The Payments System. Ecommerce.

An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as Electronic Data Interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking. The smooth operation of payment systems is often taken for granted both in the academic literature on financial integration and in practical policy considerations. In general, the main role of payment system regulators is to provide a level playing field for different service providers. To secure dynamic efficiency, the regulators also need to ensure adequate incentives for innovation and investment. In this respect, it is important that they do not take too restrictive an attitude towards cooperation among payment service providers.

Over the years, credit cards have become one of the most common forms of payment for e-commerce transactions. In North America almost 90% of online B2C transactions were made with this payment type. It would be difficult for an online retailer to operate without supporting credit and debit cards due to its widespread use. Increased security measures such as the use of the card verification number (CVN) which detects fraud by comparing the verification number on the printed on the signature strip on the back of the card with the information on file with the cardholder’s issuing bank. Also online merchants have to comply with stringent rules stipulated by the credit and debit card issuers (Visa and Mastercard) this means that merchants must have security protocol and procedures in place to ensure transactions are more secure. This can also include having a certificate from an authorised certification authority (CA) who provides PKI infrastructure for securing credit and debit card transactions.

Despite this widespread use in North America, there are still a large number of countries such as China, India and Pakistan that have some problems to overcome in regard to credit card security. In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash which transfers from the consumers’ card to the sellers’ device. A popular smartcard initiative is the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card from your bank account, and you can then use your card at various retailers and on the internet.

Payment systems should allow quick and safe transactions. Otherwise our daily lives would be affected very seriously, we should go to the bank every time we wanted to make a payment, would bring stacks of coins and bills, and lose time queuing to do things that could be solved with a credit card with a simple click on the computer. Since the provision of payment services also has many special characteristics, the regulatory tools commonly used in many other network industries cannot be applied directly. An e-commerce payment system facilitates the acceptance of electronic payment for online transactions.

SSL: The SSL protocol combines symmetric encryption systems and asymmetric encryption systems. SET: Mastercard and Visa developed SEPP (Secure Electronic Payment Protocol) and STT (Secure Transaction Technology) to ensure the economic transactions exclusively using credit cards as payment, although later both entities, with American Express, agreed to join efforts to develop a single protocol for electronic payment cards, called SET. The SET protocol (Secure Electronic Transaction) is a set of rules or safety specifications which are a standard way to perform payment transactions through the Internet. 3D Secure or 3 Domain Secure: has been developed by Visa to verify that the buyer is entitled to use the credit card. It gives to the buyer and to the seller greater certainty in electronic transactions. Its trade name is Verified by Visa. This protocol prevents the fraudulent use of credit cards through the Internet.

The author is a software engineer, expert in e-commerce. He has written interesting articles regarding ipn script and ipn php topics.

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