Ecommerce

UNIT 2

DR. SMITA GHOSHAL

Secure Electronic Payment Protocol
(SEPP)
 Secure Electronic Transaction or SET is a system which
ensures security and integrity of electronic transactions done
using credit cards in a scenario. SET is not some system that
enables payment but it is a security protocol applied on those
payments. It uses different encryption and hashing techniques
to secure payments over internet done through credit cards.

 SET protocol was supported in development by major

organizations like Visa, Mastercard, Microsoft which
provided its Secure Transaction Technology (STT) and
NetScape which provided technology of Secure Socket Layer
(SSL).
DR. SMITA GHOSHAL
DR. SMITA GHOSHAL
 SET protocol restricts revealing of credit card details to
merchants thus keeping hackers and thieves at bay. SET
protocol includes Certification Authorities for making use of
standard Digital Certificates.
 SET was developed by the SET Consortium, established in
1996 by VISA and MasterCard in cooperation
with GTE, IBM, Microsoft etc.

DR. SMITA GHOSHAL

Participants in SET
In the general scenario of online transaction, SET includes
similar participants:
 Cardholder – customer
 Issuer – customer financial institution
 Merchant
 Acquirer – Merchant financial
 Certificate authority – Authority which follows certain
standards and issues certificates(like X.509V3) to all other
participants.

DR. SMITA GHOSHAL

SET incorporates the following
features:
 To meet the business requirements, SET incorporates the
following features:
 Confidentiality of information
 Integrity of data
 Cardholder account authentication
 Merchant authentication

DR. SMITA GHOSHAL

Electronic Cash and Electronic
Payment Schemes
 E-money transactions are faster, convenient, and saves a lot of
time.
 Online payments done via credit cards, debit cards, or
smart cards are examples of emoney transactions.
 Another popular example is e-cash. In case of e-cash, both
customer and merchant have to sign up with the bank or
company issuing e-cash.

DR. SMITA GHOSHAL

Common electronic payment methods
 Credit Card.
 Debit Card.
 Smart Card.
 E-Money.
 Electronic Fund Transfer (EFT)

DR. SMITA GHOSHAL

What is electronic payment system?
 Electronic Payment is a financial exchange that takes place
online between buyers and sellers. The content of this
exchange is usually some form of digital financial instrument
(such as encrypted credit card numbers, electronic cheques
or digital cash) that is backed by a bank or an intermediary,
or by a legal tender.

DR. SMITA GHOSHAL

FEW COMPONENTS OF A COMPREHENSIVE E-
PAYMENTS STRATEGY
 Commercial cards
 A purchasing card (p-card) goes beyond a traditional
business credit card with advanced features like virtual card
numbers (VCNs). These are single-use, unique credit card
numbers generated in real time for a specific purchase amount,
date and supplier. VCNs enable a company to use a p-card with
greater confidence for larger purchase amounts.

DR. SMITA GHOSHAL

 Travel and entertainment (T&E) cards are effective for
companies that don't want their employees to purchase items
on their own credit cards or for employees who don't want
to worry about receiving timely reimbursement.

DR. SMITA GHOSHAL

 Electronic accounts payable (EAP) accounts are non-plastic
purchasing accounts used to pay for invoiced goods and services.
EAP accounts can be integrated with a direct file transmission
platform which centralizes all payments processing (virtual card
numbers, ACH and wires).
 EAP accounts can also enable different departments to issue
distinct credit card numbers (through the use of ghost card
accounts) that roll up to one corporate account.
 This allows finance to easily assign costs to departments and allows
suppliers to charge the account directly (e.g., when a plastic p-
card can't be used), while providing the company with payment
float, insight and controls. EAP accounts also allow you to set
dynamically adjustable spending limits that are assigned to match
the transaction amount.

DR. SMITA GHOSHAL

 Wire transfers
 Wire transfers are used to make domestic and international high
value and rapid direct bank-to-bank payments, including ad-hoc
and one-time payments. Businesses typically use wire transfers
to pay or receive funds same day—benefitting from nearly
immediate and guaranteed availability of funds via secure, non-
reversible transactions. This can be important for businesses that
need to make an immediate purchase or cover an urgent
business need.

DR. SMITA GHOSHAL

Electronic Fund Transfer
 Electronic funds transfer (EFT) refers to an electronic
financial transaction.

 Electronic funds transfer transactions are quicker and

more efficient than paper-based funds transfers. They can also
eliminate paperwork and needless administrative efforts.
Examples of common electronic funds transfer transactions
include the following:

 Automatic teller machines (ATM)

 Direct deposit payroll systems
 Direct payments between buyer-seller businesses
 Electronic bill-paying via online banking
 International cash wire transfers

DR. SMITA GHOSHAL

 An electronic fund transfer moves money from one
account to another. The accounts can be at the same financial
institution or two different financial institutions. The
transaction is done electronically over a computerized
network.
 Electronic fund transfers are regulated by
the Electronic Fund Transfer Act (EFTA).

DR. SMITA GHOSHAL

 A disadvantage of electronic funds transfer (EFT) is
that the process cannot be reversed if a sender should enter
an incorrect account number.
 The other disadvantages associated with EFT include the
potential for hacking of personal banking details and periodic
technical difficulties.

DR. SMITA GHOSHAL

Are EFT payments safe?
 Just like Payroll Direct Deposit and ATM transactions, EFT
payments are extremely safe. All payment information is
encrypted with 128-bit SSL and sent through a secure
communications channel. Information cannot be redirected,
read, or tampered with. In general, the EFT process can take
up to 3 business days.

DR. SMITA GHOSHAL