Professional Documents
Culture Documents
E Payment
E Payment
E Payment
Objectives
To introduce the basic methods of electronic payment Reference: Deital Ch. 4
2001
Daniel L. Silver
Outline
Trandition Payment Methods E-Payment Methods
2001
Daniel L. Silver
Client 2
Browser
HTTP Server
App. Server
Database Server
URL index.html
Server B
2001
prog1.class prog2.jsp
Bank Server
Daniel L. Silver 4
Attacks
2001
on traditional methods?
Daniel L. Silver 6
Credit Cards
A very common method of payment Cards are issued by a bank Unique 16-digit number (including check digits) and an expiration date Third party authorization companies verify purchases
2001
Daniel L. Silver
4. Payment
Customer
CARD
3rd Party Customer EFT Authorization EFT Bank System System (Visa) Card Info, Signature
Request 56k bps modem
Authorization
Authorization Program
Daniel L. Silver
Enable an honest customer to convince a seller to accept payment Prevent a dishonest customer from making unauthorized or fraudulent payments Ensure the privacy of honest participants Scalable to very large numbers of customers Integrate with existing and evolving systems NOT EASY!
Daniel L. Silver 10
2001
E-Payment Pros/Cons
Pros:
Potential for great flexibility Low transaction costs Rapid and diverse purchase power
Cons:
Perfect copying of transactions is possible Vulnerability to world-wide attack Lack of anonymity, potential for privacy intrusion
2001
Daniel L. Silver
11
Internet
Client 1 Browser
2001
URL
Daniel L. Silver
index.html
prog.jsp
13
A major problem for E-commerce The merchant has no legal proof of purchase unless the buyer uses authentication certificate Companys such as Visa, nochargeback.com and CyberCash (now VeriSign) are working to limit fraud:
Visa has established high risk business models and best practices info for merchants Nochargeback.com has lists of fraudlent cards, e-mail addresses and postal addresses VeriSign/CyberCash has employed AI to catch frauders
2001
Daniel L. Silver
14
Digital Currency
Digital cash accounts like traditional bank accounts Buyers deposit cash in the account and spend it at E-Commerce sites (acct # is passed using secure proprietary protocol) E-Comm merchants can feel sure of payment Customers do not need a credit card and spending is limited to account balance www.ecash.com
Daniel L. Silver 15
2001
E-Wallets
Established by financial institutions in partnership with member E-Commerce sites Allows customer to submit billing and shipping info with one click at member sites Also can store e-Cheques, e-Cash and credit card information Not as popular as originally projected Entrypoints InfoGate offers an e-wallet
Peer-to-Peer Methods
There is also a request payment method FOR FREE .. ? What is the their business model ?
2001 Daniel L. Silver 17
Smart Cards
Cards with computer chips embedded on their faces very common in Europe Used for health care, transportation, ID, retail, pay phones, loyalty programs, banking machines Smart card readers interface with card and request user PIN for access Bank machines can load cards with cash and then merchants can download cash from card Returns anonymity of purchase to customer GemPlus, MasterCard are leading supplier of SCs
Daniel L. Silver 18
2001
Micro-Payments
Long distance phone call charge is an example of a micro-payment Digital Equipment Corporatiion (DEC) researchers originally envisioned MPs:
Payment per newspaper article ($0.005) Payment by stock quote ($0.001) Payment per click (Qpass, Inc)
Has not been popular, instead advertisers pay for info, or customers pay flat rates Why?
Daniel L. Silver 19
2001
B2B
B2B transactions are the fastest area of $ growth on the web B2B transactions are substantially larger than B2C Paymantech is major provider:
24/7 availability, all manner of EFT supported many management tools and reporting methods
Ecredit.com offers real-time automated credit approval and financing TradeCard offers comprehensive B2B Ecommerce facilities on an international scale
Daniel L. Silver 21
2001
THE END
danny.silver@acadiau.ca