by customers. Some of the airlines still depend on travel agents for selling their tickets which result in increase in the cost of tickets as well as customer security of money is also not guaranteed. Another effective airway is the South Western Airways of United States of America which has its own web-site for customers to purchase tickets online through a safe payment mode. The usage of internet among people has grown and people like to make transactions online so that they do-not have to go somewhere to purchase their tickets at a high price. Due to disintermediation people rely on the process of ticket booking and it has been observed in a period of time that there has been a shift of purchasing of tickets from traditional mode to online mode because of lack of middleman (Piercy, 2008, p.53). People find online ticket booking easier and secure now-a-days and hence prefer to buy tickets online rather than blindly trusting a third party. Retail Market Wal-Mart is one of the largest retailers in the world. It has been observed that wall-mart provides large number of products both online and offline. The web-site of Wal-Mart consists of all the information of products available in the retail store. It consists of price, brands and details of products available. The website of Wal-Mart is easy to navigate and provides a highly secured mode of payment with a guarantee of delivery to nearby places (Combe, 2012, p.7). Previously buying products online was through different web-sites which was not reliable for customers’ point of view. The price of the products available was more compared to their original price because of involvement of middle-man. However with the emergence of internet customers purchase products directly from retail stores they trust. The mode of their payment also became secured and huge number of customers visit the web-site of wall-mart to buy their products. The process of disintermediation has helped to increase number of customers and it has also been helpful in gaining the trust of customers by enhanced Card Verification method and verifying Card security with the help of advanced protocols (Szoka, 2011, p.31). Retail companies like Tesco has also been able to attract huge customer base with the help of their web-site. Tesco has introduced BMT micro security software which helps in removing personal information of customers like card details after successful transaction. These advancements have helped retail industries get hold of their customers (Milne, 2009, p.26). On the other hand customers are benefited with low price while purchasing their desired products and a guarantee of safety and security of their transaction with an approach of disintermediation. Conclusion From the above discussions it is clear that disintermediation has lessened the risk on transactions that is made to purchase products or services. Economic disintermediation is an important aspect of e-commerce because it has brought a revolution in the usage of online services and products without any risk of theft. The traditional ways of purchasing products through middle-man has reduced in the modern world. Due to implementation of modern technology by companies the payment mode online has been made safe and secure. Previously people had a notion that the information they submit while making online transactions may become risky. However with the implementation of latest software and standard protocols customers have been assured complete security while they enter their personal details online. Due to disintermediation several companies are able to supply their products directly to customers and feedbacks from customers come directly to companies which is helpful for both the parties. The lack of involvement of middle-man has definitely proved to be efficient in the buying and selling process of products and services online. Hence it can be concluded that disintermediation has decreased the risk of purchasing items by consumers. References Anttiroiko, A., 2008. Electronic Government. London: Taylor & Francis. Combe, C., 2012. Introduction to E-Business. New Jersey: Pearson. Dave, C., 2008. E-Business and E-Commerce Management. London: Routledge. Elliot, S., 2003. Seeking Success in E-Business. London: Routledge. Frieden, R., 2001. Managing Internet-Driven Change in International Business. London: Sage. Harvie, C., 2002. Globalization and SMEs. London: Routledge. Lee, I., 2008. E-Business Models, Services, and Communications. New York: Springer. Milne, A., 2009. The Fall of the House of Credit. London: Routledge. Piercy, N., 2008. Market-Led Strategic Change. London: Sage. Ribbers, P., 2006. E-Business. London: Routledge. Roberts, S., 2008. Harness the Future. New Jersey: John Wiley & Sons. Roebuck, K., 2011. Electronic Commerce. New Jersey: Pearson. Steinfield, W. C., 2003. New Directions in Research on E-Commerce. London: Kogan Page. Szoka, B., 2011. The next Digital Decade. New York: McGraw-Hill. Turban, E., 2006. Electronic Commerce 2006. New York: Springer. Read More