E Commerce Payment

Topics: Electronic commerce, Credit card, Payment gateway Pages: 10 (2745 words) Published: March 8, 2011
An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as financial electronic data interchange (FEDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet based shopping and banking.   A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateway protects credit cards details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor.     A payment gateway facilitates the transfer of information between a payment portal (such as a website, mobile phone or IVR

PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders.On October 3, 2002, PayPal became a wholly owned subsidiary of eBay.Currently PayPal operates in 190 markets,and it manages over 175 million accounts (70 million active accounts). PayPal allows customers to send, receive, and hold funds in 19 currencies worldwide. PayPal operates locally in 13 countries. Residents in 190 markets can use PayPal in their local markets to send money online.

VeriSign Inc. is the leading provider of digital trust services that enable everyone everywhere to engage in commerce and communications with confidence. VeriSign’s digital trust services create a trusted environment through four core offerings - Web presence services,telecommunications services, security services and payment services. Sign was founded in 1995 as a spin-off of the RSA Security certification services business.The new company served as a certificate authority (CA) — a role it still fulfills --and its initial mission was "providing trust for the Internet and Electronic Commerce through our Digital Authentication services and products." VeriSign now has more than 3,000,000 certificates.It is the largest CA behind the encryption and authentication on the Internet. According to VeriSign, its payment gateway processed over $40 billion in payments in 2004. VeriSign is well known for the VeriSign Secured Seal, which is an outward expression of a Web site's authentication and encryption commonly posted to VeriSign SSL Certificate customers' Web sites.

Auction giant eBay acquired VeriSign's payment gateway business as part of a broad strategic alliance between the two companies.eBay's PayPal paid approximately $370 million in cash and/or eBay stock for the VeriSign unit.VeriSign's payment gateway business merged with PayPal's merchant services platform.The combined unit is expected with an incremental $100 million of revenue at a 20 percent pro forma operating margin The move is likely to bolster PayPal's drive to attract more e-commerce merchants to its payment processing services.In addition to PayPal's acquisition of VeriSign's gateway business, eBay also agreed to a multi-year security technology agreement that will see eBay investing in VeriSign's payment security solutions. Among those solutions is two-factor authentication.

Paypal merchant accounts are easier to set up than most other merchant accounts. Paypal has no fixed costs and offers a similar product with slightly higher transaction fees. But this difference in transaction fees is only $.05 per transaction. With such a small difference, Paypal is still a bargain up until around 1000 transactions per month. At this point (1000+ transactions) the Versign "per transaction fee" drops to $.10 per transaction and makes Verisign's fee structure more appealing. Paypal has always had a very fair deal going ever since they launched in 1998,...
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