Electronic Payment in Digital Economy and Legal Aspects of Consumer Protection in Bosnia and Herzegovina

Abstract

 Introduction: Electronic payment is a rapidly growing field of modern financial transactions, relying on technologies such as tokenization, multi-factor authentication, and encryption to ensure security. At the same time, legal regulations (EU directives and national laws) provide consumer protection against misuse, while this paper presents conclusions on the development of electronic payments in the local market.

 Aim: The aim of this paper is, on the one hand, to identify key security technologies that enable the safe execution of digital transactions, and on the other hand, to examine the legal framework and the effectiveness of existing regulations.

 Materials and Methods: In preparing this paper, the authors used a combination of qualitative and comparative research methods. The analysis of specific platforms is illustrated through a case study (PayPal). The materials include professional literature in the fields of business informatics, finance, and law, as well as applicable legal regulations and European directives.

 Results: The research has shown that electronic payments offer significant advantages in terms of transaction speed and availability, but also carry risks related to data security and potential misuse. The analysis of the legal framework indicates that PSD2 and GDPR provide a wide range of mechanisms for consumer protection, while domestic laws in the region often lag in their implementation. From a technical perspective, modern platforms apply advanced security measures such as encryption and multi-factor authentication, which significantly reduce the risk of fraud. The analysis of the PayPal platform shows that global services have more developed protection mechanisms and more transparent policies, while local banks only partially comply with these standards.

 Conclusion: Electronic payment is the foundation of the digital economy, but its sustainability depends on the synergy between legal regulation and technological solutions. The analysis has shown that global platforms lead in applying security technologies and transparent rules, while local systems require additional investments and alignment with international standards.