An e-commerce payment system (or an electronic payment system) facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.
Credit cards remain the most common forms of payment for e-commerce transactions. As of 2008, in North America, almost 90% of online retail transactions were made with this payment type.[1] It is difficult for an online retailer to operate without supporting credit and debit cards due to their widespread use.[1] Online merchants must comply with stringent rules stipulated by the credit and debit card issuers (e.g. Visa and Mastercard) in accordance with a bank and financial regulation in the countries where the debit/credit service conducts business.[2][better source needed]
E-commerce payment system often use B2B mode. The security of customer information, business information, and payment information base is a concern during the payment process of transactions under the conventional B2B e-commerce model.[3]
For the vast majority of payment systems accessible on the public Internet, baseline authentication (of the financial institution on the receiving end), data integrity, and confidentiality of the electronic information exchanged over the public network involves obtaining a certificate from an authorized certificate authority (CA) who provides public-key infrastructure (PKI). Even with transport layer security (TLS) in place to safeguard the portion of the transaction conducted over public networks—especially with payment systems—the customer-facing website itself must be coded with great care, so as not to leakcredentials and expose customers to subsequent identity theft.
Despite widespread use in North America, there are still many countries such as China and India that have some problems to overcome in regard to credit card security. Increased security measures include use of the card verification number (CVN) which detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder's issuing bank.[4]
There are companies that specialize in financial transaction over the Internet, such as Stripe for credit cards processing, Smartpay for direct online bank payments and PayPal for alternative payment methods at checkout. Many of the mediaries permit consumers to establish an account quickly, and to transfer funds between their on-line accounts and traditional bank accounts, typically via automated clearing house (ACH) transactions.
The speed and simplicity with which cyber-mediary accounts can be established and used have contributed to their widespread use, despite the risk of theft, abuse, and the typically arduous process of seeking recourse when things go wrong. The inherent information asymmetry of large financial institutions maintaining information safeguards provides the end-user with little insight into the system when the system mishandles funds, leaving disgruntled users frequently accusing the mediaries of sloppy or wrongful behavior; trust between the public and the banking corporations is not improved when large financial institutions are revealed to have taken flagrant advantage of their asymmetric power, such as the 2016 Wells Fargo account fraud scandal.
There are varied types of electronic payment methods such as online credit card transactions, e-wallets, e-cash and wireless payment system.[5] Credit cards constitute a popular method of online payment but can be expensive for the merchant to accept because of transaction fees primarily. Debit cards constitute an excellent alternative with similar security but usually much cheaper charges. Besides card-based payments, alternative payment methods have emerged and sometimes even claimed market leadership.
Bank payments
This is a system that does not involve any sort of physical card. It is used by customers who have accounts enabled with Internet banking. Instead of entering card details on the purchaser's site, in this system the payment gateway allows one to specify which bank they wish to pay from. Then the user is redirected to the bank's website, where one can authenticate oneself and then approve the payment. Typically there will also be some form of two-factor authentication.
It is typically seen as being safer than using credit cards, as it is much more difficult for hackers to gain login credentials compared to credit card numbers. For many eCommerce merchants, offering an option for customers to pay with the cash in their bank account reduces cart abandonment as it enables a way to complete a transaction without credit cards.
Mobile money wallets
In some developing countries, many people do not have access to banking facilities, especially in tier II and tier III cities. Taking the example of India, there are more mobile phone users than there are people with active bank accounts. Telecom operators, in such locations, have started offering mobile money wallets which allow adding funds easily through their existing mobile subscription number, by visiting physical recharge points close to their homes and offices and converting their cash into mobile wallet currency. This can be used for online transaction and eCommerce purchases.
^ abTurban, E. King, D. McKay, J. Marshall, P. Lee, J & Vielhand, D. (2008). Electronic Commerce 2008: A Managerial Perspective. London: Pearson Education Ltd. p.550
^Mastercard: Security Rules and Procedures-Merchant Edition (PDF). 2009. Retrieved: May 12, 2009
^Zhou, Kai; Zhao, Weibin; Zhou, Huiyan (2022-01-01). "Research on model mechanism of B2B transaction based on delivery means of blockchain". International Journal of Technology, Policy and Management. 22 (1–2): 114–140. doi:10.1504/IJTPM.2022.122560. ISSN 1468-4322.
^Turban, E. King, D. McKay, J. Marshall, P. Lee, J & Vielhand, D. (2008). Electronic Commerce 2008: A Managerial Perspective. London: Pearson Education Ltd. p.554
^Fatonah, S; Yulandari, A; Wibowo, F W (December 2018). "A Review of E-Payment System in E-Commerce". Journal of Physics: Conference Series. 1140 (1): 012033. Bibcode:2018JPhCS1140a2033F. doi:10.1088/1742-6596/1140/1/012033. ISSN 1742-6588. S2CID 169710429.
Further reading
Lowry, Paul Benjamin, Taylor Wells, Gregory D. Moody, Sean Humpherys, and Degan Kettles (2006). "Online payment gateways used to facilitate e-commerce transactions and improve risk management," Communications of the Association for Information Systems, vol. 17(6), pp. 1–48 (http://aisel.aisnet.org/cais/vol17/iss1/6).
Turban, E. King, D. McKay, J. Marshall, P. Lee, J & Vielhand, D. (2008). Electronic Commerce 2008: A Managerial Perspective. London: Pearson Education Ltd. p. 554
February 14, 2023
commerce, payment, system, this, article, multiple, issues, please, help, improve, discuss, these, issues, talk, page, learn, when, remove, these, template, messages, this, article, needs, additional, citations, verification, please, help, improve, this, artic. This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources E commerce payment system news newspapers books scholar JSTOR November 2008 Learn how and when to remove this template message This article possibly contains original research Please improve it by verifying the claims made and adding inline citations Statements consisting only of original research should be removed March 2012 Learn how and when to remove this template message Learn how and when to remove this template message An e commerce payment system or an electronic payment system facilitates the acceptance of electronic payment for offline transfer also known as a subcomponent of electronic data interchange EDI e commerce payment systems have become increasingly popular due to the widespread use of the internet based shopping and banking Credit cards remain the most common forms of payment for e commerce transactions As of 2008 in North America almost 90 of online retail transactions were made with this payment type 1 It is difficult for an online retailer to operate without supporting credit and debit cards due to their widespread use 1 Online merchants must comply with stringent rules stipulated by the credit and debit card issuers e g Visa and Mastercard in accordance with a bank and financial regulation in the countries where the debit credit service conducts business 2 better source needed E commerce payment system often use B2B mode The security of customer information business information and payment information base is a concern during the payment process of transactions under the conventional B2B e commerce model 3 For the vast majority of payment systems accessible on the public Internet baseline authentication of the financial institution on the receiving end data integrity and confidentiality of the electronic information exchanged over the public network involves obtaining a certificate from an authorized certificate authority CA who provides public key infrastructure PKI Even with transport layer security TLS in place to safeguard the portion of the transaction conducted over public networks especially with payment systems the customer facing website itself must be coded with great care so as not to leak credentials and expose customers to subsequent identity theft Despite widespread use in North America there are still many countries such as China and India that have some problems to overcome in regard to credit card security Increased security measures include use of the card verification number CVN which detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder s issuing bank 4 There are companies that specialize in financial transaction over the Internet such as Stripe for credit cards processing Smartpay for direct online bank payments and PayPal for alternative payment methods at checkout Many of the mediaries permit consumers to establish an account quickly and to transfer funds between their on line accounts and traditional bank accounts typically via automated clearing house ACH transactions The speed and simplicity with which cyber mediary accounts can be established and used have contributed to their widespread use despite the risk of theft abuse and the typically arduous process of seeking recourse when things go wrong The inherent information asymmetry of large financial institutions maintaining information safeguards provides the end user with little insight into the system when the system mishandles funds leaving disgruntled users frequently accusing the mediaries of sloppy or wrongful behavior trust between the public and the banking corporations is not improved when large financial institutions are revealed to have taken flagrant advantage of their asymmetric power such as the 2016 Wells Fargo account fraud scandal Contents 1 Methods of online payment 1 1 Bank payments 1 2 Mobile money wallets 2 See also 3 References 4 Further readingMethods of online payment EditThere are varied types of electronic payment methods such as online credit card transactions e wallets e cash and wireless payment system 5 Credit cards constitute a popular method of online payment but can be expensive for the merchant to accept because of transaction fees primarily Debit cards constitute an excellent alternative with similar security but usually much cheaper charges Besides card based payments alternative payment methods have emerged and sometimes even claimed market leadership Bank payments Edit This is a system that does not involve any sort of physical card It is used by customers who have accounts enabled with Internet banking Instead of entering card details on the purchaser s site in this system the payment gateway allows one to specify which bank they wish to pay from Then the user is redirected to the bank s website where one can authenticate oneself and then approve the payment Typically there will also be some form of two factor authentication It is typically seen as being safer than using credit cards as it is much more difficult for hackers to gain login credentials compared to credit card numbers For many eCommerce merchants offering an option for customers to pay with the cash in their bank account reduces cart abandonment as it enables a way to complete a transaction without credit cards Mobile money wallets Edit In some developing countries many people do not have access to banking facilities especially in tier II and tier III cities Taking the example of India there are more mobile phone users than there are people with active bank accounts Telecom operators in such locations have started offering mobile money wallets which allow adding funds easily through their existing mobile subscription number by visiting physical recharge points close to their homes and offices and converting their cash into mobile wallet currency This can be used for online transaction and eCommerce purchases See also EditE commerce credit card payment system Electronic data interchange Electronic funds transfer Payments as a platform Payment service provider Online Banking ePaymentsReferences Edit a b Turban E King D McKay J Marshall P Lee J amp Vielhand D 2008 Electronic Commerce 2008 A Managerial Perspective London Pearson Education Ltd p 550 Mastercard Security Rules and Procedures Merchant Edition PDF 2009 Retrieved May 12 2009 Zhou Kai Zhao Weibin Zhou Huiyan 2022 01 01 Research on model mechanism of B2B transaction based on delivery means of blockchain International Journal of Technology Policy and Management 22 1 2 114 140 doi 10 1504 IJTPM 2022 122560 ISSN 1468 4322 Turban E King D McKay J Marshall P Lee J amp Vielhand D 2008 Electronic Commerce 2008 A Managerial Perspective London Pearson Education Ltd p 554 Fatonah S Yulandari A Wibowo F W December 2018 A Review of E Payment System in E Commerce Journal of Physics Conference Series 1140 1 012033 Bibcode 2018JPhCS1140a2033F doi 10 1088 1742 6596 1140 1 012033 ISSN 1742 6588 S2CID 169710429 Further reading EditLowry Paul Benjamin Taylor Wells Gregory D Moody Sean Humpherys and Degan Kettles 2006 Online payment gateways used to facilitate e commerce transactions and improve risk management Communications of the Association for Information Systems vol 17 6 pp 1 48 http aisel aisnet org cais vol17 iss1 6 Turban E King D McKay J Marshall P Lee J amp Vielhand D 2008 Electronic Commerce 2008 A Managerial Perspective London Pearson Education Ltd p 554 Retrieved from https en wikipedia org w index php title E commerce payment system amp oldid 1138703163, wikipedia, wiki, book, books, library,
