A payment system could be defined as a financial system creating the means for transferring money between suppliers and users of funds, usually by exchanging debits or credits among financial institutions. Also known as a payment mechanism. Due to the backing of modern fiat currencies with government bonds, payment systems are a core part of modern monetary systems. In this study, the interaction between the competition-cooperation nexus and regulation in retail payment systems is analysed by applying the main lessons from the theory of network industries. This is justifiable on the grounds that the payment systems industry inherently has many characteristics in common with network industries.
E-Commerce burst with force in the late 90’s. People thought at the beginning that it will be a transforming element in this century. In the early years of B2C transactions, many consumers were apprehensive of using their credit and debit cards over the internet because of the perceived increased risk of fraud. Recent research shows that 30% of people in the United Kingdom still do not shop online because they do not trust online payment systems. However, 54% do believe that it is safe to shop online which is an increase from 26% in 2006. There are emerging technologies and electronic payment systems that offer guarantees of security and integrity for these transactions in a reliable environment, giving confidence to users. There are numerous different payments systems available for online merchants. These include the traditional credit, debit and charge card but also new technologies such as digital-wallets, e-cash, mobile payment and e-checks. Another form of payment system is allowing a 3rd party to complete the online transaction for you. These companies are called Payment Service Providers (PSP).
Despite this widespread use in North America, there are still a large number of countries such as China, India and Pakistan that have some problems to overcome in regard to credit card security. In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash which transfers from the consumers’ card to the sellers’ device. A popular smartcard initiative is the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card from your bank account, and you can then use your card at various retailers and on the internet.
Online payment systems allow quick and safe transactions. In fact, if not, our daily lives would be affected very seriously, we should go to the bank every time we wanted to make a payment, would bring stacks of coins and bills, and lose time queuing when now it could be done with a credit card with a simple click on the computer.
SSL: The SSL protocol combines symmetric encryption systems and asymmetric encryption systems. SET: Mastercard and Visa developed SEPP (Secure Electronic Payment Protocol) and STT (Secure Transaction Technology) to ensure the economic transactions exclusively using credit cards as payment, although later both entities, with American Express, agreed to join efforts to develop a single protocol for electronic payment cards, called SET. The SET protocol (Secure Electronic Transaction) is a set of rules or safety specifications which are a standard way to perform payment transactions through the Internet. 3D Secure or 3 Domain Secure: has been developed by Visa to verify that the buyer is entitled to use the credit card. It gives to the buyer and to the seller greater certainty in electronic transactions. Its trade name is Verified by Visa. This protocol prevents the fraudulent use of credit cards through the Internet.
The author is a software engineer, expert in e-commerce. He has written interesting articles regarding ipn script and ipn php topics.
