E-Business Installment Frameworks.


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Records made by keeping trusts into a record and from which ... Accounts that aggregate uses and to which shoppers make intermittent installments ...
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E-Commerce Payment Systems .

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Topics The E-Commerce environment Traditional installment frameworks Online installment with Visas Online installment with SET Other online installment frameworks B2C and B2B

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Internet Fraud Complaints Reported to the IFCC (2004)

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Online Credit Card Purchases are Risky for the Merchant Many security techniques that Visa organizations depend on are not material in online environment (CNP). Dealer pays when products are not conveyed, request is questioned or in instances of Mastercard extortion. Rate of Internet exchanges charged back to online dealers much higher than for customary retailers (3-10% contrasted with ½-1%) To ensure selves, dealers can: Refuse to prepare abroad buys Insist that Visa and transporting address match Require clients to data 3-digit security code imprinted on back of card

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Customer and Merchant Views

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E-Commerce Transaction

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Points of Vulnerability

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E-Commerce Availability Digital Divide: Some gatherings don\'t have same access to PCs and Internet that others do Digital "the less wealthy" include: Households with livelihoods underneath $35,000 Those without school trainings People living in provincial territories African-Americans and Hispanics Seniors more than 65 Disabled Most late Department of Commerce study - the vast majority of above gatherings accessing PCs and Internet because of falling PC costs and free or minimal effort ISPs

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Traditional Payment Systems Cash Checking Transfer Credit Card Stored Value Accumulating Balance

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Cash Legal delicate characterized by a national power to speak to esteem Most normal type of installment as far as number of exchanges Instantly convertible into different types of quality without intermediation of any sort Portable, requires no confirmation, and gives moment buying influence "Free" (no exchange expense), unknown, low psychological requests Limitations: effortlessly stolen, restricted to littler exchange, does not give any buoy

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Checking Transfer Funds exchanged straightforwardly by means of a marked draft or check from a shopper\'s financial records to a shipper or other individual Most basic type of installment as far as sum spend Can be utilized for both little and expansive exchanges Some buoy Not mysterious, require outsider intercession (banks) Introduce security dangers for traders (fabrications, ceased installments), so validation regularly required

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Credit Card Represents a record that stretches out credit to buyers, allowing buyers to buy things while conceding installment, and permits buyers to make installments to various sellers at one time Credit card affiliations – Nonprofit affiliations (Visa, MasterCard) set measures for issuing banks Issuing banks – Issue cards and process exchanges Processing focuses (clearinghouses) – Handle check of records and adjusts

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Stored Value Accounts made by keeping reserves into a record and from which assets are paid out or pulled back as required Examples: Debit cards, blessing testaments, prepaid cards, savvy cards Debit cards: Immediately charge a checking or other interest store account Online Peer-to-associate installment frameworks, for example, PayPal

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Accumulating Value Accounts that collect uses and to which buyers make occasional installments Examples: utility, telephone, American Express records

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Most Common by Number of Transactions

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Most Common by Dollar Amount

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Payment Systems Characteristics

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Online Payment Systems Credit cards are overwhelming type of online installment, representing around 80% of online installments in 2002 New types of electronic installment include: Digital money Online put away esteem frameworks Digital aggregating parity installment frameworks Digital credit accounts Digital checking

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Actual and Preferred

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Online Credit Card Use Processed similarly that in-store buys are Major distinction is that online vendors don\'t see or take impression of card, and no mark is accessible (Cardholder Not Present exchanges) Participants incorporate purchaser, shipper, clearinghouse, trader bank (obtaining bank) and purchaser\'s card issuing bank

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Online Credit Card Use

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Problems with Online CC Use Security – Neither shipper nor buyer are verified. Vendor gets customers charge card number for conceivable later abuse. Fetched – for shippers, around 3.5% of price tag in addition to exchange expense of 20-30 pennies for every exchange Social value – numerous individuals don\'t have entry to charge cards (youthful grown-ups, in addition to just about 100 million other grown-up Americans who can\'t manage the cost of cards or are viewed as poor danger)

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SET (Secure Electronic Transaction) Protocol Developed to address lacks in online Visa use. Open standard created by MasterCard and Visa. Confirms cardholder and shipper personality through utilization of computerized declarations. Exchange process like standard online charge card exchange, with character check. Up to this point, has not got on much, because of costs included in coordinating SET into existing frameworks, and absence of enthusiasm among purchasers

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SET at Work SET uses SSL and PKI. Client must have a SET empowered program and trader needs SET empowered server. Purchaser\'s charge card issuing bank issues a computerized endorsement (electronic wallet) with shopper\'s open key and bank\'s open key (marked with bank\'s private key). Traders get a comparative computerized endorsement from bank.

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SET at Work: Step 1 Customer puts in online request: C\'s program gets M\'s testament and accepts it. C\'s program sends the request message which is encoded with M\'s open key and contains: request data for Merchant, C\'s advanced endorsement and installment (charge card) information which is scrambled with the bank\'s open key so M can\'t read it. The installment information contains an exchange ID (initially from M) so it must be utilized with this specific request (no replay assault).

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SET: Step 2 and 3 The Merchant checks C\'s computerized endorsement. The Merchant sends to the bank Order data Payment information from C which M can\'t read M\'s testament Bank confirms message, handles cash exchange and sends marked approval to shipper who can then process the request.

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SET Transactions

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Other Online Payment Systems Digital Wallets

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Digital Wallets Concept of computerized wallet important to large portions of the new advanced installment frameworks. Looks to copy the usefulness of conventional wallet. Most essential capacities: Authenticate shopper through utilization of computerized testaments or other encryption techniques Store and exchange esteem Secure installment process from purchaser to shipper Two noteworthy classifications: Client-based advanced wallets – Gator.com , MasterCard Wallet Server-based advanced wallets – MSN Wallet

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Digital Cash One of the principal types of option installment frameworks Not generally "money" – rather, type of worth stockpiling and esteem trade that have constrained convertibility into different types of quality, and oblige delegates to change over. A significant number of early samples have vanished; ideas get by as a component of P2P installment frameworks.

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Early Digital Cash

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PayPal One of e-business\' significant examples of overcoming adversity: Went open in 2002; gained by eBay October 2002 for $1.5 billion A "shared" installment framework utilizing email. Fills a specialty that Visa organizations stayed away from – people and little dealers Piggybacks on existing charge card and checking installment frameworks Weakness: experiences moderately large amounts of misrepresentation PayPal has more than 35 million record individuals and is accessible to clients in 38 nations around the globe

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Online Stored Value Accounts Debit cards online Permit buyers to make moment, online installments to traders and different people in view of quality put away in an online record Rely on worth put away in a purchaser\'s bank, checking or Visa account

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Ecount.com

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Digital Accumulating Balance Accounts Allows clients to make micropayments and buys on the Web, collecting a charge equalization for which they are charged toward the end of the month Examples: Qpass and iPin

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Digital Credit Card Credit represent internet shopping. Concentrate particularly on making utilization of Mastercards more secure and more advantageous for online vendors and shoppers. Illustration: eCharge and CyberCash (Verisign 2002) Customer has credit account however no physical card.

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Digital Credit Card

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Digital Checking Takes point of interest of substantial, existing foundation for check handling when utilized as internet shopping installment device. Illustrations: eCheck, Achex (MoneyZap)

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Digital Checking: ECheck

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B2B Payment Systems More unpredictable than B2C. Verification and honesty imperative as exchange might be managing substantial aggregates of cash. Should be fixing to lawfully tying contracts. Interface with bookkeeping frameworks Should give standard business credit as in two 10 net 30

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