Payment Gateway Solutions Jaipur


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Online Payment: Issues and Solutions:

Online Payment: Issues and Solutions 1 S.M.O.K.E TECHNOLOGIES

What is Electronic Payment?:

What is Electronic Payment? Is a system that permits online payment between parties using an electronic surrogate of a financial tender The electronic surrogate is backed by financial institutions and/or trusted intermediaries The intent is to act as an alternative form of payment to the physical cash, cheque or other financial tender 2 S.M.O.K.E TECHNOLOGIES

Current Status:

Current Status ePayment opportunities are growing albeit slowly New players are entering ePayment marketplace Variety of ePayment mechanisms and devices - creating state of chaos Infrastructure for ePayment is complex and expensive to deploy Lack of critical mass adoption and acceptance Online payment is hard to implement globally 3 S.M.O.K.E TECHNOLOGIES

ePayment is still evolving ...:

ePayment is still evolving ... New ePayment Solutions Security Infrastructure Business Realities Authentication Models Spa Customer Profiles Payment Types 4 S.M.O.K.E TECHNOLOGIES

ePayment Channels:

ePayment Channels Defined as ‘touch points’ where a payment transaction is originated or initiated Can be executed through a variety of channels Internet based Kiosks Contactless or proximity sensors Mobile eg mobile phones, PDA 5 S.M.O.K.E TECHNOLOGIES

ePayment Instruments:

ePayment Instruments Defined as the medium in which the value is recognised in a payment transaction Card-based such as Credit and charge cards buy now, pay later Debit cards buy now, pay now Cash cards, stored-valued, e-cash buy now, prepaid or pay before 6 S.M.O.K.E TECHNOLOGIES

Credit Cards:

Credit Cards Most widely used banks able to leverage existing card infrastructure appears ‘defacto’ online payment Largely unencrypted ‘card-not-present’ transactions processed without customer & merchant authentication Charge back risk for merchants charge-back is when customer demands a refund banks transfer liabilities of charge-backs to the merchants merchants need to have a bond to cover such charges 7 S.M.O.K.E TECHNOLOGIES

Debit Cards:

Debit Cards Direct electronic transfer of account - direct account debiting Uses chip/smart eWallets Digital signature to secure access Connected to eBanking solution 8 S.M.O.K.E TECHNOLOGIES

Digital Cash:

Digital Cash A system of purchasing cash and storing the credits in consumer’s computer Computerised stored value is used as a form of cash to be spent in small increments A third party is involved in the payment transactions Examples: Beenz, Billpoint, Paypal 9 S.M.O.K.E TECHNOLOGIES


Cazh A project by ABN-Amro A debit system that creates network between merchant and bank to allow customers pay for the goods by direct debit of customers’ bank account Once customer has been authenticated by his/her bank, he/she can authorise the bank to pay the merchant on the goods purchase Similar to Nets POS but in cyberspace 10 S.M.O.K.E TECHNOLOGIES

Cash Card:

Cash Card Payment solution on a proprietary protocol that allows payment over the Internet A digital/virtual wallet with prepaid credit-based/token-based payment system Enables low-value electronic payments on the Internet Limited distribution, proprietary solutions Needs to install card reader and download free eWallet 11 S.M.O.K.E TECHNOLOGIES


eCheque A formatted email message that consists of payee name, amount, payment date, payer’s account number, and payer’s bank Digital certificate and signature are used to secure the cheque so that the contents are not tampered with A signed electronic cheque is exchanged between the parties’ financial institutions through automated clearing house 12 S.M.O.K.E TECHNOLOGIES

Mobile Wallet:

Mobile Wallet Relatively new space exploited by telcos and non-financial enterprises Provides ePurse functionality to replace card-type payments Aggregating micro-payments onto the mobile phone bill Can use mobile access device to authenticate payer’s identity SIM card well placed to function and control payment process and authentication 13 S.M.O.K.E TECHNOLOGIES

Components of Online Payment System:

Components of Online Payment System Online Merchants Consumer Payment Clearinghouses Payment Enablers Payment Gateways Merchant Acquirers Shopping Cart Vendors Non-bank payment Processors Competing Authentication Services                           14 S.M.O.K.E TECHNOLOGIES

ePayment Risks:

ePayment Risks Internet Private network Internet Bank network Use of stolen card Credit card number or password stolen from computer Unauthorised access Information modified in transit Payment info stolen from merchant Masquerading as legitimate merchant Key info stolen by merchant staff Information modified in transit Information stolen Buyer Merchant Payment gateway 15 S.M.O.K.E TECHNOLOGIES

PowerPoint Presentation:

60% of non-buyers said “credit card security ,” the highest factor cited. Factors that would convert non-buyers to buyers online? Odyssey, 2000 58% of new Internet users said “ better security ,” the 3 rd highest factor cited. Factors that would motivate new users to purchase online? Jupiter Research, May 2000 68% of Internet users said “ hackers getting credit card number ,” 2 nd highest concern cited Worries and concerns regarding online activities? Pew Internet & Am Life Project, June 2000 47% of Internet users said “ credit card security ,” the 3 rd highest barrier cited. Barriers to online purchasing? Greenfield Online, 2000 79% of Internet users said “ credit card security ,” the number one cited barrier. Barriers to online purchasing? Pricewaterhouse Coopers, 2000 85% of online shoppers said “ secure transactions ,” the highest cited feature. Important features of online shopping sites? Cyber Dialogue, 2000 88% of online shoppers said “ guaranteed credit card security ”, 2 nd highest feature cited. Features that will increase the likelihood to buy online? Odyssey, 2000 Results Question Asked Survey By Research on online shopping 16 S.M.O.K.E TECHNOLOGIES

How can we secure ePayment?:

How can we secure ePayment? The Trust Principle The parties to the transaction must trust each other Buyer must believe that seller is legitimate and will deliver the goods Buyer must believe that goods are as represented and are worth the price Seller must believe that buyer is legitimate and will pay for the goods purchased 17 S.M.O.K.E TECHNOLOGIES

How can we secure ePayment?:

How can we secure ePayment? The Security Principle Parties need a secure environment in which to conduct the electronic transactions Seller needs to protect the details of the transactions Buyer needs to be certain that his/her information is securely handled and stored Buyer needs to be certain that information is not stolen that it can be inappropriately used 18 S.M.O.K.E TECHNOLOGIES

ePayment Solutions:

ePayment Solutions Must provide security : resistance to fraud and online attacks Reliable : highly available and accessible at all times Cost effective : cost per transaction should be low even for micro-payment Integrated and scaleable : interoperable amongst different systems, payment methods and multiple servers distributed across the Internet Convenient and easy to use : should support several devices Anonymity : should protect the identities of parties to the transactions and should not monitor the sources of finance 19 S.M.O.K.E TECHNOLOGIES

Securing ePayments:

Securing ePayments Identification and authenticate the ability to verify both the transacting parties Authorisation the ability to validate the rightful owner to the transaction Integrity and confidentiality the ability to transmit the transaction securely the ability to store the transaction properly Accountability The ability to provide audit trail as evidence in dispute Policies for sharing risks and liabilities the mechanism to settle disputes/non-repudiation 20 S.M.O.K.E TECHNOLOGIES

Authentication Models:

Authentication Models Something you have and something you know – ATM card model Known to the back-end (server), synchronize with each transaction using a one time random number – Secur-ID model “Sign” each transaction – PKI-model Tie into a real person – Biometrics 21 S.M.O.K.E TECHNOLOGIES

ePayment Transaction Cycle:

ePayment Transaction Cycle Buyer Issuing Bank Merchant Acquiring Bank Visa/Mastercard Bills buyer Pays bank Orders goods Deliver goods Reimburses merchant Voucher to Acquiring Bank Transaction voucher to Issuing Bank Issuing Bank pays Visa / Mastercard Sends transaction voucher to Visa / Mastercard Visa / Mastercard reimburses Acquiring Bank 1 2 7 4 5 3 6 8 9 22 S.M.O.K.E TECHNOLOGIES

Secure Sockets Layer (SSL):

Secure Sockets Layer (SSL) A security protocol to protect sensitive data transmitted over the Internet Uses encryption to protect the transmission of data When SSL session starts, server sends key to the browser, which returns random key to the server Ensures that data are not tampered with or stolen en route 23 S.M.O.K.E TECHNOLOGIES

Secure Electronic Transfer - SET :

Secure Electronic Transfer - SET Protocol by Visa and MasterCard released in 1996 3 party system - cardholder, merchant and bank using SET-enabled systems Uses digital certificate to ensure cardholder is who he/she says he/she is or claims to be Credit card details are invisible to merchants, protected by encryption for clearing bank 24 S.M.O.K.E TECHNOLOGIES

3D SET (Server-based SET):

3D SET (Server-based SET) Overcome the resistance of original SET Uses server-based implementation of SET Reduces technology that must be deployed by merchant and customer Merchants use ‘thin’ modules Customers use ‘slim’ digital wallets Not inter-operable with SSL websites 25 S.M.O.K.E TECHNOLOGIES

How 3D SET works ...:

How 3D SET works ... Customer Acquirer Issuer Cardholder Certificates Wallet Server Merchant API or URL 2. Wallet Initiates Purchase 4. Payment Authorisation WTLS SSL SET SET 1. Cardholder Authentication 3. Payment Request Merchant Certificates Payment Gateway 26 S.M.O.K.E TECHNOLOGIES

Features of 3D SET:

Features of 3D SET Certificate is stored in a central server of the issuer and not at the cardholder computer Cardholder is flexible to use certificates with other devices Cardholder can only use certificate issued by the CA - a limitation Theft of certificate is still possible from the server-based SET - a problem 27 S.M.O.K.E TECHNOLOGIES

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