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The Internet and technology are convenient due to eased communication and digitalized online payments. Today, people can communicate with friends and family members using online platforms and technologies, such as Skype and social media (Oren, 2018). Besides, quick and instant transfer of money across borders through technology and online platforms creates expediency. Overall, the Internet and technology have enhanced easy communication and convenience in transfer of funds.

One of the most common challenges of online payment is fraud. During the online transactions, someone else can key in details of a card holder. Therefore, the payment fraud may occur by the unauthorized online payment transaction. Fraud may also occur when the user of the online payment method, such as PayPal, demands a false refund, commonly known as chargebacks (Mohamed & Mohamed, 2019). In this scenario, a seller can lose money to a dishonest customer.

Stakeholders in online payments can improve to solve fraud by applying advanced EMV. EMV is a payment verification method that uses technical standards for smart payment cards and payment terminals. The payment method is used to validate that the payment card is genuine (Masihuddin et al., 2017). The method is also used for the facilitation of process authorization. Similarly, integration of automated SMS notifications would be useful in alerting the card owner to approve a transaction before it is completed.

On the issues of chargebacks, application of blockchain technology can easily stop such tendencies. This technology ensures that once a transaction has been made, it cannot be reversed, making it hard for dishonesty users to chargeback.

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Online payments have fundamentally transformed the way society engages in financial transactions, providing unprecedented convenience in communication and the movement of funds. The Internet's versatility allows for instant communication between individuals and businesses, enhancing the connections that facilitate online buying and selling (Oren, 2018). As online platforms evolve, the speed and efficiency of monetary transfers have augmented, enabling individuals to perform transactions across great distances with the click of a button. This evolution has not only increased the volume of online commerce but has also resulted in a revolution in banking practices, catering to the needs of consumers who demand rapid and easy access to their funds.

However, alongside these advancements come significant challenges, particularly regarding security. The rise of online payment systems has led to an increase in fraudulent activities. Users are often vulnerable during online transactions, as identity theft and fraudulent activities can occur swiftly and in various forms. One common method of fraud includes unauthorized transactions where criminals obtain the cardholder's details and make false purchases (Mohamed & Mohamed, 2019). In addition, a notable issue in the online payment system is chargebacks, where users claim refunds fraudulently. This scenario places a financial burden on merchants who must navigate these disputes, often leading to decreased trust in the online payment systems.

To combat these issues, several measures can be adopted by stakeholders involved in online payments. The implementation of EMV technology is vital in enhancing payment security. EMV, which stands for Europay, MasterCard, and Visa, incorporates chip technology in payment cards, making it significantly harder for fraudsters to replicate cards and engage in unauthorized transactions (Masihuddin et al., 2017). This technology provides a secure platform for transactions, ensuring that payment cards are genuine and have not been tampered with. Additionally, the process authorization that accompanies EMV helps to identify suspicious activities in real-time, therefore minimizing the risk of fraud.

Moreover, integrating automated SMS notifications can further improve transaction security. By notifying cardholders of transactions they did not initiate, this feature allows immediate action to be taken in case of unauthorized transactions. Such alerts can serve as a first line of defense for consumers and create a more secure environment for online commerce.

Another innovative approach to addressing issues related to chargebacks is the incorporation of blockchain technology. Blockchain offers a secure and transparent framework for transactions, where each transaction is recorded in a manner that is immutable and verifiable. This setup effectively combats fraudulent chargebacks as it creates a permanent record that cannot be altered after completion (Tapscott & Tapscott, 2016). As such, stakeholders can use blockchain to facilitate a sense of security and trust among users, deterring fraudulent claims significantly.

In conclusion, while online payments offer immense convenience and streamline financial interactions, the accompanying risks cannot be overlooked. The increase in fraudulent transactions and chargebacks implies that it is imperative for stakeholders—ranging from financial institutions to consumers—to adopt more robust security measures. The integration of EMV technology and blockchain processes represents a significant step forward in addressing these challenges. By harnessing these technologies effectively, the online payment landscape can achieve enhanced security and foster a safer environment for all users.

References

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• Mohamed, A. A., & Mohamed, A. A. (2019). Assessment of challenges and opportunities of e-payment in Sudan (No. 2001). EasyChair.
• Oren, D. (2018). Technology: convenience and therapeutic leverage. In Psychoanalysis Online 3. Routledge.
• Tapscott, D., & Tapscott, A. (2016). Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin.
• Zhang, Y., & Li, M. (2020). The impact of online payment on consumer behaviors. Journal of Business Research, 110, 172-178.
• Chen, L., & Zhang, Y. (2019). Analysis of security and privacy issues of online payment systems. Security and Privacy, 2(1), e58.
• Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Bitcoin.org.
• Giersch, S. (2021). Payment innovations: An examination of blockchain-based payment systems. Journal of Financial Innovation, 7(1), 1-20.
• Lee, J. Y., & Kim, J. H. (2017). A comparative study on the effect of traditional payment and mobile payment on consumer satisfaction. Journal of Retailing and Consumer Services, 34, 181-189.
• Rogers, D. (2018). The future of banking: Innovations in digital payment systems. Financial Technology Journal, 12(3), 45-60.