Thursday 17 September 2015

E-commerce Payment Systems




E-commerce Payment Systems

  Digital wallets

  •   Emulates functionality of wallet by authenticating consumer, storing and transferring value, and securing payment process from consumer to merchant

  •   Early efforts to popularize failed

  •   Newest effort: Google Checkout




  Digital cash

  •   Value storage and exchange using tokens

  •   Most early examples have disappeared; protocols and practices too complex

  •   Online stored value systems

  •   Based on value stored in a consumer’s bank, checking, or credit card account

  •   PayPal, smart cards

  •   Digital accumulated balance payment

  •   Users accumulate a debit balance for which they are billed at the end of the month

  •   Digital checking:

  Extends functionality of existing checking accounts for use online


 Online stored value systems

 Based on value stored in a consumer’s bank, checking, or credit card account

 PayPal, smart cards

 Digital accumulated balance payment

 Users accumulate a debit balance for which they are billed at the end of the month

 Digital checking:

 Extends functionality of existing checking accounts for use online

 Stored Value


  •  Funds deposited into account, from which funds are paid out or withdrawn as needed, e.g., debit cards, gift certificates

  •  Peer-to-peer payment systems

 Accumulating Balance


  •  Accounts that accumulate expenditures and to which consumers make period payments

 E.g., utility, phone, American Express accounts

 Credit cards

 55% of online payments in 2014
 Debit cards

 28% of online payments in 2014

Wireless Payment Systems


  •   Use of mobile handsets as payment devices well-established in Europe, Japan, South Korea

  •   Japanese mobile payment systems

  E-money (stored value)

  Mobile debit cards

  Mobile credit cards

  •   Not as well established yet in the United States

v  Majority of purchases are digital content for use on cell phone


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