Chapter 4 Card Payment Systems

University of Information Technology – Vietnam National University, Ho Chi Minh City Dr.
Tran Van Hai Trieu

Faculty of Information Systems
Chapter 4
Card Payment Systems

University of Information Technology – Vietnam National University, Ho Chi Minh City Dr. Tran Van Hai Trieu
Learning objectives
• Definition of card payment and requirements of

card payment systems.
• Differences between card payment in E-

commerce and traditional trading.
• Card Types used in E-payment.
• Processes of card payment used in E-

commerce.
1. Definition of card payment and

requirements of card payment systems
What is a card payment?
A payment card is a card that

can be used to withdraw money
or pay for goods and services.
For instance, a debit card, credit
card, or prepaid card (a card pre-
loaded with funds).
Source: https://www.psr.org.uk/
When do you make a payment?
• When funds are transferred between accounts

they move in a series of steps that together form
a payment system.
• Payment systems let you pay a deposit on a

house, withdraw money from a cash machine,
pay by direct debit, write a cheque, receive your
salary into your bank account, or transfer
money via your smartphone.
Requirements of E-payment Systems

• E-payment systems need to have a number of
requirements as follows:
Requirements of E-payment Systems
Security Acceptability
Convenience Cost
Anonymity Control
Traceability Flexible
Interaction & Movement Independence
Popular Easy to use
Unification And Others
Source: https://papers.ssrn.com
2. Differences between card payments

in E-commerce
Compared to traditional trading
Card Payment in E-Commerce
• E-commerce sites use electronic payment,

which refers to paperless monetary transactions.
• Electronic payment has revolutionized business

processing by reducing paperwork, transaction
costs, and labor costs.
• Being user-friendly and less time-consuming

than manual processing, it helps business
organizations expand their market expansion.
Source: https://www.tutorialspoint.com
Card Payment in E-Commerce (Cont.)
• There are some payment modes for electronic

commerce as follows:
✓ Credit Card
✓ Debit Card
✓ Smart Card
✓ Others (E-Money, Electronic Fund Transfer -
EFT)
Card Payment in Traditional Commerce
• There are some payment modes for traditional

commerce as follows:
✓ Cash
✓ Debit Card
✓ Credit Card
✓ Cheque
✓ Others.
Source: https://byjus.com
3. Card Types used in E-payment

What is Credit Card?
• A Credit Card (also known as a bank credit card) is

a card issued by a bank, allowing customers to
spend first and pay later.
• The way Credit Card operates

is based on the customer's credit score.
• You receive an advance amount of money from the

bank and are allowed to shop freely within that
credit limit.
Source: https://hdbank.com.vn
Features of Credit Card
• Most credit cards contain the following

information:
✓ Name of the card issuer.
✓ Name and logo of the card-issuing bank.
✓ Cardholder's full name.
✓ Credit Card Number.
✓ Validity period of the card.
✓ CVV security code.

Features of Credit Card (Cont.)
• Each bank will have its own Credit Card

design.
• Each person's credit limit is different depending

on many factors such as the cardholder's credit
score or income level.
• At the end of each period, customers must

repay the bank the amount previously spent.
• Normally, if after 45 days the full amount is not

refunded, the cardholder will be charged credit
card interest.
Benefits of Credit Card
• Ensure safety and limit the risk of losing or

forgetting cash.
• Non-cash spending.
• Short-term spending is interest-free.
• Enjoy many attractive incentives.
• Zero percent interest rate for installment

payments.
• Easily manage for spending.

What is Debit Card?
• Domestic debit card

✓ Domestic debit cards are used to pay for products
and services within Vietnam.
✓ Domestic banks all issue debit cards, so you just

need to contact the local bank branch/transaction
office if you have a requirement.
Source: https://hdbank.com.vn
What is Debit Card? (Cont.)
• International debit card

✓ An international debit card is a card that is
capable of making payments at points of sale,
online shopping sites, and applications worldwide.
✓ International debit cards are issued by

international financial institutions such as VISA,
Mastercard, American Express, JCB, and others.
✓ Most major banks in Vietnam are affiliated with

and co-issue debit cards, such as visa debit card.
Features of Debit Card
• Debit Card has some features as follows:
✓ Payment
✓ Withdraw Cash
✓ Savings Deposit
✓ Money Transfer
✓ Balance Inquiry
✓ Statement Print
Features of Debit Card (Cont.)
• Whenever you spend, your account will be

deducted immediately.
• Spend in all currencies.
• An account's balance will be received as non-

term interest.
• There is no fee or a tiny fee when withdrawing

money.
Features of Debit Card (Cont.)
• Be careful when using debit cards.

✓ Register for Internet Banking, Mobile Banking or
Smart OTP.
✓ Periodically change your PIN, account

password, application, or use fingerprint / face
recognition.
✓ Do not provide debit card information.
✓ Only transact at reputable and secure locations.

What is Smart Card?
• A Smart Card, also known as a chip card, is a

physical plastic card that contains an embedded
integrated chip acting as a security token.
• The chip can be an embedded microcontroller or a

memory chip.
• An embedded microcontroller is capable of storing
data separately, performing on-card functions,
including encryption, mutual authentication,
interacting with smart card readers,
and resistance of tamper-proof.
Source: https://rfidstore.vn
Benefits of Smart Card
• High level of security.

• Larger memory.
• Prevent fraud.
• High reliability.
• Information security.
• Guaranteed privacy.
• Easy to use.
• Reduces costs for operators and users.
Types of Smart Card
• The classification of smart cards depends on

various factors, such as how the card reads and
writes data, the type of embedded chip, and the
capabilities of the chip.
• The different types of smart cards are as follows:
✓ Contact Smart Card is the most popular type of
smart card.
✓ These cards require physical contact with the card
reader to read the information stored on the contact
plate and perform the necessary transaction. I.e.,
credit cards, ATM cards, and SIM cards.
Types of Smart Card (Cont.)
• Contactless Smart Card does not require

physical contact with the reader to perform any
transaction. It just needs to be near a card
reader to be read, and no direct contact is
required.
• Contactless Smart Cards use radio frequency or

Near Field Communication (NFC) technology to
establish a wireless connection.
• Hybrid Smart Card is a combination of both

contact and contactless smart card.
• They can play the role of contact smart cards or

contactless smart cards depending on the
situation.
• They have two technologies embedded in them,

and each interface connects to different chips
using independent modules.
• Memory Smart Card can store, read, and write

data to the chip.
• Data can be overwritten, but it cannot be

modified because the card is not programmable.
• These cards are of limited use due to their low

memory capacity.
• There are three types of this card, such as

straight memory cards, protected memory cards,
and stored value memory cards.
• Microprocessor Smart Card has a

microprocessor embedded into the chip to
provide dynamic data processing.
• Microprocessor can add, delete, and edit

existing card data.
• Smart card operating system manages the data

and allocates memory.
• Microprocessor Smart Card stores a large

amount of data due to its larger memory space.
4. Processes of card payment used in

E-commerce
How an Online Credit Card Transaction Works

In conclusion
• Definition of card payment
• Requirements of card payment

systems.
Understand
• Differences between card
payment in E-commerce and
traditional trading.
• Card Types used in E-payment.
• Processes of card payment

used in E-commerce.
THANK YOU
FOR YOUR ATTENTION
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University of Information Technology – Vietnam National University, Ho Chi Minh City Dr.

Tran Van Hai Trieu

Card Payment Systems

• Definition of card payment and requirements of

• Differences between card payment in E-

• Card Types used in E-payment.

• Processes of card payment used in E-

1. Definition of card payment and

What is a card payment?

A payment card is a card that

When do you make a payment?

• When funds are transferred between accounts

• Payment systems let you pay a deposit on a

Requirements of E-payment Systems

2. Differences between card payments

Card Payment in E-Commerce

• E-commerce sites use electronic payment,

• Electronic payment has revolutionized business

• Being user-friendly and less time-consuming

Card Payment in E-Commerce (Cont.)

• There are some payment modes for electronic

Card Payment in Traditional Commerce

• There are some payment modes for traditional

3. Card Types used in E-payment

What is Credit Card?

• A Credit Card (also known as a bank credit card) is

• The way Credit Card operates

• You receive an advance amount of money from the

Features of Credit Card

• Most credit cards contain the following

✓ Name and logo of the card-issuing bank.

✓ Cardholder's full name.

✓ Credit Card Number.

✓ Validity period of the card.

✓ CVV security code.

Features of Credit Card (Cont.)

• Each bank will have its own Credit Card

• Each person's credit limit is different depending

• At the end of each period, customers must

• Normally, if after 45 days the full amount is not

Benefits of Credit Card

• Ensure safety and limit the risk of losing or

• Short-term spending is interest-free.

• Enjoy many attractive incentives.

• Zero percent interest rate for installment

• Easily manage for spending.

What is Debit Card?

• Domestic debit card

✓ Domestic banks all issue debit cards, so you just

What is Debit Card? (Cont.)

• International debit card

✓ International debit cards are issued by

✓ Most major banks in Vietnam are affiliated with

Features of Debit Card

• Debit Card has some features as follows:

Features of Debit Card (Cont.)

• Whenever you spend, your account will be

• Spend in all currencies.

• An account's balance will be received as non-

• There is no fee or a tiny fee when withdrawing

Features of Debit Card (Cont.)

• Be careful when using debit cards.

✓ Periodically change your PIN, account

✓ Do not provide debit card information.