Paying Via The Net

1
Chapter 13

• Paying Via The Net

2
Agenda

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment

3
Digital Payment Requirements

• Acceptability
• Anonymity privacy untraceability
• Convertibility
• Efficiency
• Flexibility
• Integration
• Availability

4
Digital Payment Requirements

• Reliability
• Scalability
• Security
• Integrity
• Authentication
• Usability

5
Agenda

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment

6
Fraud Detection

• Methods
• Products

7
Methods

• Checksum for credit card no.
• Verify the credit card no. and expiration date
  with card issuer
• Check postal address with online services
• Confirmation with e-mail address
• Digital certificates for non-repudiation
• Predefined purchase limits each time and per week

8
Methods

• Confirmation web page for terms and conditions
• Data base with credit card no., e-mail address,
  and phone no.
• Document the complete online transactions
• Trustworthy logistics partner
• Unique key for online shipping digital merchandise

9
Methods

• Business rules for checking suspicious orders and
  credit card no.

10
Products

• Fraud Shield by ClearCommerce
• Visa

11
Agenda

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment

12
Online Payment Methods

• Pre-paid
• Electronic cash systems
• Smart cards
• Instant-paid
• Debit cards
• Post-paid
• Credit cards
• Invoices
• Internet cheques
• Cash on delivery

13
Electronic cash systems

• Saving digital money to the hard disk or floppy
  disk
• Pros cons
• Anonymity
• Security with encryption and digital signature
• Splitting value
• Internet usage only
• Easy to lose
• No anonymity with physical delivery
• No open standard

14
Electronic cash systems

• Products
• DigiCash
• NetCash
• CyberCoins
• IBM micro payment
• MilliCent

15
Smart Card

• Embedded chips with encrypted digital money
• Pros and cons
• Use password to ensure the security
• Cyber and real usage
• Low transaction cost
• No open standard

16
Smart Card

• Types
• Health Care
• Phone
• Debit
• Products
• Mondex
• VisaCash

17
Instant-paid

• Debit cards
• Pros and cons
• Access to banks database
• Less fraud error
• High security
• Complicated
• Need hardware software
• Signature through fax
• High communication costs

18
Instant-paid

• Product
• Direct Debit

19
Credit Cards

• Four players customer, merchant, issuer and
  acquirer
• Pros cons
• International
• Low security
• High transaction cost
• Fraud

20
Credit Cards Security standards

• Secure Socket Layer (SSL)
• By Netscape
• Encrypt traffic between the web browser and web
  server
• Secure Electronic Transaction (SET)
• By Visa and MasterCard
• Public key encryption using digital certificates
  for both buyer and seller

21
Credit Cards Security standards

• SET features
• High security
• Low visibility
• Standards
• Non-repudiation
• Chip-secured Secure Electronic Transaction C-SET
• Use chip card for any network devices
• Reduce cost and complexity for merchant

22
Invoices

• Business-to-business
• Usage reasons
• High volume transaction
• No need to reorganize the old process
• Low transaction fee

23
Internet Cheques

• Electronic cheques
• Pros and cons
• Require payers digital signature
• Special software network
• Less manual steps
• Systems
• echeck by US Department of the Treasury

24
Cash on Delivery (COD)

• Pros and cons
• Require logistics party
• More expensive
• Extra cost paid by customer

25
Agenda

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment

26
Online Payment Types

• Micro payments
• Less than 5
• Electronic cash transaction
• Consumer payments
• Between 5 and 500
• Credit card transactions
• Business payments
• Over 500
• Direct debit or invoice transaction

27
Agenda

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment

28
The Future Payment

• Projects
• Secure Electronic Marketplace for Europe (SEMPER)
• The Open Trading Protocol (OTP)
• Open Buying on the Internet
• Global Trust Enterprise
• Goal
• Internet payment infrastructure to achieve the
  digital payment requirements

29
Points to Remember

• Digital Payment Requirements
• Fraud Detection
• Online Payment Methods
• Online Payment Types
• The Future Payment