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Introduction to e-Commerce Payments

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1. AMLAS E R V I C E S Introduction to e- Commerce Payments Ari Viljakainen AMLA Services fi.linkedin.com/in/ariviljakainen/ @Ari_Viljakainen AMLAS E R V I C E S 2. AMLAS…
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  • 1. AMLAS E R V I C E S Introduction to e- Commerce Payments Ari Viljakainen AMLA Services fi.linkedin.com/in/ariviljakainen/ @Ari_Viljakainen AMLAS E R V I C E S
  • 2. AMLAS E R V I C E S Agenda 1. Consumer needs 2. Payment methods for e-commerce 3. Introduction to card payments 4. Security 5. Card transaction processing 6. Key players AMLAS E R V I C E S
  • 3. AMLAS E R V I C E S Consumer needs AMLAS E R V I C E S
  • 4. AMLAS E R V I C E S The usage is different for each country and even different for merchant segments and consumer types. In Finland direct bank payments (pankkinappi = bank button) leads with a bit more than 1/3 Payment cards are second Invoicing is becoming more common Preferred payment method when paying online E-commerce payment methods used in Nordics Source: Postnord & Nets 2014
  • 5. AMLAS E R V I C E S 40% in the Nordic countries cancel purchases because the website is not mobile optimized. (DIBS 2013) 33% state that they have cancelled a purchase because the right payment option was missing. (DIBS 2013) In order to succeed in e-commerce checkout process needs to be easy but secure in all devices. (The Jumio Consumer Mobile Insights Study 2013) Lack of payment options and difficult to use are very clear reason for abandoning the shopping cart Abandoning shopping carts , but why?
  • 6. AMLAS E R V I C E S Payment methods for e-commerce AMLAS E R V I C E S
  • 7. AMLAS E R V I C E S There are lots of different payment options available, some are listed here. E-Commerce payments, this is what it looks like for consumers Payment cards Direct bank payments Invoicing
  • 8. AMLAS E R V I C E S Online-stores are quite often built on commercial or open source platforms were payments are already integrated. Internet Payment Service Providers combine several payment methods into one service. This is how it is built Merchant online store Web store platform Payments Direct PSP Collecting PSP iPSP Provider(s)
  • 9. Difference between Direct PSP and Colection PSP Direct PSP Merchant Bank 1 Bank 2 Acquirer Invoicing, PayPal • Transaction • Financial • Contract Collecting PSP Merchant Bank 1 Bank 2 Acquirer Invoicing, PayPal
  • 10. Introduction to card payments AMLAS E R V I C E S
  • 11. AMLAS E R V I C E S The main roles are illustrated below. There are two types of payments: 1. in-store payments (card present). 2. on-line payments (card not present) 4-corner Model of Card Payments Issuing & Acquiring Service Provider Card scheme networks 1 2 Issuer Acquirer Payment Service Provider (PSP)
  • 12. AMLAS E R V I C E S Roles in 4-corner Model •Issues payment cards to consumers •Manages issuing processesIssuer •Provides merchants with card payment capabilities •Manages acquiring processesAcquirer •Accepts card payments •Physical and e-commerceMerchant •Provides merchant with payment terminals and online check-out service •Handles the transaction routing to acquirer Payment servide provider •Provides IT services and business process outsourcing to issuing and acquiring banks Issuing & Acquiring Service Provider
  • 13. AMLAS E R V I C E S Each scheme has different business model and role in the ecosystem. The main funtions for schemes are listed below. Card Scheme Networks Products Brand Processing of transactions Operating regulations Security requirements Protection for fraud Global acceptance (Visa, MasterCard)
  • 14. AMLAS E R V I C E S Security AMLAS E R V I C E S
  • 15. AMLAS E R V I C E S Can be stored? Protection needed? Cardholder data Card number 1 Yes Yes Cardholder name Yes Yes 2 Expiration date Yes Yes 2 Sensitive authorization data All data in the magstripe No - Security code No - PIN No - 1 More details how to handle card number is decribed in PCI-DSS 2 These details need to be protected if stored together with card number PCI Security Standards Council has defined an information security standard (PCI DSS) for organizations that handle cardholder information. Following table can be used as a guideline to find out if PCI DSS should be taken into use. Managing payment card details in IT systems and related processes
  • 16. AMLAS E R V I C E S Card transaction processing AMLAS E R V I C E S
  • 17. AMLAS E R V I C E S 3-D Secure authentication is used by Visa, MasterCard, American Express, and JCB. It provides an added protection towards online fraud. eCommerce Authentication 1. Insert card details 2. Authorization reguest to acquirer 6. Authorization response 4. Authorization reguest to issuer 5. Authorization response from issuer 3. Authorization reguest to acquirer 10. Authorization response Issuer Acquirer Payment Service Provider (PSP) Online store Access Control Server (ACS) 8. Insert 3-D Secure credentials 9. Authorization response 7. Authenticate
  • 18. AMLAS E R V I C E S Issuer Acquirer Payment Service Provider (PSP) Online store Transaction message will be created after succesfull authorizatio. Online store can also choose to create the transactions later for example at the end of the day. Transaction when paying in-store 1. Transaction message 4. OK 5. Transactions are sent to each issuer 6. OK 3. At the end of the day all transactions are sent to acquirer 2. OK
  • 19. AMLAS E R V I C E S Key players AMLAS E R V I C E S
  • 20. AMLAS E R V I C E S Atos Paytrail Checkout Nets Maksuturva DIBS Sofort Wirecard Ogone Gestpay Klarna Servired Worldpay Realex PayU.pl Webmoney Yandex Robokassa Nets Nets Nets IfMB http://premium.wpmudev.org/blog/the-big-list-of- payment-gateways-for-the-global-merchant/ AMLAS E R V I C E S
  • 21. AMLAS E R V I C E S Global PSP providers AMLAS E R V I C E S
  • 22. AMLAS E R V I C E S Contactless payments and in-app payments using Apple Pay Apple Pay Card tokenization Secure element NFC In-app
  • 23. AMLAS E R V I C E S Stripe
  • 24. AMLAS E R V I C E S Images by Nets, 2015 Thank you Ari Viljakainen AMLA Services fi.linkedin.com/in/ariviljakainen/ @Ari_Viljakainen AMLAS E R V I C E S
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