Bisniess Studies

Learning Objectives

1. Understand the shifts that are occurring with regard to noncash and online payments. 2. Discuss the players and processes involved in using credit cards online. 3. Discuss the different categories and potential uses of smart cards. 4. Discuss various online alternatives to credit card payments and identify under what circumstances they are best used.

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Learning Objectives

5. Describe the processes and parties involved in e-checking. 6. Describe payment methods in B2B EC, including payments for global trade. 7. Discuss electronic bill and invoice presentment and payment. 8. Understand the sales tax implications of e-payments.

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The Payment Revolution

Some crucial factors come into play in determining whether a particular method of e-payment achieves critical mass:

Independence Interoperability and portability Security Anonymity Divisibility Ease of use Transaction fees Regulations

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The Payment Revolution

Using Payment Cards Online

payment card Electronic card that contains information that can be used for payment purposes Payment cards come in three types:

Credit cards Charge cards Debit cards

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The Payment Revolution

Processing Cards Online

authorization Determines whether a buyer’s card is active and whether the customer has sufficient funds settlement Transferring money from the buyer’s to the merchant’s account

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The Payment Revolution

Three basic configurations for processing online payments. Merchants may:

Own the payment software Use a point of sale system (POS) operated by an acquirer

payment service provider (PSP) A third-party service connecting a merchant’s EC systems to the appropriate acquirers. PSPs must be registered with the various card associations they support

Use a POS operated by a payment service provider

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The Payment Revolution

The key participants in processing card payments online include:

Acquiring bank Credit card association Customer Issuing...