Explains by jay wigdore online payment is a great way to increase your profit

 How

do we purchase on the web?  What choices of payment have we?

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 Looking       

at ….

Credit Card Transactions Digital Currency E-Wallets Smart Cards Micropayments Business to Business (B2B) transactions E-Billing

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 Secure

electronic funds transfer is crucial to e-commerce  Examination of how individuals and organizations conduct monetary transactions on the Internet  Credit-card transactions, digital cash and e-wallets, smart cards, micropayments and electronic bill presentment and payment  Electronic-payment enablers 3

 Popular

form of payment for online purchases  Resistance due to security concerns  Many cards offer capabilities for online and offline purchases   

MasterCard Visa American Express Blue

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 To

accept credit-card payments, a merchant must have a merchant account  Traditional merchant accounts accept only POS (point-of-sale) transactions 

Transactions that occur when you present your credit card at a store

 Card-not-present 

(CNP) transaction

Merchant does not see actual card being used in the purchase

 Authentication 

The person is, in fact, who they say they are 5

 Authorization 

The money is available to complete the transaction

 Acquiring 

The bank with which the merchant holds an account

 Issuing 

bank

bank

The bank from which the buyer obtained the credit card, and the credit-card association

 Verification  Money

issued to merchant after product/service is distributed 6

 Step 

Consumer makes a purchase at an online store, credit card information received by e-store (merchant)

 Step 

3 and Step 4

The credit card association and the issuing bank certify the transaction and the verification is sent to the acquiring bank

 Step 

2

Credit card information is sent from the merchant to the acquiring bank

 Step 

1

5

The merchant ships the product and payment is issued 7

 Credit-Card 

Transaction Enablers

Companies that have established business relationships with financial institutions that will accept online credit-card payments for merchant clients    

iCat Trintech Cybercash NextCard, Inc.

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 Chargeback 

 

When a credit-card holder claims a purchase was made by an unauthorized individual, or when a purchase was not received The charges in question are not the responsibility of the credit-card holder On the Internet, neither a scan of the card nor a signature is registered and the cost is incurred by the merchant

 Visa  

High-risk business models “Best Practices” policy

 Mastercard 

Uses the three digit pin code on the back of the card 9

 Digital       

cash

Cash stored electronically, used to make online electronic payments Similar to traditional bank accounts Used with other payment technologies (digital wallets) Alleviates some security fears online credit-card transactions Allows those with no credit cards to shop online Merchants accepting digital-cash payments avoid credit-card transaction fees eCash Technologies, Inc. is a secure digital-cash provider that allows you to withdraw funds from your traditional bank account 10

 Gift

cash, often sold as points, can be redeemed at leading shopping sites 

An effective way of giving those without credit cards, the ability to make purchases on the Web

 Points-based 



rewards

Points are acquired for completing specified tasks including visiting Web sites, registering or buying products Points can then be redeemed

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 E­wallets  

Keep track of your billing and shipping information so that it can be entered with one click at participating sites Store e­checks, e­cash and credit­card information

 Credit­card companies offer a variety of e­wallets   

Visa e­wallets MBNA e­wallet allows one­click shopping at member sites Entrypoint.com offers a personalized desktop toolbar that includes an e­wallet

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 Smart card 



Card with computer chip embedded on its face, holds more information than ordinary credit card with magnetic strip Contact smart cards 



Contactless smart cards 



To read information on smart cards and update information, contact smart cards need to be placed in a smart card reader Have both a coiled antenna and a computer chip inside, enabling the cards to transmit information

Can require the user to have a password, giving the smart card a security advantage over credit cards 13

 Merchants

pay fee for each credit-card transaction  Micropayments 

Payments that generally do not exceed $10, allows companies offering nominally priced products to profit

 To

offer micropayments, some companies form strategic partnerships with utility companies 

eCharge uses ANI (Automatic Number Identification) to verify the identity of the customer and the purchases they make 14

 Millicent is a micropayment technology provider  Companies

using Millicent payment technology allow customers to make micropayments using credit or debit cards, prepaid purchasing cards or by adding purchases to a monthly Internet Service Provider bill or phone bill  Millicent handles all payment processing needed for the operation of an e­business, customer support and distribution services

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 Business­to­business (B2B) transactions  

Fastest growing sector of e­commerce payments Payments are often larger than B2C transactions and involve complex business accounting systems

 PaymentechTM  

Payment solution provider for Internet point­of­sale transactions Electronic merchants choose from transaction­ processing options including debit cards, credit cards, checks and EBT authorization and settlement

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 eCredit

provides real­time, credit­transaction capabilities of B2B size  Clareon facilitates B2B transactions by providing digital payment and settlement services 



Payment is digitally signed, secured and authenticated via digital payment authentication (DPA) Compatible with all enterprise resource planning (ERP) systems and can adapt electronic records for companies, banks and each member of a given transaction 17

 Electronic

consolidation and reconciliation of the business transaction process 

Companies can keep track of a transaction from order-to-cash settlement while reducing administrative costs, errors, waste and complexity in the supply chain

 Order-fulfillment 

providers

Companies attempting to bring supply chain expertise and logistical services to Internet businesses

 Internet-based

electronic B2B transactions will augment, but not replace, traditional Electronic Data Interchange (EDI) systems 18

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 Provides

a global B2B e-commerce infrastructure 

Cross-border data management and payment

 Buyer

creates pre-formatted electronic purchase order and presents document to seller  Purchase order data stored electronically in TradeCard database, and electronic invoices and packing slips are produced from data  Uses a patented "data compliance engine" to check documents against original purchase order 

If discrepancies are found, concerned parties are notified immediately and can negotiate to resolve the conflict 20

 TradeCard

awaits delivery confirmation from a third­party logistics services provider (3PL) 

Industry terminology for a shipping company

 When

confirmation is received and compliance met, TradeCard completes the financial transaction by sending request for payment to the buyer’s financial institution  TradeCard enables large­scale and large­dollar commerce without credit­card payment through direct interaction with existing financial institutions

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 Electronic

Bill Presentment and Payment (EBPP)

Offers ability to present a company’s bill on multiple platforms online and actual payment processes  Payments are generally electronic transfers from consumer checking accounts, conducted through the ACH (Automated Clearing House) 





Current method for processing electronic monetary transfers

Paytrust 





Users send bills directly to Paytrust which scans them and places them online E-mails customers about newly arrived bills and payment-due dates Makes automatic payments on any bill up to a threshold amount

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 Services to enable EBPP on a company’s site 

Derivion 





Provides billers with electronic capabilities in conjunction with Paytrust’s service Offers billing companies the technology and expertise needed to transfer from paper to electronic billing through iNetBillerSM

Encirq 



Partners with banks that issue credit cards, presenting the consumer with an illuminated statement (interactive statement, placing special offers from retail merchants to correspond with the itemized charges on a credit­card statement) Builds highly specific consumer profiles each time charges is received

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 CheckFree is a consolidation service 

Can service any biller and present consumers with all their bills in one interactive online environment

 If the company or person you wish to pay does not

offer electronic billing, you can still set up payment to them from any bank account using the pay everyone service  For billers, the e­billing option adds convenience and lower costs  All payments and outstanding bills can be tracked online and consumers have interactive access to their entire payment histories 24

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