Chapter 9: Payment System for Electronic Commerce

电子商务概论（双语）教研组

Summary

In last lecture, you learned about 1 、 Online Banking Industry 2 、 Payment Cards 3 、 Online Payment Basics （ 1 ）

•Stored-Value Cards•Electronic Wallets

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

I. Credit Cards

A credit card refers to commercial banks or other financial institutions have issued payment cards, all or some functions of credit card included consume payment( 消费支付 ), credit savings ( 信用贷款 ) and loans, transfer balance( 转账结算 ), access to cash( 存取现金 ) and so on.

电子商务概论（双语）教研组

I. Credit Cards

Credit Card Quasi Credit Card Debit Card

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

7.Credit Card Info.Confirm

Payment

1.C

redit

Card

Info

.

1. Third-Party

Card Holder

Merchant

Third-Party Bank2.A

ccount

5.A

uth

oriza

ti

on

3. Purchase Order and Account6.Confirm Order

Figure 1: Contract with a third-part to handle credit card payment processing

4.A

ccount

电子商务概论（双语）教研组

1. Third-Party

Advantage a. Non- encrypted 、 Low

transaction cost b. Providing security

Disadvantage a. Register both buyer and

vendor b. Account within third-party

stolen possibly

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

2. Encrypted

Merchant

Buyer

Third-Party

Merchant’s Bank

Issuing Bank

2. Encrypted Credit Card Info.

4.Request for verifying CreditCard Info.

Figure 2: Simple encrypted credit card payment processing

1.E

ncry

pte

d C

red

it C

ard

Info

. An

d P

urc

hase O

rder

8. P

urc

hase In

fo.

7. Confirm Info.3.

Decryp

ted

Cred

it

Card

Info.

5.Authorization

6. Con

firm

Info.

电子商务概论（双语）教研组

2. Encrypted

Advantage a. Providing more security Disadvantage a. High transaction cost

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

1 2 3

I. Credit Cards-> Models

Third-Party通过第三方代理的信用卡支付

Encrypted简单加密信用卡支付

SET Protocol基于 SET 的信用卡支付

电子商务概论（双语）教研组

3. SET Protocol

Acquiring Bank

Issuing Bank

Payment Gateway

Certificate Authority

Figure 3: Credit card payment processing based on SET Protocol

Card Holder

Online Merchant

6.Confirm

2.verify

1.Order

5.Confirm

4.Approve

3.verify

Certificate

Certificate

Certificate

电子商务概论（双语）教研组

3. SET Protocol

Advantage a. Ensure transmission of data

is not stolen by hackers b. Order information and

individual account information isolation

c. Different manufacturer of software development is compatible and interoperability function

电子商务概论（双语）教研组

3. SET Protocol

Disadvantage a. The processing speed of

payment gateway is fail-soft b. High transaction cost c. Pay rise to delay d. Pay for tracking, sense of

insecurity to user

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

II. Electronic Cash-> Definition-> Definition

Electronic cash (also known as electronic money, electronic currency, digital money, digital cash or digital currency) refers to Data representing money, which data can be transferred by means of a computer network and can be traded as a token exchangeable for real money.

电子商务概论（双语）教研组

II. Electronic Cash

Buyer Bank

Vendor

Date-base of E-cash

1.Opens an account with an E-cash issuer2.Account

3.Establish credit and deposit4.Gives a specific amount of E-cash

7. Check

Figure 4: Process a Electronic Cash Transaction

9.Confirm Info.

5.Order and Encrypt-ed E-cash

6.E

ncry

pte

d

E-c

ash

8.C

on

firm

-> Processing-> Processing

电子商务概论（双语）教研组

II. Electronic Cash-> Characteristics-> Characteristics

a. Virtualityb. Safetyc. Storabilityd. Repeatability

电子商务概论（双语）教研组

II. Electronic Cash-> Advantage-> Advantage

a. Anonymousb. Do not followc. Save transaction costsd. Save transfer feee. Holding low riskf. Prevent forgery

电子商务概论（双语）教研组

II. Electronic Cash-> Disadvantage-> Disadvantage

a. Depends on bank's private-key security

b. Suitable for small transactions

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

Contents

Electronic Check

Electronic Cash

Credit card

Online Payment Basics

电子商务概论（双语）教研组

III. Electronic Check-> Definition-> Definition

An electronic version of the traditional paper check. It includes all the components of a paper check and can be used as a method of payment on the Internet.

电子商务概论（双语）教研组

III. Electronic Check

Bank2.E-check3

.Ord

er

an

d

ch

eck

4.V

arif

y 5.C

on

firm

7.D

ep

osits

th

e

ch

eck

in

the

ven

dor’s

ban

k

Figure 5: Check payment processing

Vendor

Buyer1.Registration

6.Confirm

-> Processing-> Processing