E-Commerce Applications E-payment

Transcription

1 E-Commerce Applications E-payment Session 3 1 Overview Payment process Credit card payment online Payment systems Risks and challenges Chargeback Internet fraud Session 3 2 E-commerce overview Buying and selling of goods and services over electronic networks. customer WWW Delivery logistics e-shop site business Payment system Online Catalogue Currency Tax models Shipping Checkout Exceptions And then: Inventory, accounts, Fulfilment, Customer Service, Marketing, Measuring success Session 3 3 1

2 Payment: Customer point of view Browser or search for products and fill basket Completes order form Choose payment method/credit card. Notes that order taken in secure environment and protected by digital certificate Places Order Receives confirmation of order Receives receipt of payment Session 3 4 Payment: Business point of view Business owners/retailers point of view Customer places order Note: the customer receives confirmation of order which has been edited/configured by retailer Retailer gets confirming order has come in. Retailer logs on to Administration site to collect order and payment details E-payment supplier request merchant services providers to send funds to retailer s bank account Session 3 5 Payment systems Fundamentals take money, anyway that suits the customer manage risk of fraud and chargeback Options Credit Card manual processing, or online processing Digital Cash Micropayments Smart cards Payment of delivery Direct money transfer Session 3 6 2

3 Credit card payment online Actors involved: Customer E-shop owner (business) might be merchant Card issuing bank Merchant service providers Web agency (ASP) Regulatory bodies Session 3 7 Online Credit Card Payment Card Issuing bank Account settlement order Customer/shopper Payment details $ $ Acquiring bank e-shop site Payment details Merchant service provider Payment details E-payment gateway e.g. Worldpay Session 3 8 E-Payment Suppliers Merchant services CNP (card not present), PDQ/ePDQ Business plan/prediction of sales Deposit to cover fraudulent activities Authorisation Gateways WorldPay, SecPay, Netbanx, etc. Authorisation Gateway checks: Checks account number is valid and sufficient credit. Check account name and address (recent). Still a problem if goods delivered to address other than one on the card. Merchant carries all the risk. Session 3 9 3

4 WorldPay Checks card validity Checks account credit balance Authorises transaction Transfers payment information directly to VISA and other cards who make the transfer from customer s account to retailers Don t need existing merchant services agreement Well evaluate business plan in detail Ideal for start up Internet businesses Session 3 10 SecPay For businesses with existing merchant accounts with NetWest, Barclays, Bank of Scotland, HSBC and Amex Apply for on-line account number Charge to set up the account (+VAT) Extra transaction cost Session 3 11 E-payment: Risks and Challenges Unique benefits speed convenience, privacy, relative anonymity Challenges Increase Chargeback Legal Risks Internet fraud Product returns Card not present or mail order/telephone order rules apply: If goods bought with stolen card, even if obtained authorisation from issuer merchant is 100% responsible for refunding and the chargeback!! Session

5 Chargeback WorldPay Chargeback Customer/Card Holder Card Issuing bank NatWest Worldpay e-shop site Card issuer identifies disputed transaction and issues request for information WorldPay (for example) contacts the E-shop If the claim is proved issuer raises a chargeback with cannot be reversed Session 3 13 Risk: reasons for chargeback Card holder: did not receive goods returned them states did not authorise transaction states did not participate in transaction stares that paid by other means Claims received defective merchandise Claims goods did not arrive Card expired, accepted before valid, incorrect card number Session 3 14 Risks: chargeback burden Chargeback applies: Up to 6 months after transaction If merchants does not have have: Signature or proof of receipt or mail confirmation of order If any part of the order tracking documentation is incomplete, inaccurate, or not delivered with in a required time limit Session

6 Internet Fraud Stolen Cards used before owner detects it missing Identity Fraud where thieves assume identity of owner and use the advantage of anonymity on the Internet Card Generators where fraudulent credit card numbers are generated using software programs Post-Purchase Ship To charges after valid transaction Session 3 16 Summary Payment process Credit card payment online Payment systems Risks and challenges Chargeback Internet fraud Session