• Credit cards are issued to consumers by financial
institutions, typically banks, and allows a card holder or
their designee to borrow money for purchases and pay
it back at a later date with interest.
• Credit cards also include a line of credit that allows the
card holder to borrow money in the form of a cash
advance.
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13
Credit Card Processing
• Credit card processing is a complex service
involving multiple moving parts, emerging
technologies payment networks, regulatory
bodies and financial institutions.
• Like any service involving that level of
complexity, credit card processors often vary
in quality.
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Processing Payment Card Online
• Online payment processing refers to the
exchange of money online as payment for
goods or services ordered over the internet.
• Can be done automatically by software packaged
with electronic commerce software.
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Processing Payment Card Online
Payment is done through through
two types of cards:
•Debit card
•Credit card
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2
Debit Card
Debit Card:
EMV Chip
Linked with the bank
account so the money you
spend is automatically
deducted from your
account.
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Credit Card
• It allows you to use someone’s money to make
purchase while you pay the money back later
• Money should be paid in the billing period
• Interest is allowed if not paid in time
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Debit Card
Credit Card
•It is issued by bank to its customers for
making payment directly through
account of customer on any purchase
•It is issued by bank or any financial
institution for making payment by the
bank on behalf of customers’ on any
purchase
•It is a card to pay now
•It is a card to pay later
•No interest is charged
•Interest is charged, if payment is not
made within specified time
period/billing period
Working techniques of credit card
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Credit card works in three major stages
• Payment Authorization: gives approval for the
transaction that is stored with the order.
• Payment Authentication: issuing bank receives the
payment request and verifies whether the cardholder
has available balance to make the purchase.
• Settlement: sales are processed and funds are
transferred from issuing bank to merchant’s account.
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3
How credit card transaction works:
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Benefits and limitations of
Credit Card
Benefits of Credit Card
• Convenience
• Spread out the cost
• Go interest free
• Cashback and rewards
• Purchase protection
• Boost your credit
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Limitations of Credit Card
• Credit worthiness needed
• Impulse buying
• Debt issues
• Credit score
• Paperwork and homework
• Credit card frauds
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Smart Card
• Smart card is again similar to credit card or a
debit card in appearance, but it has a small
microprocessor chip embedded in it.
• It has the capacity to store a customer’s workrelated and/or personal information.
• Smart cards are also used to store money and
the amount gets deducted after every transaction.
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Advantages of Smart Card
•
•
•
•
•
Gives security of information.
Has more organized information.
Transactions can happen off and on-line.
Reduces fraud.
Has the ability of on-site approval.
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1
Disadvantages of Smart Card
•Fees applied with the use of a card.
•Gives liability issues if stolen or lost.
•Lack of technology to support users
•Potentiality area for hackers and computer
viruses.
•Accuracy of information is small.
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12
Types of Card
• Contact Cards
• Contactless Cards
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Payer Authentication
• It is security protocols developed by VISA
and MASTERCARD that allows consumer
to shop online more securely.
• It is the validation that the online shopper
is the cardholder.
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Features
• Helps to minimize fraudulent transactions,
• Manages upgrades and updates, as payer
authentication program change,
• Support or verified by VISA, MASTERCARD
SecureCode, American Express SafeKey,
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Benefits
• Easily implement and maintain payer
authentication through a single connection,
• Free and automatic platform upgrades,
• Reduction in fraud screening cost,
• Helps to minimize fraudulent transaction,
3
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2
Electronic Payment Gateways
• A payment gateway is a service that authorizes and
processes debit/credit card payments for online
merchants and traditional brick and mortar
businesses.
• A third party service that is actually a system of
computer processes that process, verify and accepts
or decline credit card transaction on behalf of
merchant through secure internet connections.
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2
3
Payment Gateways in Nepal
How EPG Works
Most common Security Threats in
E-commerce Environment
1.
2.
3.
4.
5.
6.
7.
Malicious code
Unwanted programs
Phishing
Hacking
Fraud/Theft
Denial of service
Insider jobs
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