This session discusses about the payment systems available in an commerce environment. Which include: credit card e-commerce transactions, e-commerce digital payment in the b2c arena, and electronic billing and presentment systems.

1. Entrepreneurship &
Commerce in IT
12
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg

2. Recap so far…
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg

3. Security and Encryption
• The e-commerce security environment
• Types of threats
• Technology solutions
• Protecting Internet communications
• Encryption
• Securing channels of communication
• Secure socket layers (SSL)
• Protecting networks - Firewalls
• Protecting servers and clients – OS controls/Anti-virus software

4. Today…
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg

5. Web Payment Systems
• Payment systems
• Credit-card e-commerce transactions
• E-commerce digital payment in the B2C arena
• Electronic billing and presentment systems

6. Payment Systems

7. Payment System
• any system used to settle financial transactions through
the transfer of monetary value,
• and includes
• the institutions, instruments, people, rules,
procedures, standards, and technologies that make
such an exchange possible.
• A common type of payment system is the operational
network that links bank accounts and provides for
monetary exchange using bank deposits.

8. Payment Systems
• Debit Card
• Credit Card
• Electronic Funds Transfer
• Direct Deposit
• Direct Debt
• Online Banking
• E-Commerce Payments

9. Payment Systems Cont.d
• Debit Card
• a plastic payment card that provides the cardholder electronic access to their bank accounts at a financial
institution
• The card, where accepted, can be used instead of cash when making purchases
• Credit Card
• a payment card issued to users (cardholders) as a method of payment.
• It allows the cardholder to pay for goods and services based on the holder's promise to pay for them
• The issuer of the card (usually a bank) creates a revolving account and grants a line of credit to the
cardholder, from which the cardholder can borrow money for payment to a merchant or as a cash
advance.
• Electronic Funds Transfer
• the electronic transfer of money from one bank account to another, either within a single financial
institution or across multiple institutions, through computer-based systems and without the direct
intervention of bank staff

10. Payment Systems Cont.d
• Direct Deposit
• A deposit of money straight from the source (and initiated by the source) into a bank
account, by wire, or other means.
• Direct Debit
• a financial transaction in which one person withdraws funds from another person's bank
account.
• Formally, the person who directly draws the funds ("the payee") instructs the bank to
collect an amount directly from another's ("the payer's") bank account designated by the
payer and pay those funds into a bank account designated by the payee
• Online Banking
• can electronic payment system that enables customers of a financial institution to
conduct financial transactions on a website operated by the institution, such as a retail
bank, virtual bank, credit union or building society

11. E-Commerce Payment
System
• facilitates the acceptance of electronic payment
for online transactions.
• Also known as a sample of Electronic Data
Interchange (EDI),
• e-commerce payment systems have become
increasingly popular due to the widespread use
of the internet-based shopping and banking.

12. E-Commerce Payment
System Cont.d
• security measures
• CVN - card verification number
• certificate from Certified Authority
• must have Public-Key Infrastructure
• must follow security procedures and protocols set
by VISA MasterCard

13. Credit Card Payment System
• credit card payments
• widely popular
• most common form of payment in e-commerce
• cannot be ignored for online businesses because they are
popular
• can be expensive for the merchant to accept because of
transaction fees primarily
• Debit cards constitute an excellent alternative with similar
security but usually much cheaper charges.

14. Credit Card Payment System
Cont.d

15. Methods of Online Payment
• Net Banking
• PayPal
• Google Wallet
• Mobile Money Wallets
• Apple Pay
• Google Pay
• Bitcoin

16. Net Banking
• a system that does not involve any sort of physical card.
• well known in India
• used by customers who have accounts enabled with Internet Banking.
• Instead of entering card details on the purchaser's site,
• in this system the payment gateway allows one to specify which bank they wish to pay from.
• Then the user is redirected to the bank's website,
• where one can authenticate oneself and then approve the payment.
• Typically there will also be some form of two-factor authentication.
• It is typically seen as being safer than using credit cards,
• with the result that nearly all merchant accounts in India offer it as an option.
• A very similar system, known as iDEAL, is popular in the Netherlands.

17. PayPal
• a global e-commerce business allowing payments and money transfers to be made through the Internet
• Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as
cheque's and money orders.
• It is subject to the US economic sanction list and other rules and interventions required by US laws or
government.
• PayPal is an acquirer, a performing payment processing for online vendors, auction sites, and other
commercial users, for which it charges a fee.
• It may also charge a fee for receiving money, proportional to the amount received.
• The fees depend on the currency used, the payment option used, the country of the sender, the country of the
recipient, the amount sent and the recipient's account type.
• In addition, eBay purchases made by credit card through PayPal may incur extra fees if the buyer and seller
use different currencies.
• On October 3, 2002, PayPal became a wholly owned subsidiary of eBay.
• Its corporate headquarters are in San Jose, California, United States at eBay's North First Street satellite office
campus.

18. Google Wallet
• was launched in 2011,
• serving a similar function as PayPal
• to facilitate payments and transfer money online.
• It also features a security that has not been cracked
to date,
• and the ability to send payments as attachments
via email.

19. Mobile Money Wallets
• In undeveloped countries the banked population is very less
• Taking the example of India, there are more mobile phone users than there are
people with active bank accounts.
• Telecom operators, in such geographies,
• have started offering mobile money wallets which
• allows adding funds easily through their existing mobile subscription number,
• by visiting physical recharge points close to their homes and offices
• and converting their cash into mobile wallet currency.
• This can be used for online transaction and eCommerce purchases.
• Many payment options such as Airtel Money and M-Pesa are being accepted as
alternate payment options on various eCommerce websites.

20. Apple Pay
• a mobile payment and digital wallet service by Apple Inc.
• that lets users make payments using
• the iPhone 6, 6 Plus, 6S and 6S Plus,
• Apple Watch-compatible devices (iPhone 5 and later models),
• iPad Air 2, iPad Pro and iPad Mini 3 and 4.
• Apple Pay does not require Apple-specific contactless payment
terminals and will work
• with Visa's PayWave, MasterCard's PayPass,
• and American Express's ExpressPay terminals.

21. Android Pay
• a mobile payments platform in the United States.
• Unveiled at Google I/O 2015,
• it is a successor to Google Wallet
• and the carrier-backed Softcard—Google had acquired its
intellectual property in February 2015.
• Similar to Apple Pay, Android pay
• uses near field communication (NFC)
• to transmit card information facilitating funds transfer to the retailer.

22. Bitcoin
• a decentralized virtual currency
• invented by Satoshi Nakamoto
• 2008
• released as open source in 2009
• The system is peer-to-peer;
• users can transact directly without needing an intermediary.
• Transactions are verified by network nodes and recorded in a public distributed ledger called the
block chain.
• The ledger uses its own unit of account, also called bitcoin.
• The system works without a central repository or single administrator,
• which has led the US Treasury to categorize it as a decentralized virtual currency.
• Bitcoin is often called the first cryptocurrency, although prior systems existed.

23. Bitcoin Cont.d
• Bitcoins are created as a reward for payment processing work in
which
• users offer their computing power to verify and record payments
into a public ledger.
• This activity is called mining and the miners are rewarded with
transaction fees and newly created bitcoins.
• Besides mining, bitcoins can be obtained in exchange for different
currencies,[25] products, and services.
• Users can send and receive bitcoins for an optional transaction
fee.

24. Electronic Billing
• a.k.a electronic bill payment and presentment
• is when a company, organization, or group
• sends its bills over the internet,
• and customers pay the bills electronically

25. Different Types of Electronic
Billing
• Biller-direct
• an approach in which consumers make payments
• directly to one biller
• that issues bills
• that they receive at the website of the firm that issued the bill.
• An example would be of a public utility company offering this payment service to its
consumers.
• A market has emerged for outsourced billing providers
• who specialize in electronic billing processes and technology
• for companies that need to send bills directly to their customers.

26. Different Types of Electronic
Billing Cont.d
• Bank-aggregator
• to make payment at an aggregator or consolidator site,
• usually from a consumer's bank’s website.
• This model allows the consumer
• to make payments
• to multiple billers
• that are pre-registered to receive payments.
• An example in the UK is OneVu.

27. Parties Involved
• Biller payment provider (BPP)
• An agent of the biller that accepts remittance information on behalf of the Biller.
• Biller service provider (BSP)
• An agent of the biller that provides the service for the Biller.
• Consolidator
• A biller service provider that consolidates bills from multiple Billers or other bill service providers
(BSPs)
• and delivers them for presentment to the customer service provider (CSP).[3]
• Customer service provider (CSP)
• An agent of the customer that provides an interface directly to customers, businesses or others for bill
presentment.
• CSP enrolls customers, enables presentment and provides customer care, among other functions.

28. NACHA
• National Automated Clearing House Association
• NACHA-The Electronic Payments Association
• is a not-for-profit trade association
• that develops operating rules and business practices for the Automated Clearing House (ACH) Network
• and for other areas of electronic payments.
• NACHA activities and initiatives facilitate the adoption of electronic payments in the areas of
• Internet commerce,
• electronic bill payment and presentment,
• financial electronic data interchange (EDI),
• international payments,
• electronic checks,
• electronic benefits transfer (EBT)
• and student lending.

29. NACHA Cont.d
• To define some guidelines for best practices,
• NACHA has created the Council for Electronic
Billing and Payment of the NACHA
InteroperaBILL Initiative of the Banking Industry
Technology Secretariat (BITS).

30. References
• Refer wikipedia
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg

31. Next Up…
• Web Marketing Concepts
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg

32. Thank you.
Sachintha Gunasena MBCS
http://lk/linkedin.com/in/sachinthadtg