MGTC50  Building Internet  Commerce Ventures A 3rd year undergraduate course in the Division of Management, University of Toronto at Scarborough

This page last updated 2001 Nov 17 Saturday

Payment acceptance and processing
www.witiger.com/ecommerce/paymentmatrix.htm
SET and SSL
Digital Certificates
Setting up a Shipping Account
Forms related to shipping and receiving
calculating shipping costs online
the large courier and shipping companies
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Section A

Section B

Section C

Section D

Section E

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Chpt 7  Electronic  Payment  Systems

Before we begin to discuss the different types of payment systems, let's take a perspective from the introduction to Chapters 7 that Schneider and Perry wrote and look at one of the big reasons why companies want to effect EPS. The answer to that reason is the same fundamental answer to why all companies are trying variants of e-commerce - the answer is "to cut costs". A substantial amount of the costs medium and large sized companies incur is the costs associated with billing. These costs include the printing and paper costs of making the invoice/bill and envelopes, as well as the postage costs for mailing the bills. Utility companies, for example, can spend $1 to $1.50 on each customer each month sending out tens our thousands of bills. When you are able to implement an electronic payment system for these types of situations it can save a large company $X00,000's of dollars each billing cycle - in addition, you also have the environmental consideration of saving trees, literally.

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Chapter 7 Electronic  Payment  Systems

Schneider and Perry write in the beginning of chapter 7 a caution that still holds true 2 years after the book was released in Dec 1999; "Implementation of electronic payment systems is in its infancy and still evolving. The technical, economic, cultural and legal components of electronic payment systems are not fully understood.. As a result there are a number of competing proposals for implementations of electronic payment systems"   . As a result of the fact that EPS "are not fully understood" and "there are a number of competing proposals", we propose that participants in this course endevour to learn about the fundemental building blocks of payment systems so that when you become aware for competing formats that seem to be moving towards market dominance in 2001/2002, you will be able to understand enough about the critical components that you can judge which one(s) to have your company adopt. For example; in the Schneider and Perry book they discuss four technologies electronic cash software wallets smart cards credit/debit cards It is not apparent which one will win out at this stage and as we approach Christmas 2001 it seems that after the Christmas period some of these new technologies, (and the particular EPS brands that are being launched) will prove to be winners or losers over this annual buying period frenzy. By November 2001 we should be able to find articles and reports that some of these technologies did better than others and this may prove helpful in winnowing out which new payment systems may end up being dominant. WTGR . "When customers arrive at a store's electronic checkout counter, merchants want to offer them payment options that are safe, covenient and widely accepted. The key is to figure out which choices work best for your company and for your customers" Schneider and Perry page 212- 1st Edition

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Payment Systems for traditionally disenfranchised people                               Payment Systems for traditionally disenfranchised people

. Why do we need to know about payment systems for teens? In some consumer product areas and consumer service categories they are the leaders of new product trends and uses; BUT, if these vendors are trying to parallel their success with online circumstances, they will be thwarted if teens cannot actually pay for the product. The interesting thing about the article below is the suggestion that developments of payment circumstances for teens will be different in Europe than in North America. WTGR ..    "If traditional players ignore teenagers they face losing future, profitable customers and they will face an uphill struggle against new, 'cooler' brands."  Patore comments ""There is a need in the market for a teen payment product that allows secure payments online," said Julie Cunningham, financial services analyst at Datamonitor. "Teens are keen to have their independence and to shop online. Both traditional players and new entrants have a  part to play in this market. New entrants can attract teens through  the 'cool factor', while traditional players should use their established role in society as a way to convince parents and to gain their support." Patore wrote "Datamonitor predicts that online teen payments will grow considerably in the next five years -- due in part to general growth in the number of Internet users. However, growth is likely to be very different in the United States compared to Europe. U.S. teenagers generally have much more money at their disposal than their European counterparts.  The dominance of the credit card in the United States will allow products connected to parents' credit cards to flourish. In Europe,   more independent solutions will emerge, with products developed by  independent companies such as Smartcreds and Splash Plastic, but also from banks."

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Payment Acceptance and Processing Chpt 14               Payment Acceptance and Processing Chpt 14               Payment Acceptance and Processing Chpt 14

Creating Stores on the Web Chpt 14, "Payment Acceptance and Processing" "An an online store owner, the majority of your customers' orders will be paid for with credit cards..."   . In 1998-2001 it is true that most payments are by credit cards - but since 1999, there have been many companies striving hard to develep alternate payment systems - unfortunately ion 1990 and 2000, not many of these systems were able to gather strong support - some died, and some are struggling; leaving credit cards to remain the major way people buy online products. WTGR . The textbook says that when you are looking for a merchant account provider, you can "... refer to the yellow pages". This is not very sophisticated advice !.   . In 2001, obtaining a merchant account to be a vendor that can receive payment through VISA, Mastercard and AMEX, is increasingly difficult - the reason is due to so many fraudelent uses of credit card processing by some of the adult web sites - which has caused the credit card industry to be more "invesitgative" when deciding to open a new account to a vendor. Some ISPs understand this situation and offer B2C e-commerce hosting solutions that include the processing of credit card - that is to say the ISP has a relationship with a financial institution so that when you open the hosting account, you also get a merchant account allowing you to accept the major credit cards. WTGR . Some medium and large sized ISP's and hosting service companies provide info and FAQs on their web site, have a look at The importance of credit card process services is represe