AJS Media

Electronic Payment

An eCommerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as Electronic Data Interchange (EDI), eCommerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking. In the early years of B2C transactions, many consumers were apprehensive of using their credit and debit cards over the internet because of the perceived increased risk of fraud.
Recent research shows that 28% of people in the United Kingdom still do not shop online because they do not trust online payment systems. However, 64% do believe that it is safe to shop online which is an increase from 26% in 2008.

There are numerous different payments systems available for online merchants. These include the traditional credit, debit and charge card but also new technologies such as digital-wallets, e-cash, mobile payment and e-checks. Another form of payment system is allowing a 3rd party to complete the online transaction for you. These companies are called Payment Service Providers (PSP), a good example is Paypal or WorldPay. (Note Paypal also offers its own payment system)

Credit Cards and Smart Cards:
Over the years, credit cards have become one of the most common forms of payment for eCommerce transactions. In North America almost 90% of online B2C transactions were made with this payment type. Turban et al. goes on to explain that 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 seurity 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.

Electronic Bill Presentment and Payment
Electronic bill presentment and payment (EBPP) is a fairly new technique that allows consumers to view and pay bills electronically. There are a significant number of bills that consumers pay on a regular basis, which include: power bills, water, oil, internet, phone service, mortgages, car payments etc. EBPP systems send bills from service providers to individual consumers via the internet. The systems also enable payments to be made by consumers, given that the amount that appears on the e-bill is correct. Banks in Canada have been offering these on-line payment services for some time now, and are growing in popularity. Other service providers such as Rogers Communications and Aliant accept major credit cards within the bill payment sections of their websites. This service is in addition to the original EBPP method of a direct withdrawal from a bank account through a bank such as Scotiabank.

Three broad models of EBPP have emerged. These are: