1. Chapter 13 Paying Via The Net

2. Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment

3. Digital Payment Requirements Acceptability Anonymity: privacy & untraceability Convertibility Efficiency Flexibility Integration Availability

4. Digital Payment Requirements Reliability Scalability Security Integrity Authentication Usability

5. Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment

6. Fraud Detection Methods Products

7. Methods Checksum for credit card no. Verify the credit card no. and expiration date with card issuer Check postal address with online services Confirmation with e-mail address Digital certificates for non-repudiation Predefined purchase limits each time and per week

8. Methods Confirmation web page for terms and conditions Data base with credit card no., e-mail address, and phone no. Document the complete online transactions Trustworthy logistics partner Unique key for online shipping digital merchandise

9. Methods Business rules for checking suspicious orders and credit card no.

10. Products Fraud Shield by ClearCommerce Visa

11. Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment

12. Online Payment Methods Pre-paid –Electronic cash systems –Smart cards Instant-paid –Debit cards Post-paid –Credit cards –Invoices –Internet cheques –Cash on delivery

13. Electronic cash systems Saving digital money to the hard disk or floppy disk Pros & cons –Anonymity –Security with encryption and digital signature –Splitting value –Internet usage only –Easy to lose –No anonymity with physical delivery –No open standard

14. Electronic cash systems Products –DigiCash –NetCash –CyberCoins –IBM micro payment –MilliCent

15. Smart Card Embedded chips with encrypted digital money Pros and cons –Use password to ensure the security –Cyber and real usage –Low transaction cost –No open standard

16. Smart Card Types –Health Care –Phone –Debit Products –Mondex –VisaCash

17. Instant-paid Debit cards Pros and cons –Access to bank’s database –Less fraud & error –High security –Complicated –Need hardware & software –Signature through fax –High communication costs

18. Instant-paid Product –Direct Debit

19. Credit Cards Four players: customer, merchant, issuer and acquirer Pros & cons –International –Low security –High transaction cost –Fraud

20. Credit Cards Security standards Secure Socket Layer (SSL) –By Netscape –Encrypt traffic between the web browser and web server Secure Electronic Transaction (SET) –By Visa and MasterCard –Public key encryption using digital certificates for both buyer and seller

21. Credit Cards Security standards SET features –High security –Low visibility –Standards –Non-repudiation Chip-secured Secure Electronic Transaction C- SET –Use chip card for any network devices –Reduce cost and complexity for merchant

22. Invoices Business-to-business Usage reasons –High volume transaction –No need to reorganize the old process –Low transaction fee

23. Internet Cheques Electronic cheques Pros and cons –Require payer’s digital signature –Special software & network –Less manual steps Systems –echeck by US Department of the Treasury

24. Cash on Delivery (COD) Pros and cons –Require logistics party –More expensive –Extra cost paid by customer

25. Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment

26. Online Payment Types Micro payments –Less than $5 –Electronic cash transaction Consumer payments –Between &5 and $500 –Credit card transactions Business payments –Over $500 –Direct debit or invoice transaction

27. Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment

28. Projects –Secure Electronic Marketplace for Europe (SEMPER) –The Open Trading Protocol (OTP) –Open Buying on the Internet –Global Trust Enterprise Goal –Internet payment infrastructure to achieve the digital payment requirements

29. Points to Remember Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment