Chapter 2: The Digital Economy

What is e-commerce?

• Sharing goods and services through social media platforms.

• Trading goods and services through phone calls.

• Buying and selling of goods and services over the internet.

• Exchanging goods and services through physical stores.

Name one advantage of digital payment systems.

• Cost-effectiveness

• Security

• Privacy

• Convenience

What is the main difference between e-commerce and traditional commerce?

• E-commerce involves physical stores, while traditional commerce involves online stores.

• E-commerce is more expensive than traditional commerce.

• E-commerce is only used for small businesses, while traditional commerce is used for large businesses.

• E-commerce involves online transactions, while traditional commerce involves offline transactions.

What are the key components of a digital payment system?

• credit card, debit card, cash

• barcode scanner, receipt printer, cash register

• payment gateway, payment processor, digital wallet

• ATM, bank teller, checkbook

What are the challenges faced by e-commerce businesses?

• Lack of technological infrastructure, poor website design, and limited payment options.

• Lack of customer demand, high operating costs, and limited market reach.

• Competition, customer trust, logistics, cybersecurity, and customer retention.

• Lack of product variety, poor customer service, and limited marketing strategies.

What are the different types of digital payment systems?

• Mobile wallets, online banking, peer-to-peer payment apps, cryptocurrencies, and contactless payment methods.

• ATM withdrawals, direct deposit, and prepaid cards.

• Checks, money orders, and wire transfers.

• Credit cards, debit cards, and cash.

What are the benefits of online marketplaces for sellers?

• Access to a larger customer base, increased visibility and brand exposure, simplified payment and shipping processes, and easy sales management.

• No access to a larger customer base, low visibility and brand exposure, complicated payment and shipping processes, and inefficient sales management.

• Decreased visibility and brand exposure, smaller customer base, complicated payment and shipping processes, and challenging sales management.

• Higher costs and fees, limited customer reach, complex payment and shipping processes, and difficult sales management.

What is a digital wallet in the context of digital payment systems?

• A physical wallet that stores digital currency.

• A software-based system that securely stores users' payment information and passwords for numerous payment methods and websites.

• A type of bank account used for online transactions.

• A card used for making payments online.

What is a key disadvantage of digital payment systems?

• They are not widely accepted.

• They are too easy to use.

• They can be susceptible to cyber attacks.

• They are too expensive.

What is the role of a payment gateway in a digital payment system?

• It is used to transfer funds from the buyer's account to the seller's account.

• It is used to store the buyer's payment information for future transactions.

• It is used to authenticate the buyer's payment information and authorize payment transactions.

• It is used to print receipts for the transactions.