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•  Funds deposited into account, from which funds are paid out or withdrawn as needed, e.g., debit cards, gift certificates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