Case Study Digital Wallets on Mobile Devices: Apple and Google

One of the fastest-growing segments of the online payments business is mobile payments. U.S. mobile payments are expected to reach $140 billion by 2019 and purchases using mobile devices could account for half of all online retail sales by 2017.

Google introduced one of the first digital wallet products that would work on a mobile device in 2011 when it also introduced support for the operation of NFC chips in its Android mobile operating system. Google Wallet stores a MasterCard account for users that agree to maintain a cash balance with the cards issuing bank, so it operates essentially as a debit card. Google Wallet does not charge a fee to merchants or the MasterCard issuing banks, nor does it charge a transaction fee. Instead, it generates revenue from advertisers who pay to display ads, offer coupons or other promotions (specific ads are displayed based on the mobile devices proximity to the stores that are making the offers). Google Wallet has been slow to catch on with users.

In 2014, Apple introduced a digital wallet product for its mobile devices called Apple Pay. In operation, Apple Pay is similar to Google Wallet; however, the infrastructure and revenue model is different. Apple Pay charges the issuing banks a fee of 0.05 percent of the transaction amount and guarantees each transaction; that is, if the transaction is fraudulent, Apple will cover the loss. Credit card companies normally charge merchants a fee ranging between 2 and 3 percent of the transaction amount, so the additional Apple Pay fee serves as a low-priced insurance plan for them. Consumers will not be charged at all for using Apple Pay and will not be given advertising messages. Further, Apple has stated that it does not collect information about consumer buying habits from Apple Pay data. Apple arranged for American Express, Discover, MasterCard, and Visa credit cards to be included in their system, along with a group of large card-issuing banks. They also included major retailers such as Bloomingdales, Disney, Staples, Walgreens and Whole Foods. These participants will be able to collect data on consumer buying habits, but only on those consumers that use their card or shop at their stores. Apple reported that more than a million credit cards were registered with Apple Pay in the first three days it was available. After Apple Pays introduction, an increase in the number of retailers that accept NFC payments (as you learned in this chapter, NFC technology is used by both Google Wallet and Apple Pay) caused an increase in the use of Google Wallet.

Amy Lawrence, the owner of Random Walk Shoes, has asked you again to help her as she launches her companys first Web site (see week 5 case study). She is interested incorporating a mobile application to her brick and mortar operation and wants your recommendation regarding credit card processing. This weeks assignment is to research Google Wallet and Apple Pay and compare the benefits and drawbacks of each from a consumers standpoint, a retailers standpoint, and a banks standpoint. Include why you think Google decided to develop this new product why Google also decided to continue offering its Google Wallet product. In addition, please include an explanation what a card not present transaction is and why it presents a greater risk than card present transactions for a retail business. Amy foresees that her business with grow into a large company, so discuss how the Electronic commerce software for a small online store must summarize sales and shipments, and contrast it with how software for a large enterprise might do so.

The following requirements must be met:

Write between 1,000 1,500 words using Microsoft Word in APA 6th edition style.

WEEK 5 CASE STUDY BELOW-----THIS PART DOES NOT NEED TO BE COMPLETED. It requires the week 5 case study to answer the question above.

Week 5 Case study

Amy Lawrence, the owner of Random Walk Shoes, has asked you to help her as she launches her companys first Web site. In college, Amy was a business major with an artistic bent. She helped to pay her way through college by decorating sneakers with her hand-painted designs. Her business grew through word of mouth and through her participation in crafts fairs. By the time she earned her degree, Amy was running a successful business from her dorm room.

Amy expanded her sales efforts to include crafts fairs in nearby towns. She hired two college students to work for her, and she convinced several area gift shops to stock samples of her merchandise. The gift shops were not an ideal retail outlet for her products, however, since most people who want to buy decorated sneakers want to choose specific designs or have special designs created just for them. Customers also want to choose the specific shoes on which the design is placed. One of Amys student workers suggested that she consider selling her products on the Web.

Realizing that the Web would give Random Walk Shoes a chance to reach a much wider audience and would allow customers to choose design-shoe combinations, Amy began gathering information and developing estimates about her planned Web activity. Using her digital camera, she took several hundred pictures of shoes, designs, and shoe-design combinations. She then hired a local Web designer to create sample pages for the website, including catalog pages that contained the digital images. She also created a number of videos showing the customized sneakers in action.

When the Web designer had completed a prototype of the site, Amy worked with the designer to calculate page sizes (including the images). The average page size was 1 MB. She also calculated the average size of a video to be 800 MB. Amy and her employees then navigated the prototype site several hundred times to develop an estimate of how many pages an average visitor would download and how many videos they would watch. They concluded that an average site visitor would visit 23 pages and watch one video during each visit. Amy worked with the Web designer to develop estimates of the activity they expect to occur on the website during its first two years of operation. These estimates include:

The database of Web page information (including the images and the videos) will require about 1 TB of disk space.

The database management software itself will require about 500 MB of disk space.

The shopping cart software will require about 300 MB of disk space.

About 8000 customers will visit the site during the first month, and site traffic will grow about 20 percent each month during the first two years.

The site should accommodate a peak traffic load of 1000 visitors at one time.

Amy wants to include features on the site that are similar to those found on competing sites (a list of links to businesses that sell customized shoes on the Web is included in the Web Links for your reference). Amy wants the site to provide a good experience for visitors. If the site is successful, it will generate sufficient revenue to allow an upgrade after two years. However, she does not want to spend more money than is necessary to get the site up and keep it running for the next two years.

Your assignment this week is to review the content in this weeks reading and create a report that will help Amy to determine the features and capacities (RAM, disk storage, processor speed) that should include in the Web server computer she will need for her site. Be sure to include some dialog regarding electronic commerce software and any other software recommendations that you deem beneficial to Amys operation. Additionally, consider the advantages and disadvantages of using open source Web server software (such as Apache Web Server) on the new computer, and summarize your purchase recommendations. You may also include information from vendors sites (such as Dell, HP Servers, or Oracle Enterprise Servers) as an appendix to your report.

PLEASE NOTICE: I have posted this twice with the correct information. People continue to state that there is not enough information. Anyone able to assist with this?