Bài giảng E-Business and e-Commerce - Chapter 4: Online Monetary Transactions

Chapter 4, Online Monetary TransactionsOutline4.1 Introduction4.2 Credit-Card Transactions 4.2.1 Anatomy of a Credit-Card Transaction 4.2.2 Credit-Card Transaction Enablers4.3 Online Credit-Card Fraud4.4 Digital Currency4.5 E-Wallets4.6 Alternate Consumer Payment Options4.7 Peer-To-Peer Payment4.8 Smart Cards4.9 Micropayments4.10 Business-To-Business (B2B) Transactions4.11 E-Billing4.12 Developing Payment Standards 4.1 IntroductionSecure 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 enablers4.2 Credit-Card TransactionsPopular form of payment for online purchases Resistance due to security concernsMany cards offer capabilities for online and offline purchasesProdigy Internet MastercardAmerican Express Blue4.2 American Express: Enabling Secure Payments on the WebSmall business transactionsBlue for BusinessBlue allows business owners to carry a balance and conduct secure online and offline transactions American Express Purchase Protection Program Protects buyers against damaged goods Buyers Assurance Plan Offers an extended warranty on purchases made with the Blue card Online WalletSMExpressFormSMAutobuySM4.2 American Express: Enabling Secure Payments on the WebPrivate PaymentsProvides a unique account number for each individual purchase American Express @ WorkSM Facilitates larger corporations with enhanced integration technologiesOnline Program Management Allows corporations to manage the corporate accounts of a large number of employees 4.2.1 Anatomy of an Online Credit-Card TransactionTo accept credit-card payments, a merchant must have a merchant account Traditional merchant accounts accept only POS (point-of-sale) transactionsTransactions that occur when you present your credit card at a store Card-not-present (CNP) transactionMerchant does not see actual card being used in the purchase AuthenticationThe person is, in fact, who they say they are 4.2.1 Anatomy of an Online Credit-Card TransactionAuthorizationThe money is available to complete the transaction Acquiring bank The bank with which the merchant holds an account Issuing bankThe bank from which the buyer obtained the credit card, and the credit-card association VerificationMoney issued to merchant after product/service is distributed4.2.1 Anatomy of an Online Credit-Card TransactionStep 1Consumer makes a purchase at an online store, credit card information received by e-storeStep 2Credit card information is sent from the merchant to the acquiring bankStep 3 and Step 4The credit card association and the issuing bank certify the transaction and the verification is sent to the acquiring bankStep 5The merchant ships the product and payment is issued4.2.2 Credit-Card Transaction EnablersCredit-Card Transaction EnablersCompanies that have established business relationships with financial institutions that will accept online credit-card payments for merchant clients iCatTrintechCybercashNextCard, Inc. 4.2.2 CyberCash FeatureEnables businesses to receive payments through InternetCashRegisterMakes it possible for merchants to receive credit-card numbers, offer the numbers to the appropriate financial institution for validation and accept credit-card payments in a secure environment over the WebEstablishes direct connection between its servers and the Web sites of its e-business customersCustomer enters credit-card and shipping informationInformation sent to CyberCash for validation, once validation is received, purchase can be completed and funds are transferred electronically from customer accounts to merchant’s account4.2.2 CyberCash FeatureCyberCash Instabuy allows customers to store their purchasing information in an Instabuy e-walletAn e-wallet electronically stores purchasing informationUsing redundant servers, or identical servers for back up if one server fails, CyberCash is able to minimize downtimeCashRegister keeps track of transactionsAll financial information transmitted via the Internet is encrypted and digitally signed CyberCash offers fraud detection to protect merchants4.2.2 CyberCash FeatureCyberCash FraudPatrol. (Courtesy of CyberCash™, Inc.CyberCash is a registered trademark of CyberCash Inc., in the United States and other countries.)4.3 Online Credit-Card FraudChargebackWhen 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 merchantVisaHigh-risk business models“Best Practices”MastercardUses the three digit pin code on the back of the card 4.4 Digital CurrencyDigital cash Stored electronically, used to make online electronic paymentsSimilar to traditional bank accountsUsed with other payment technologies (digital wallets) Alleviates some security fears online credit-card transactionsAllows those with no credit cards to shop onlineMerchants accepting digital-cash payments avoid credit-card transaction feeseCash Technologies, Inc. is a secure digital-cash provider that allows you to withdraw funds from your traditional bank account4.4 Digital CurrencyGift 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 WebFlooz Points-based rewards Points are acquired for completing specified tasks including visiting Web sites, registering or buying productsPoints can then be redeemedBeenz4.4 Digital CurrencyUsing eCash on the Web. (Courtesy of eCash Technologies, Inc.and ©2000 eCash.)4.5 E-WalletsE-walletsKeep track of your billing and shipping information so that it can be entered with one click at participating sitesStore e-checks, e-cash and credit-card informationCredit-card companies offer a variety of e-wallets Visa e-wallets MBNA e-wallet allows one-click shopping at member sitesEntrypoint.com offers a personalized desktop toolbar that includes an e-walletA group of e-wallet vendors have standardized technology with Electronic Commerce Modeling Language (ECML) 4.6 Alternate Consumer Payment OptionsChecks or money orders through the mailCash on delivery (COD)Debit cards Offer an alternative for card-holders to access their accountsFunds are instantly deducted from checking accountCan withdraw cash from Automatic Teller Machines (ATMs)Checking-account numbers Companies such as AmeriNet allow merchants to accept checking-account numbers as a valid form of paymentAmeriNet provides authorization, account settlement, distribution and shipping (fulfillment) and customer service inquiries4.6 Alternate Consumer Payment OptionsEntryPoint Internet Toolbar. (Courtesy of EntryPoint. Inc.)4.7 Peer-To-Peer PaymentsPeer-to-peer transactions Allow online monetary transfers between consumers eCash allows the transfer of digital cash via e-mail between two people who have accounts at eCash-enabled banks PayPal offers X paymentsAllows user to send money to anyone with an e-mail addressCan be used to enable credit-card payment for auction items in real time (the transaction begins processing immediately after it is initiated), reducing the risk of fraud or overdrawn accountsBillPointAllows buyers to submit electronic payments to sellers’ checking accountsTradesafe.com (larger transactions, B2B)4.8 Smart CardsSmart cardCard with computer chip embedded on its face, holds more information than ordinary credit card with magnetic stripContact smart cardsTo read information on smart cards and update information, contact smart cards need to be placed in a smart card readerContactless smart cards Have both a coiled antenna and a computer chip inside, enabling the cards to transmit informationCan require the user to have a password, giving the smart card a security advantage over credit cardsInformation can be designated as "read only" or as "no access" Possibility of personal identity theft4.9 MicropaymentsMerchants pay fee for each credit-card transaction MicropaymentsPayments that generally do not exceed $10, allows companies offering nominally priced products to profitTo offer micropayments, some companies form strategic partnerships with utility companies eCharge enables companies to offer this option to customerseCharge uses ANI (Automatic Number Identification) to verify the identity of the customer and the purchases they makeOutsource payment-management systems (Qpass)4.9 Millicent FeatureMillicent 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 e-business, customer support and distribution services4.10 Business-to-Business (B2B) TransactionsBusiness-to-business (B2B) transactionsFastest growing sector of e-commerce payments Payments are often larger than B2C transactions and involve complex business accounting systemsPaymentechTM Payment solution provider for Internet point-of-sale transactionsBrick-and-mortar and electronic merchants choose from transaction-processing options including debit cards, credit cards, checks and EBT authorization and settlementEBT (Electronic Benefits Transfer) Defined by the USDA as the electronic transfer of government funds to retailers for the benefit of the needy4.10 Business-to-Business (B2B) TransactionseCredit provides real-time, credit-transaction capabilities of B2B sizeClareon facilitates B2B transactions by providing digital payment and settlement servicesPayment 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 4.10 Business-to-Business (B2B) TransactionsElectronic consolidation and reconciliation of the business transaction processCompanies can keep track of a transaction from order-to-cash settlement while reducing administrative costs, errors, waste and complexity in the supply chain eTime CapitalOrder-fulfillment providersCompanies 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) systems4.10 Business-to-Business (B2B) TransactionsPAYTRUST SmartBalance™ screen shot. (Courtesy of Paytrust, Inc.) 4.10 TradeCard FeatureProvides a global B2B e-commerce infrastructure Cross-border data management and paymentBuyer 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 dataUses a patented "data compliance engine" to check documents against original purchase orderIf discrepancies are found, concerned parties are notified immediately and can negotiate to resolve the conflict4.10 TradeCard FeatureTradeCard awaits delivery confirmation from a third-party logistics services provider (3PL)Industry terminology for a shipping companyWhen confirmation is received and compliance met, TradeCard completes the financial transaction by sending request for payment to the buyer’s financial institutionTradeCard enables large-scale and large-dollar commerce without credit-card payment through direct interaction with existing financial institutions 4.10 TradeCard Feature4.11 E-BillingElectronic Bill Presentment and Payment (EBPP) Offers ability to present a company’s bill on multiple platforms online and actual payment processesPayments 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 datesMakes automatic payments on any bill up to a threshold amount4.11 E-BillingServices to enable EBPP on a company’s siteDerivion Provides billers with electronic capabilities in conjunction with Paytrust’s serviceOffers 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 credit-card statement)  Builds highly specific consumer profiles each time charges is received4.11 CheckFree FeatureCheckFree is a consolidation service Can service any biller and present consumers with all their bills in one interactive online environmentIf 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 serviceFor billers, the e-billing option adds convenience and lower costsAll payments and outstanding bills can be tracked online and consumers have interactive access to their entire payment histories4.12 Developing Payment StandardsEssential to the success of e-commerce Businesses offering domestic and international services must have assurance that payment will be received, that it is secure and that it is valid Open Financial Exchange (OFX) Developed and presented by Intuit, Microsoft and Checkfree in 1997 To serve as a standard mechanism for the exchange of financial information 4.12 Jalda FeatureDeveloped by EricssonAn open standard online payment system that connects content providers (anyone selling a good or service on the Internet) with an Internet Payment Provider (IPP) Accommodates transactions involving small feesPurchases can be made through the Web and using wireless devicesA PIN code authorizes the transaction