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October, 2004 e-Commerce 101 1
e-Commerce 101
October, 2004 e-Commerce 101 2
FACT OR FICTION ??? VISA processed 5,200 credit card transactions per VISA processed 5,200 credit card transactions per
minute this past Holiday Season?minute this past Holiday Season?
The first ATM machine was developed in 1939?The first ATM machine was developed in 1939?
The first Universal Credit Card for use in The first Universal Credit Card for use in restaurants was issued in 1930?restaurants was issued in 1930?
October, 2004 e-Commerce 101 3
Introduction ….
October, 2004 e-Commerce 101 4
FACT OR FICTION ??? VISA processed 5,200 credit card VISA processed 5,200 credit card
transactions per minute this past transactions per minute this past Holiday Season?Holiday Season?
FICTION: VISA processed over 5,200 FICTION: VISA processed over 5,200 transactions PER SECOND this past transactions PER SECOND this past Holiday Season!Holiday Season!
October, 2004 e-Commerce 101 5
FACT OR FICTION ??? The first ATM machine was developed The first ATM machine was developed
in 1939?in 1939?
FACT: Luther George Simjiian FACT: Luther George Simjiian patented, the Bankamatic, a not so patented, the Bankamatic, a not so workable version of today’s ATMworkable version of today’s ATM..
October, 2004 e-Commerce 101 6
FACT OR FICTION ??? The first Universal Credit Card for use The first Universal Credit Card for use
in restaurants was issued in 1930?in restaurants was issued in 1930?
FICTION: In 1950, FICTION: In 1950, Frank McNamara, Frank McNamara, the founder of Diners’ Club, is the founder of Diners’ Club, is credited with having invented the credited with having invented the first universal credit card for use in first universal credit card for use in restaurants in 1950.restaurants in 1950.
October, 2004 e-Commerce 101 7
e-Commerce 101:
Course Objective
We will provide an overview of We will provide an overview of electronic credit card payment electronic credit card payment processing concepts, architecture, processing concepts, architecture, experiences, partners, internal experiences, partners, internal resources, and the eCommerce resources, and the eCommerce services we provide. services we provide.
October, 2004 e-Commerce 101 8
e-Commerce 101:
Outline Definition of e-Commerce.Definition of e-Commerce.
Credit card payment processing concepts, Credit card payment processing concepts, fee’s and security. fee’s and security.
e-Commerce Web Applications.e-Commerce Web Applications.
Getting Started.Getting Started.
e-Commerce at PSU (History, Services, e-Commerce at PSU (History, Services, Architecture) Architecture)
Q & AQ & A
October, 2004 e-Commerce 101 9
e-Commerce Definitions…
October, 2004 e-Commerce 101 10
Definitions of e-Commerce… ON-LINE Perspective:ON-LINE Perspective:
The buying and selling of products and services by businesses and consumers over the internet.The buying and selling of products and services by businesses and consumers over the internet.
COMMUNICATION Perspective:COMMUNICATION Perspective: The delivery of information, products/services, or payments via Telephone lines, computer networks, or any other meansThe delivery of information, products/services, or payments via Telephone lines, computer networks, or any other means
October, 2004 e-Commerce 101 11
Definitions of e-Commerce: BUSINESS PROCESS Perspective:BUSINESS PROCESS Perspective:
The application of technology toward the automation of business transactions and workflows. The application of technology toward the automation of business transactions and workflows.
BUSINESS SERVICE Perspective:BUSINESS SERVICE Perspective: A tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and A tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and
increasing the speed of service delivery.increasing the speed of service delivery.
October, 2004 e-Commerce 101 12
Presentation’s perspective:Presentation’s perspective: The process of providing the capability of buying and selling products and information on the Internet and other on-line services ….The process of providing the capability of buying and selling products and information on the Internet and other on-line services ….
OR SIMPLY STATEDOR SIMPLY STATED Collection of Payment for Goods and Services over the internet!Collection of Payment for Goods and Services over the internet!
Definitions of e-Commerce:
October, 2004 e-Commerce 101 13
Credit Card Payment Processing Concepts, Fee’s
and Security
October, 2004 e-Commerce 101 14
Payment Processing: Defined
On-Line Payment ProcessingOn-Line Payment ProcessingCoordinating the flow of secured transactions among a Coordinating the flow of secured transactions among a
complex network of processors and financial institutionscomplex network of processors and financial institutions
October, 2004 e-Commerce 101 15
Payment Processing: Components
Cardholder Issuing Bank
Cardholder / Customer
Processor
Credit Card Associations
¨
Settlement
Acquiring Bank
Payment Gateway
Merchant BankMerchant
October, 2004 e-Commerce 101 16
Payment Processing: Phases
AUTHORIZATIONAUTHORIZATION
andand
SETTLEMENTSETTLEMENT
October, 2004 e-Commerce 101 17
Payment Processing: Phases
Verifies that the card is activeVerifies that the card is active
AUTHORIZATIONAUTHORIZATION
Verifies Cardholder has creditVerifies Cardholder has creditCardholder’s Open-To-Buy is reducedCardholder’s Open-To-Buy is reduced
Collect Cardholder name – record keepingCollect Cardholder name – record keeping
October, 2004 e-Commerce 101 18
Payment Processing: Phases SETTLEMENTSETTLEMENT (Batch Deposit) (Batch Deposit)Capture authorizations in batchCapture authorizations in batch
Cardholder account is chargedCardholder account is charged
$$ deposited to Merchant Bank Acct$$ deposited to Merchant Bank Acct
October, 2004 e-Commerce 101 19
Putting it all together: Authorization
Cardholder / Customer
Payment Gateway
Processor
Cardholder Issuing Bank
ProcessorPayment Gateway
Merchant
Merchant
October, 2004 e-Commerce 101 20
Putting it all together: Settlement
Cardholder / Customer
Payment Gateway
Cardholder Issuing Bank
Processor
Acquiring Bank
Merchant Bank
Merchant
October, 2004 e-Commerce 101 21
Transaction Processing: Design Considerations
BankBank
ProcessorProcessorPayment Payment Gateway Gateway
(Verisign)(Verisign)
22 <Authorize><Authorize>22
Card Card Issuing Issuing BankBank
22
33
33
33
<Reconciliation>
““Checkout”Checkout”
<Web App><Web App>
ShopperShopper
ShopperShopper
ShopperShopper
11
Financial
System
Merchant Bank
(Deposit)
6
6
55 5555
<Settle><Settle>
5544 44
44
““Process Process Order”Order”
October, 2004 e-Commerce 101 22
Payment Processing: Fee
Bank Processing Fee StructureBank Processing Fee Structure
October, 2004 e-Commerce 101 23
Payment Processing: Fees
Application FeeApplication Fee
Discount RateDiscount Rate
Transaction FeesTransaction Fees
Monthly FeesMonthly Fees
Credit Card Associations
¨
Acquiring Bank
October, 2004 e-Commerce 101 24
Payment Processing: Security
Fraud and SecurityFraud and Security
October, 2004 e-Commerce 101 25
Payment Processing: Security
Visa CISPVisa CISP Cardholder Information Security ProgramCardholder Information Security Program
http://usa.visa.comhttp://usa.visa.com (Search: CISP) (Search: CISP)
Verified by Visa ProgramVerified by Visa Program
MasterCard Site Data Protection ServiceMasterCard Site Data Protection Service
¨
October, 2004 e-Commerce 101 26
Payment Processing: Fraud
Card Present vs. Card Not PresentCard Present vs. Card Not Present
Authorization vs. Address Verification (AVS)Authorization vs. Address Verification (AVS)
Card Verification Value (CVV)Card Verification Value (CVV)
Fraud Protection ProgramsFraud Protection Programs
October, 2004 e-Commerce 101 27
Payment Processing: Summary
Coordinating the flow of Coordinating the flow of secured transactions among a secured transactions among a complex network of processors complex network of processors and financial institutionsand financial institutions
October, 2004 e-Commerce 101 28
e-Commerce Web Applications….
October, 2004 e-Commerce 101 29
e-Commerce Web Applications Extension of Brick and Mortar…Extension of Brick and Mortar… Design Considerations…Design Considerations…
Navigation and Shopping Flow…Navigation and Shopping Flow… Home PageHome Page Registration / Logon / Address BkRegistration / Logon / Address Bk Category PageCategory Page Product PageProduct Page Shopping CartsShopping Carts
October, 2004 e-Commerce 101 30
e-Commerce Web Applications Order Processing …Order Processing …
Checkout…Checkout… PROCESS PAYMENT…PROCESS PAYMENT… Order AcknowledgementOrder Acknowledgement Customer ServiceCustomer ServiceSecurity and Privacy statement .. Security and Privacy statement ..
October, 2004 e-Commerce 101 31
e-Commerce Web Applications
On Line Store examples …On Line Store examples … Amazon…Amazon… LL Bean…LL Bean… U.S. Post Office…U.S. Post Office…Yukon Jack….Yukon Jack….
October, 2004 e-Commerce 101 32
Getting Started…
October, 2004 e-Commerce 101 33
Getting Started…..
Define your ObjectivesDefine your Objectives Identify ResourcesIdentify Resources
Select Bank Processing PartnersSelect Bank Processing Partners
Merchant BankMerchant Bank
Acquiring Bank/ProcessorAcquiring Bank/Processor
Payment GatewayPayment Gateway
Spring, 2004 e-Commerce 101 34
Getting Started: Gateway
Payment Gateway
ProcessorAcquiring
Bank
Web Site
Merchant
Direct ConnectDirect Connect
Spring, 2004 e-Commerce 101 35
Getting Started: Financial Partners
Payment Gateway
Payment GatewayPayment Gateway VeriSignVeriSign CyberSourceCyberSource SurePaySurePay NOVANOVA
VitalVital
PaymentechPaymentech First DataFirst Data
ProcessorAcquiring
Bank
Processor/BankProcessor/Bank
October, 2004 e-Commerce 101 36
Getting Started…..
Start Small….Start Small….
Architect your solution…Architect your solution…
See Resource list ….See Resource list ….
October, 2004 e-Commerce 101 37
e-Commerce at PSU:Administrative Information
Services (AIS)
October, 2004 e-Commerce 101 38
Turn your Web Applications into Gold with e-
Commerce….
October, 2004 e-Commerce 101 39
E-Commerce at PSU Collection of Payment for Goods and Services over the internet….Collection of Payment for Goods and Services over the internet….
Collection Methods for PSU includes Visa, MasterCard, Discover and Collection Methods for PSU includes Visa, MasterCard, Discover and American Express… American Express…
The Future….. The Future…..
October, 2004 e-Commerce 101 40
What does AIS provide?
FN07 Policy Credit Card Sales (Internet)FN07 Policy Credit Card Sales (Internet)
AIS provides Infrastructure: Hardware, AIS provides Infrastructure: Hardware, Software, Support ..Software, Support ..
AIS operates the PSU Central Payment AIS operates the PSU Central Payment Processing Server…Processing Server…
October, 2004 e-Commerce 101 41
What does AIS provide? Make life easier and more secure for PSU departments and customers….Make life easier and more secure for PSU departments and customers….
Provide Services to e-Commerce enable applicationsProvide Services to e-Commerce enable applicationsComply to VISA CISP ProgramComply to VISA CISP ProgramEliminate storing Credit Card numbers around PSU Eliminate storing Credit Card numbers around PSU
October, 2004 e-Commerce 101 42
History
1999 2000 2001 2002 2003 2004
October, 2004 e-Commerce 101 43
Who uses e-Commerce?
API - 15+ e-Commerce enabled Web Apps – APIAPI - 15+ e-Commerce enabled Web Apps – APIAdmissions, Registrar, Tuition, etc.Admissions, Registrar, Tuition, etc.
100+ e-Commerce Accounts 100+ e-Commerce Accounts (Merchants)…(Merchants)…
ePay – Virtual Credit Card TerminalePay – Virtual Credit Card Terminal
eStore – 12 Stores (30 events)eStore – 12 Stores (30 events)
October, 2004 e-Commerce 101 44
Purchase a transcript from the registrar’s office…Purchase a transcript from the registrar’s office…Pay Undergraduate and Graduate School admissions fees Pay Undergraduate and Graduate School admissions fees Apply payments to the Students Account via eLion (Parents and students)Apply payments to the Students Account via eLion (Parents and students)
…a Credit Card can be used at Penn State to…
October, 2004 e-Commerce 101 45
Make Donations to the Penn State Alumni department…Make Donations to the Penn State Alumni department…Apply points to the ID + meal plans Apply points to the ID + meal plans Pay your Penn State Fitness Pass fees Pay your Penn State Fitness Pass fees Purchase items from the Penn State Golf Store, Palmer Art Museum and Pennsylvania State Data Center…Purchase items from the Penn State Golf Store, Palmer Art Museum and Pennsylvania State Data Center…
…a Credit Card can be used at Penn State to…
October, 2004 e-Commerce 101 46
Pay registration fees for Conferences, Sport Camps, Scientific meetings, PASDC, College for Kids programs, and events…Pay registration fees for Conferences, Sport Camps, Scientific meetings, PASDC, College for Kids programs, and events…Order ‘Get Well’ and ‘All Occasion’ Gift baskets from Penn State food servicesOrder ‘Get Well’ and ‘All Occasion’ Gift baskets from Penn State food servicesPurchase DVD’s and other media from WPSX…Purchase DVD’s and other media from WPSX…
…a Credit Card can be used at Penn State to…
October, 2004 e-Commerce 101 47
…a Credit Card can be used at Penn State to…
Purchase meat from the Ag Sciences Meat lab…Purchase meat from the Ag Sciences Meat lab…Make Tuition payments at several commonwealth locations….Make Tuition payments at several commonwealth locations….Complete Housing and Food Service purchases …Complete Housing and Food Service purchases …Pay for Printing and Copy services at University Park…Pay for Printing and Copy services at University Park…
October, 2004 e-Commerce 101 48
PSU e-Commerce Services
ePay, Merchant Admin, ePay, Merchant Admin, API, and eStoreAPI, and eStore
October, 2004 e-Commerce 101 49
ePay
““Virtual” Credit Card Virtual” Credit Card TerminalTerminal
Replaces Bank Processor Replaces Bank Processor Leased MachineLeased Machine
Saves $$Saves $$ History ToolHistory Tool Secure, Easy to UseSecure, Easy to Use
October, 2004 e-Commerce 101 50
Merchant Admin
Provide Tools for:Provide Tools for: Generating / emailing receiptsGenerating / emailing receipts Issuing CreditsIssuing Credits ReportingReporting
October, 2004 e-Commerce 101 51
API’s
For calling Credit Card Payment For calling Credit Card Payment Services – Authorize and DepositServices – Authorize and Deposit
UP and Commonwealth Locations can UP and Commonwealth Locations can use to create their own e-Commerce use to create their own e-Commerce applicationsapplications
October, 2004 e-Commerce 101 52
Services: eStore Hosting
AIS provides “Framework” for Hosting AIS provides “Framework” for Hosting Penn State e-Commerce StoresPenn State e-Commerce Stores
Host the Website (Shopping Catalog)Host the Website (Shopping Catalog) Maintain hardware and softwareMaintain hardware and software
Handle Payment ProcessingHandle Payment Processing
Small departments ….Small departments ….
October, 2004 e-Commerce 101 53
Services: eStore Hosting
Home PageHome Page Product PageProduct Page CheckoutCheckout Order StatusOrder Status Shopping CartShopping Cart Help/FAQHelp/FAQ
October, 2004 e-Commerce 101 54
Other e-Commerce Services
e-Commerce Home Pagee-Commerce Home Pagehttp://ais.its.psu.edu/e-Commerce
e-Commerce Users Group (EUG)e-Commerce Users Group (EUG)
October, 2004 e-Commerce 101 55
Other e-Commerce Services
e-Commerce Statistics available to e-Commerce Statistics available to Financial OfficersFinancial Officers
ITS Training Seminar – “Getting ITS Training Seminar – “Getting Started with e-Commerce”Started with e-Commerce”Twice per semesterTwice per semester
October, 2004 e-Commerce 101 56
PSU e-Commerce Architecture
October, 2004 e-Commerce 101 57
WebSphere Commerce Components WebSphere Commerce Business WebSphere Commerce Business
Edition 5.5Edition 5.5 Payments 5.5Payments 5.5 DB2DB2 WAS 5.0WAS 5.0 I H S (Apache Web Server)I H S (Apache Web Server)
October, 2004 e-Commerce 101 58
WebSphere Commerce Components WebSphere Commerce Studio 5.0WebSphere Commerce Studio 5.0
JAVA / J2EEJAVA / J2EE JSP, EJB, etc.JSP, EJB, etc.
Commerce (eStore Hosting)Commerce (eStore Hosting) W2K W2K
October, 2004
e-Commerce Payment Architecture
““Checkout”Checkout”
<Web App><Web App>
StudentStudent
ShopperShopper
ePayePayAPIAPI
““Process Process Order”Order”
PSUPSU
PAY MGRPAY MGR
Cas
sett
eC
asse
tte
BankBank
Processor – AProcessor – A
Cas
sett
eC
asse
tte
ACHACH
Cas
sett
eC
asse
tte
BankBank
Processor – BProcessor – B
WebWeb
ServicesServices
WebWeb
ServicesServices
Business/Student Info SystemsBusiness/Student Info Systems
GatewayGatewayGatewayGateway
October, 2004 e-Commerce 101 60
e-Commerce Resources
October, 2004 e-Commerce 101 61
Resources - FT e-Commerce Consultant (Manager)e-Commerce Consultant (Manager) e-Commerce Consultant (Operations)e-Commerce Consultant (Operations) Developer (2 – Java/Asp)Developer (2 – Java/Asp)
DB2 Data base administratorDB2 Data base administrator Server Administration (W2K)Server Administration (W2K)
Resources - Supporting
October, 2004 e-Commerce 101 62
e-Commerce 101:
Outline Definition of e-Commerce.Definition of e-Commerce.
Credit card payment processing concepts, Credit card payment processing concepts, fee’s and security. fee’s and security.
e-Commerce Web Applications.e-Commerce Web Applications.
Getting Started.Getting Started.
e-Commerce at PSU (History, Services, e-Commerce at PSU (History, Services, Architecture) Architecture)
Q & AQ & A
October, 2004 e-Commerce 101 63
Q & A
http://ais.its.psu.edu/eCommercehttp://ais.its.psu.edu/eCommerce