MELJUN CORTES Electronic Payment System
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Transcript of MELJUN CORTES Electronic Payment System
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Conventional ways of payment
Cash
Check
Credit Card
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Electronic way
Software Wallets
Smart Cards
Electronic Cash
Credit/Debit Cards
All of these payment methods work well withweb commerce
VPN (Virtual Private Network)
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Electronic Cash
Privacy and Security Concerns
Small Purchases over the net
Example: News paper, greeting card and the
likes
Micropayments
Can it be copied, reused or forged?
Issues:
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Electronic Cash
Important Characteristic in common withreal currency:
It must be possible to spend e-cash once
E-cash should be anonymous
Security proceduresTo guarantee
transaction between two parties
Anonymity also prevents the seller from
collecting information about spending habits
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Electronic Cash
Disadvantages:
Lack of Taxation procedure or policies, audit
trail
Money Laundering, jurisdiction issues
Susceptible to forgery
No standards were developed
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Electronic Cash
Digi Cash E-coin.net
Filed for chapter 11 in US SEC
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Electronic Cash
Beenz.com
Flooz.com
Filed for chapter 11 in US SEC
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Electronic Wallets
Entering Shipping and paymentinformation each time a purchase is made
Answer: Electronics Wallets
Similar to Physical Wallets
Holds Credit cards
Electronic Cash
Owner identification
Owner address information
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Electronic Wallets
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Electronic Wallets
Agile Wallet
Hosted in Agile Wallet secure electronic server
The server handles the consumer payment
and payment information
Can only be used in merchants that support
Agile wallet
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Electronic Wallets
E Wallet
Product of Launchpad technologies
Free wallet software that can be
downloaded
It is not stored in a central server
Encrypted and password protected
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Electronic Wallets
Microsoft Wallet
Comes pre-installed in Internet Explorer 4.0 and
higher version
It works with American Express, Discover,
Mastercard and Visa Cards
In 2001 Microsoft announced its shut-down of
the service due to flaws in security
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The W3C Proposed Standard
The W3C proposed standards for electronic walletswill impact every vendors wallet offerings.
The W3C Electronic Commerce Interest Group(ECIG) developed the Common Markup for WebMicropayment Systems public working draft.
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The ECML Standard
The consortium of America Online, Brodia, Compaq,
CyberCash, Dell, IBM, Microsoft, Visa USA, andMasterCard has agreed on a technology called ECML,or electronic commerce modeling language.
The ECML standard will expedite online processing forcustomers by simplifying the form-filling procedure.
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Smart Cards
A smart card is a plastic card with an
embedded microchip containing information
about you.
A smart card contains private user informationsuch as financial facts, private encryption keys,
account information, credit card numbers, health
insurance information, etc.
Can store 100 times more information than anordinary credit cards.
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Mondex Smart Cards
Mondex, a product of Mastercard Internationalis a smart card that holds and dispenses
electronic cash.
Mondex requires special equipment such as card
reader to process.
Containing a microcomputer chip, Mondex cards
can accept electronic cash directly from a users
bank account.
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Mondex Smart Card Processing
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Smart Cards
Popular in Europe and Japan
Being used to for payphone and pay television
In Australia, retail counter and restaurant cashregisters with smart card reader
In US, it is being used for transportation
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Mondex Smart Cards
It requires special equipment: Specific Smart
card reader at the merchants end
Internet users, must attached reader in their pcs
These requirements have proven to be the barriersto the Smartcards success
Challenges
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Credit and Charge Cards
A credit card, such as a Visa or a MasterCard,
has a preset spending limit based on the
users credit limit.
The collective term payment card will refer toboth types of card.
A charge card, such as one from American Express,
carries no preset spending limit.
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Credit and Charge Cards
Advantages:
Their worldwide acceptance
They are good for online transactions
Payment cards provide fraud protection
Disadvantages:
Payment card service companies charge
merchants per-transaction fee and monthly
processing fee
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Payment Acceptance and Processing
Open and closed loop systems will accept and processpayment cards.
Closed-loop, banks serves as a broker between card
users and the merchants accepting cards (ex.American Express, Discover etc.)
Open-loop, when the transaction is processed by a
third-party (ex. Visa or master card)
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Payment Acceptance and Processing
S El t i T ti (SET)
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Secure Electronic Transaction (SET)
Protocol
SET is a secure protocol jointly designed by MasterCard
and Visa with the backing of Microsoft, Netscape, IBM,
GTE, SAIC, and other companies.
The purpose of SET is to provide security for card
payments as they traverse the Internet between
merchant sites and processing banks.
SET verify that the consumer is the payment holder who
owns the payment card
S El t i T ti (SET)
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Secure Electronic Transaction (SET)
Protocol
The SET specification uses public key cryptography and
digital certificates for validating both consumers and
merchants.
The SET protocol provides confidentiality, data integrity,
user and merchant authentication, and consumer non-
repudiation.
S El t i T ti (SET)
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Secure Electronic Transaction (SET)
Protocol