E-Commerce Payment Systems PDF

E-Commerce Payment Systems E-Commerce or Electronics Commerce sites use electronic payment where electronic payment refers to paperless monetary transactions. Electronic payment has revolutionized the business processing by reducing paper work, transaction costs, labour cost. Being user friendly a...

E-Commerce Payment Systems E-Commerce or Electronics Commerce sites use electronic payment where electronic payment refers to paperless monetary transactions. Electronic payment has revolutionized the business processing by reducing paper work, transaction costs, labour cost. Being user friendly and less time consuming than manual processing, helps business organization to expand its market reach / expansion Some of the modes of electronic payments  Credit Card  Debit Card  Smart Card  E-Money  Electronic Fund Transfer (EFT)  Credit Card  Credit card is small plastic card with a unique number attached with an account. It has also a magnetic strip embedded in it which is used to read credit card via card readers.  When a customer purchases a product via credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time period after which can pay the credit card bill. the actors in the credit card system.  The card holder - Customer  The merchant - seller of product who can accept credit card payments.  The card issuer bank - card holder's bank  The acquirer bank - the merchant's bank  The card brand - for example, visa or mastercard. Credit card payment process  Debit Card  Debit card, like credit card is a small plastic card with a unique number mapped with the bank account number. It is required to have a bank account before getting a debit card from the bank. The major difference between debit card and credit card is that in case of payment through debit card, amount gets deducted from card's bank account immediately and there should be sufficient balance in bank account for the transaction to get completed whereas in case of credit card there is no  Smart card is again similar to credit card and debit card in appearance but it has a small microprocessor chip embedded in it. It has the capacity to store customer work related/personal information.  E-Money transactions refer to situation where payment is done over the network and amount gets transferred from one financial body to another financial body without any involvement of a middleman. E-money transactions are faster and save a lot of time. Electronic Fund Transfer It is a very popular electronic payment method to transfer money from one bank account to another bank account. Accounts can be in same bank or different bank. Customer logins to the bank's website and registers another bank account. then places a request to transfer certain amount to that account. Customer's bank transfers amount to other account if it is in same bank otherwise transfer request is forwarded to other account and amount is deducted from customer's account. Once amount is transferred to other account, customer is notified of the fund transfer by the bank.  Security Systems Following are the essential requirements for safe e-payments/transactions:  Confidential - Information should not be accessible to unauthorized person. It should not be intercepted during transmission.  Integrity - Information should not be altered during its transmission over the network.  Availability - Information should be available wherever and whenever requirement within time limit specified.  Authenticity - There should be a mechanism to authenticate user before giving him/her access to required information.  Non-Repudiabiity - It is protection against denial of order or denial of payment. Once a sender sends a message, the sender should not able to deny sending the message. Similarly the recipient of message should not be able to deny receipt.  Encryption - Information should be encrypted and decrypted only by authorized user. Security Protocols in Internet  Secure Socket Layer (SSL) - It meets following security requirements: Authentication Encryption Integrity Non-reputability  Secure Hypertext Transfer Protocol (SHTTP)  Secure Electronic Transaction - It is a secure protocol developed by MasterCard and Visa in collaboration. Thereoritically, it is the best security protocol. It has following components:  Card Holder's Digital Wallet Software - Digital Wallet allows card holder to make secure purchases online via point and click interface.  Merchant Software - This software helps merchants to communicate with potential customers and financial institutions in secure manner.  Payment Gateway Server Software - Payment gateway provides automatic and standard payment process.