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Chapter 11: Online Payment Systems by Mind Map: Chapter 11: Online 
Payment Systems
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Chapter 11: Online Payment Systems

Payment Cards

all types of plastic cards that consumers use to make purchases

Types of Cards

Debit, Banking

Credit, Visa/Mastercard etc.

Change, Amex and Discover Card, Closed Loop


1. Consumer protection from fraud

2. Worldwide acceptance

3. Currency Convergence handled

4. Merchant protection (authorization/verification)

5. Merchant assurance from issuing companies


1. Cost to merchants: per transaction or a monthly fee

2. Cost to consumers: annual fees

Payment Processing

EMV standard

30-day shipping requirement

Merchant accounts required to accept credit cards

General Payment Service Providers, icVerify

Online Payment Service Providers, InternetSecure, PaymentOnline, PayPal merchants, Reg.Net for DRM

Figure 11.3, Customer Logs into the Internet on an HTTPS, Payment Authorization is done by merchant - check balance to see that payment is a go, Issuing bank, ACH network, Merchant bank

Electronic Cash

any value storage and exchange system created by a private entity that does not use paper documents or coins


1. good for micro payments (<$1) and small transactions (<$10)

2. readily exchanged for real cash (unlike scrip)

3. useful for those who cannot get credit cards

4. no need for authorizations, as required by payment cards

5. Independence: unrelated to any proprietary network or storage device

6. portability: freely transferable between two parties (across borders)

7. convenience: does not require any special hard/software


1. not standardized or universall accepted

2. no audit trail, due to independence and privacy

3. security issues: potential for "double-spending" and "money laundering"

4. security issues: susceptible to forgery

Online Systems

Electronic Wallets

holds credit card numbers, electronic cash, owner identification, and owner contact information and provides that information at an electronic commerce site's check out counter


Bileo services

Microsoft Passport

Yahoo Wallet


Information stored on clients' personal computers with various computer softwares

Smart Cards

One card for everything

Benefits over magnetic cards