E-commerce payment system
E-commerce payment systems, also known as electronic payment systems, facilitate the acceptance of electronic payment for offline transfer. E-commerce payment systems are a subcomponent of electronic data interchange (EDI) and have become increasingly popular as a result of the proliferation of internet-based shopping and banking.
When it comes to e-commerce purchases, credit cards continue to be the most popular means of payment. This method of payment was used for almost all online retail purchases in North America as of the year 2008, accounting for about 90 percent of all transactions. Because credit and debit cards are so widely used, it is impossible for an online business to succeed without providing support for these payment methods. In accordance with the banking and financial regulation in the countries in which the debit/credit service conducts business, online merchants are required to adhere to the stringent rules that are imposed by the credit and debit card issuers (such as Visa and Mastercard). These rules must be followed.
The B2B mode is often used by e-commerce payment systems. During the payment process of transactions using the typical model of business-to-business (B2B) electronic commerce, there is a worry over the security of client information, information about businesses, and the payment information base.
Obtaining a certificate from an authorised certificate authority (CA) that provides public-key infrastructure is a prerequisite for basic authentication (of the financial institution on the receiving end), data integrity, and confidentiality of the electronic information exchanged over the public network for the vast majority of payment systems that are accessible via the public Internet. This is because a CA is the entity that is responsible for maintaining public-key infrastructure (PKI). Even if transport layer security (TLS) is implemented to protect the portion of the transaction that takes place over public networks—especially when it comes to payment systems—the website that interacts directly with customers still needs to be coded with extreme caution in order to prevent the disclosure of credentials and the subsequent risk of identity theft for customers.
In spite of the fact that it is widely used in North America, there are still a great number of nations, such as China and India, that have certain challenges to solve in terms of credit card security. Use of the card verification number (CVN), which compares the verification number written on the signature strip on the back of the card with the information that is on file with the cardholder's issuing bank, is one of the increased security measures that has been implemented.
There are businesses that are dedicated to conducting financial transactions over the internet. Some examples of these businesses include Stripe, which processes credit card payments, Smartpay, which facilitates direct online bank payments, and PayPal, which provides customers with alternative payment methods at checkout. A good number of the intermediaries make it possible for customers to easily open an account and to move money between their online bank accounts and their accounts at conventional financial institutions, most often via automated clearing house (ACH) transfers.
Despite the fact that there is a danger of theft and misuse, as well as the often laborious process of seeking remedy when things go wrong, the widespread usage of cyber-mediary accounts has been contributed to by the speed and ease with which they may be set and operated. The inherent information asymmetry of large financial institutions that maintain information safeguards provides the end-user with little insight into the system when the system mishandles funds, leaving disgruntled users frequently accusing the mediaries of sloppy or wrongful behaviour; trust between the public and the banking corporations is not improved when large financial institutions are revealed to have taken flagrant advantage of their asymmetric power, such as the 2008 financial crisis.