e-Commerce 101
FACT OR  FICTION  ??? <ul><li>VISA processed 5,200 credit card transactions per minute this past Holiday Season? </li></ul...
Introduction ….
FACT OR  FICTION  ??? <ul><li>VISA processed 5,200 credit card transactions per minute this past Holiday Season? </li></ul...
FACT OR  FICTION  ??? <ul><li>The first ATM machine was developed in 1939? </li></ul><ul><li>FACT: Luther George Simjiian ...
FACT OR  FICTION  ??? <ul><li>The first Universal Credit Card for use in restaurants was issued in 1930? </li></ul><ul><li...
e-Commerce 101: Course Objective We will provide an overview of electronic credit card payment processing concepts, archit...
e-Commerce 101: Outline <ul><li>Definition of e-Commerce. </li></ul><ul><li>Credit card payment processing concepts, fee’s...
e-Commerce Definitions…
Definitions of e-Commerce… <ul><li>ON-LINE Perspective: </li></ul><ul><ul><li>The buying and selling of products and servi...
Definitions of e-Commerce: <ul><li>BUSINESS PROCESS Perspective: </li></ul><ul><ul><li>The application of technology towar...
Definitions of e-Commerce: <ul><li>Presentation’s perspective: </li></ul><ul><ul><li>The process of providing the capabili...
Credit Card Payment Processing Concepts, Fee’s and Security
Payment Processing: Defined  <ul><li>On-Line Payment Processing </li></ul><ul><ul><li>Coordinating the flow of secured tra...
Payment Processing: Components AUTHORIZE... Cardholder Issuing Bank Cardholder / Customer Processor Credit Card Associatio...
Payment Processing: Phases  AUTHORIZATION and SETTLEMENT
Payment Processing: Phases  <ul><ul><li>Verifies that the card is active </li></ul></ul><ul><li>AUTHORIZATION </li></ul><u...
Payment Processing: Phases  <ul><li>SETTLEMENT  (Batch Deposit) </li></ul><ul><ul><li>Capture authorizations in batch </li...
Putting it all together: Authorization Cardholder / Customer Payment Gateway Processor Cardholder Issuing Bank Processor P...
Putting it all together: Settlement Cardholder / Customer Payment Gateway Cardholder Issuing Bank Processor Acquiring Bank...
Transaction Processing: Design Considerations <Reconciliation> Bank Processor Payment Gateway (Verisign) 2 <Authorize> 2 C...
Payment Processing: Fee  Bank Processing Fee Structure
Payment Processing: Fees <ul><li>Application Fee </li></ul><ul><li>Discount Rate </li></ul><ul><li>Transaction Fees </li><...
Payment Processing: Security  Fraud and Security
Payment  Processing : Security <ul><li>Visa CISP </li></ul><ul><ul><li>Cardholder Information Security Program </li></ul><...
Payment Processing: Fraud <ul><li>Card Present vs. Card Not Present </li></ul><ul><li>Authorization vs. Address Verificati...
Payment Processing: Summary <ul><li>Coordinating the flow of secured transactions among a complex network of processors an...
e-Commerce Web Applications….
e-Commerce Web Applications <ul><li>Extension of Brick and Mortar… </li></ul><ul><li>Design Considerations… </li></ul><ul>...
e-Commerce Web Applications <ul><li>Order Processing … </li></ul><ul><ul><li>Checkout… </li></ul></ul><ul><ul><li>PROCESS ...
e-Commerce Web Applications <ul><li>On Line Store examples … </li></ul><ul><ul><li>Amazon… </li></ul></ul><ul><ul><li>LL B...
Getting Started…
Getting Started….. <ul><li>Define your Objectives </li></ul><ul><li>Identify Resources </li></ul><ul><li>Select Bank Proce...
Getting Started: Gateway Direct Connect Payment Gateway Processor Acquiring Bank Web Site Merchant
Getting Started: Financial Partners Payment Gateway <ul><li>Payment Gateway </li></ul><ul><ul><li>VeriSign </li></ul></ul>...
Getting Started….. <ul><li>Start Small…. </li></ul><ul><li>Architect your solution… </li></ul><ul><li>See Resource list …....
e-Commerce at PSU: Administrative Information Services (AIS)
Turn your Web  Applications into  Gold  with e-Commerce….
E-Commerce at PSU <ul><li>Collection of Payment for Goods and Services over the internet…. </li></ul><ul><li>Collection Me...
What does AIS provide? <ul><li>FN07 Policy Credit Card Sales (Internet) </li></ul><ul><li>AIS provides Infrastructure: Har...
What does AIS provide? <ul><li>Make life easier and more secure for PSU departments and customers…. </li></ul><ul><ul><li>...
History
Who uses e-Commerce? <ul><li>API - 15+ e-Commerce enabled Web Apps – API </li></ul><ul><ul><li>Admissions, Registrar, Tuit...
<ul><ul><li>Purchase a transcript from the registrar’s office… </li></ul></ul><ul><ul><li>Pay Undergraduate and Graduate S...
<ul><ul><li>Make Donations to the Penn State Alumni department… </li></ul></ul><ul><ul><li>Apply points to the ID + meal p...
<ul><ul><li>Pay registration fees for Conferences, Sport Camps, Scientific meetings, PASDC,  College for Kids programs, an...
… a Credit Card can be used at Penn State to… <ul><ul><li>Purchase meat from the Ag Sciences Meat lab… </li></ul></ul><ul>...
PSU e-Commerce Services ePay, Merchant Admin, API, and eStore
ePay <ul><li>“ Virtual” Credit Card Terminal </li></ul><ul><li>Replaces Bank Processor Leased  Machine </li></ul><ul><li>S...
Merchant Admin <ul><li>Provide Tools for: </li></ul><ul><ul><li>Generating / emailing receipts </li></ul></ul><ul><ul><li>...
API’s <ul><li>For calling Credit Card Payment Services – Authorize and Deposit </li></ul><ul><li>UP and Commonwealth Locat...
Services: eStore Hosting <ul><li>AIS provides “Framework” for Hosting Penn State e-Commerce Stores </li></ul><ul><li>Host ...
Services: eStore Hosting <ul><ul><li>Home Page </li></ul></ul><ul><ul><li>Product Page </li></ul></ul><ul><ul><li>Checkout...
Other e-Commerce Services <ul><li>e-Commerce Home Page </li></ul><ul><ul><li>http://ais.its.psu.edu/e-Commerce   </li></ul...
Other e-Commerce Services <ul><li>e-Commerce Statistics available to Financial Officers </li></ul><ul><li>ITS Training Sem...
PSU e-Commerce Architecture
WebSphere Commerce Components <ul><li>WebSphere Commerce Business Edition 5.5 </li></ul><ul><ul><li>Payments 5.5 </li></ul...
WebSphere Commerce Components <ul><li>WebSphere Commerce Studio 5.0 </li></ul><ul><ul><li>JAVA / J2EE </li></ul></ul><ul><...
e-Commerce Payment Architecture “ Checkout” <Web App> Student Shopper ePay API “ Process Order” Gateway PSU PAY MGR Casset...
e-Commerce Resources
Resources - FT <ul><li>e-Commerce Consultant (Manager) </li></ul><ul><li>e-Commerce Consultant (Operations) </li></ul><ul>...
e-Commerce 101: Outline <ul><li>Definition of e-Commerce. </li></ul><ul><li>Credit card payment processing concepts, fee’s...
Q & A http://ais.its.psu.edu/eCommerce
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    1. 1. e-Commerce 101
    2. 2. FACT OR FICTION ??? <ul><li>VISA processed 5,200 credit card transactions per minute this past Holiday Season? </li></ul><ul><li>The first ATM machine was developed in 1939? </li></ul><ul><li>The first Universal Credit Card for use in restaurants was issued in 1930? </li></ul>
    3. 3. Introduction ….
    4. 4. FACT OR FICTION ??? <ul><li>VISA processed 5,200 credit card transactions per minute this past Holiday Season? </li></ul><ul><li>FICTION: VISA processed over 5,200 transactions PER SECOND this past Holiday Season! </li></ul>
    5. 5. FACT OR FICTION ??? <ul><li>The first ATM machine was developed in 1939? </li></ul><ul><li>FACT: Luther George Simjiian patented, the Bankamatic, a not so workable version of today’s ATM . </li></ul>
    6. 6. FACT OR FICTION ??? <ul><li>The first Universal Credit Card for use in restaurants was issued in 1930? </li></ul><ul><li>FICTION: In 1950, Frank McNamara, the founder of Diners’ Club, is credited with having invented the first universal credit card for use in restaurants in 1950. </li></ul>
    7. 7. e-Commerce 101: Course Objective We will provide an overview of electronic credit card payment processing concepts, architecture, experiences, partners, internal resources, and the eCommerce services we provide.
    8. 8. e-Commerce 101: Outline <ul><li>Definition of e-Commerce. </li></ul><ul><li>Credit card payment processing concepts, fee’s and security. </li></ul><ul><li>e-Commerce Web Applications. </li></ul><ul><li>Getting Started. </li></ul><ul><li>e-Commerce at PSU (History, Services, Architecture) </li></ul><ul><li>Q & A </li></ul>
    9. 9. e-Commerce Definitions…
    10. 10. Definitions of e-Commerce… <ul><li>ON-LINE Perspective: </li></ul><ul><ul><li>The buying and selling of products and services by businesses and consumers over the internet. </li></ul></ul><ul><li>COMMUNICATION Perspective: </li></ul><ul><ul><li>The delivery of information, products/services, or payments via Telephone lines, computer networks, or any other means </li></ul></ul>
    11. 11. Definitions of e-Commerce: <ul><li>BUSINESS PROCESS Perspective: </li></ul><ul><ul><li>The application of technology toward the automation of business transactions and workflows. </li></ul></ul><ul><li>BUSINESS SERVICE Perspective: </li></ul><ul><ul><li>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. </li></ul></ul>
    12. 12. Definitions of e-Commerce: <ul><li>Presentation’s perspective: </li></ul><ul><ul><li>The process of providing the capability of buying and selling products and information on the Internet and other on-line services …. </li></ul></ul><ul><ul><ul><ul><ul><li>OR SIMPLY STATED </li></ul></ul></ul></ul></ul><ul><ul><li>Collection of Payment for Goods and Services over the internet! </li></ul></ul>
    13. 13. Credit Card Payment Processing Concepts, Fee’s and Security
    14. 14. Payment Processing: Defined <ul><li>On-Line Payment Processing </li></ul><ul><ul><li>Coordinating the flow of secured transactions among a complex network of processors and financial institutions </li></ul></ul>
    15. 15. Payment Processing: Components AUTHORIZE... Cardholder Issuing Bank Cardholder / Customer Processor Credit Card Associations Settlement Acquiring Bank Payment Gateway Merchant Bank Merchant
    16. 16. Payment Processing: Phases AUTHORIZATION and SETTLEMENT
    17. 17. Payment Processing: Phases <ul><ul><li>Verifies that the card is active </li></ul></ul><ul><li>AUTHORIZATION </li></ul><ul><ul><li>Verifies Cardholder has credit </li></ul></ul><ul><ul><li>Cardholder’s Open-To-Buy is reduced </li></ul></ul><ul><ul><li>Collect Cardholder name – record keeping </li></ul></ul>
    18. 18. Payment Processing: Phases <ul><li>SETTLEMENT (Batch Deposit) </li></ul><ul><ul><li>Capture authorizations in batch </li></ul></ul><ul><ul><li>Cardholder account is charged </li></ul></ul><ul><ul><li>$$ deposited to Merchant Bank Acct </li></ul></ul>
    19. 19. Putting it all together: Authorization Cardholder / Customer Payment Gateway Processor Cardholder Issuing Bank Processor Payment Gateway Merchant Merchant
    20. 20. Putting it all together: Settlement Cardholder / Customer Payment Gateway Cardholder Issuing Bank Processor Acquiring Bank Merchant Bank Merchant
    21. 21. Transaction Processing: Design Considerations <Reconciliation> Bank Processor Payment Gateway (Verisign) 2 <Authorize> 2 Card Issuing Bank 2 3 3 3 “ Checkout” <Web App> Shopper Shopper Shopper 1 Financial System Merchant Bank (Deposit) 6 6 5 5 5 <Settle> 5 4 4 4 “ Process Order”
    22. 22. Payment Processing: Fee Bank Processing Fee Structure
    23. 23. Payment Processing: Fees <ul><li>Application Fee </li></ul><ul><li>Discount Rate </li></ul><ul><li>Transaction Fees </li></ul><ul><li>Monthly Fees </li></ul>Credit Card Associations Acquiring Bank
    24. 24. Payment Processing: Security Fraud and Security
    25. 25. Payment Processing : Security <ul><li>Visa CISP </li></ul><ul><ul><li>Cardholder Information Security Program </li></ul></ul><ul><ul><ul><li>http://usa.visa.com (Search: CISP) </li></ul></ul></ul><ul><ul><li>Verified by Visa Program </li></ul></ul><ul><li>MasterCard Site Data Protection Service </li></ul>
    26. 26. Payment Processing: Fraud <ul><li>Card Present vs. Card Not Present </li></ul><ul><li>Authorization vs. Address Verification (AVS) </li></ul><ul><li>Card Verification Value (CVV) </li></ul><ul><li>Fraud Protection Programs </li></ul>
    27. 27. Payment Processing: Summary <ul><li>Coordinating the flow of secured transactions among a complex network of processors and financial institutions </li></ul>
    28. 28. e-Commerce Web Applications….
    29. 29. e-Commerce Web Applications <ul><li>Extension of Brick and Mortar… </li></ul><ul><li>Design Considerations… </li></ul><ul><ul><li>Navigation and Shopping Flow… </li></ul></ul><ul><ul><li>Home Page </li></ul></ul><ul><ul><li>Registration / Logon / Address Bk </li></ul></ul><ul><ul><li>Category Page </li></ul></ul><ul><ul><li>Product Page </li></ul></ul><ul><ul><li>Shopping Carts </li></ul></ul>
    30. 30. e-Commerce Web Applications <ul><li>Order Processing … </li></ul><ul><ul><li>Checkout… </li></ul></ul><ul><ul><li>PROCESS PAYMENT… </li></ul></ul><ul><ul><li>Order Acknowledgement </li></ul></ul><ul><ul><li>Customer Service </li></ul></ul><ul><ul><li>Security and Privacy statement .. </li></ul></ul>
    31. 31. e-Commerce Web Applications <ul><li>On Line Store examples … </li></ul><ul><ul><li>Amazon… </li></ul></ul><ul><ul><li>LL Bean… </li></ul></ul><ul><ul><li>U.S. Post Office… </li></ul></ul><ul><ul><li>Yukon Jack…. </li></ul></ul>
    32. 32. Getting Started…
    33. 33. Getting Started….. <ul><li>Define your Objectives </li></ul><ul><li>Identify Resources </li></ul><ul><li>Select Bank Processing Partners </li></ul><ul><ul><li>Merchant Bank </li></ul></ul><ul><ul><li>Acquiring Bank/Processor </li></ul></ul><ul><ul><li>Payment Gateway </li></ul></ul>
    34. 34. Getting Started: Gateway Direct Connect Payment Gateway Processor Acquiring Bank Web Site Merchant
    35. 35. Getting Started: Financial Partners Payment Gateway <ul><li>Payment Gateway </li></ul><ul><ul><li>VeriSign </li></ul></ul><ul><ul><li>CyberSource </li></ul></ul><ul><ul><li>SurePay </li></ul></ul><ul><ul><li>NOVA </li></ul></ul><ul><ul><li>Vital </li></ul></ul><ul><ul><li>Paymentech </li></ul></ul><ul><ul><li>First Data </li></ul></ul>Processor Acquiring Bank <ul><li>Processor/Bank </li></ul>
    36. 36. Getting Started….. <ul><li>Start Small…. </li></ul><ul><li>Architect your solution… </li></ul><ul><li>See Resource list …. </li></ul>
    37. 37. e-Commerce at PSU: Administrative Information Services (AIS)
    38. 38. Turn your Web Applications into Gold with e-Commerce….
    39. 39. E-Commerce at PSU <ul><li>Collection of Payment for Goods and Services over the internet…. </li></ul><ul><li>Collection Methods for PSU includes Visa, MasterCard, Discover and American Express… </li></ul><ul><li>The Future….. </li></ul>
    40. 40. What does AIS provide? <ul><li>FN07 Policy Credit Card Sales (Internet) </li></ul><ul><li>AIS provides Infrastructure: Hardware, Software, Support .. </li></ul><ul><li>AIS operates the PSU Central Payment Processing Server… </li></ul>
    41. 41. What does AIS provide? <ul><li>Make life easier and more secure for PSU departments and customers…. </li></ul><ul><ul><li>Provide Services to e-Commerce enable applications </li></ul></ul><ul><ul><li>Comply to VISA CISP Program </li></ul></ul><ul><ul><li>Eliminate storing Credit Card numbers around PSU </li></ul></ul>
    42. 42. History
    43. 43. Who uses e-Commerce? <ul><li>API - 15+ e-Commerce enabled Web Apps – API </li></ul><ul><ul><li>Admissions, Registrar, Tuition, etc. </li></ul></ul><ul><li>100+ e-Commerce Accounts (Merchants)… </li></ul><ul><li>ePay – Virtual Credit Card Terminal </li></ul><ul><li>eStore – 12 Stores (30 events) </li></ul>
    44. 44. <ul><ul><li>Purchase a transcript from the registrar’s office… </li></ul></ul><ul><ul><li>Pay Undergraduate and Graduate School admissions fees </li></ul></ul><ul><ul><li>Apply payments to the Students Account via eLion (Parents and students) </li></ul></ul>… a Credit Card can be used at Penn State to…
    45. 45. <ul><ul><li>Make Donations to the Penn State Alumni department… </li></ul></ul><ul><ul><li>Apply points to the ID + meal plans </li></ul></ul><ul><ul><li>Pay your Penn State Fitness Pass fees </li></ul></ul><ul><ul><li>Purchase items from the Penn State Golf Store, Palmer Art Museum and Pennsylvania State Data Center… </li></ul></ul>… a Credit Card can be used at Penn State to…
    46. 46. <ul><ul><li>Pay registration fees for Conferences, Sport Camps, Scientific meetings, PASDC, College for Kids programs, and events… </li></ul></ul><ul><ul><li>Order ‘Get Well’ and ‘All Occasion’ Gift baskets from Penn State food services </li></ul></ul><ul><ul><li>Purchase DVD’s and other media from WPSX… </li></ul></ul>… a Credit Card can be used at Penn State to…
    47. 47. … a Credit Card can be used at Penn State to… <ul><ul><li>Purchase meat from the Ag Sciences Meat lab… </li></ul></ul><ul><ul><li>Make Tuition payments at several commonwealth locations…. </li></ul></ul><ul><ul><li>Complete Housing and Food Service purchases … </li></ul></ul><ul><ul><li>Pay for Printing and Copy services at University Park… </li></ul></ul>
    48. 48. PSU e-Commerce Services ePay, Merchant Admin, API, and eStore
    49. 49. ePay <ul><li>“ Virtual” Credit Card Terminal </li></ul><ul><li>Replaces Bank Processor Leased Machine </li></ul><ul><li>Saves $$ </li></ul><ul><li>History Tool </li></ul><ul><li>Secure, Easy to Use </li></ul>
    50. 50. Merchant Admin <ul><li>Provide Tools for: </li></ul><ul><ul><li>Generating / emailing receipts </li></ul></ul><ul><ul><li>Issuing Credits </li></ul></ul><ul><ul><li>Reporting </li></ul></ul>
    51. 51. API’s <ul><li>For calling Credit Card Payment Services – Authorize and Deposit </li></ul><ul><li>UP and Commonwealth Locations can use to create their own e-Commerce applications </li></ul>
    52. 52. Services: eStore Hosting <ul><li>AIS provides “Framework” for Hosting Penn State e-Commerce Stores </li></ul><ul><li>Host the Website (Shopping Catalog) </li></ul><ul><ul><li>Maintain hardware and software </li></ul></ul><ul><li>Handle Payment Processing </li></ul><ul><li>Small departments …. </li></ul>
    53. 53. Services: eStore Hosting <ul><ul><li>Home Page </li></ul></ul><ul><ul><li>Product Page </li></ul></ul><ul><ul><li>Checkout </li></ul></ul><ul><ul><li>Order Status </li></ul></ul><ul><ul><li>Shopping Cart </li></ul></ul><ul><ul><li>Help/FAQ </li></ul></ul>
    54. 54. Other e-Commerce Services <ul><li>e-Commerce Home Page </li></ul><ul><ul><li>http://ais.its.psu.edu/e-Commerce </li></ul></ul><ul><li>e-Commerce Users Group (EUG) </li></ul>
    55. 55. Other e-Commerce Services <ul><li>e-Commerce Statistics available to Financial Officers </li></ul><ul><li>ITS Training Seminar – “Getting Started with e-Commerce” </li></ul><ul><ul><li>Twice per semester </li></ul></ul>
    56. 56. PSU e-Commerce Architecture
    57. 57. WebSphere Commerce Components <ul><li>WebSphere Commerce Business Edition 5.5 </li></ul><ul><ul><li>Payments 5.5 </li></ul></ul><ul><ul><li>DB2 </li></ul></ul><ul><ul><li>WAS 5.0 </li></ul></ul><ul><ul><li>I H S (Apache Web Server) </li></ul></ul>
    58. 58. WebSphere Commerce Components <ul><li>WebSphere Commerce Studio 5.0 </li></ul><ul><ul><li>JAVA / J2EE </li></ul></ul><ul><ul><li>JSP, EJB, etc. </li></ul></ul><ul><li>Commerce (eStore Hosting) </li></ul><ul><li>W2K </li></ul>
    59. 59. e-Commerce Payment Architecture “ Checkout” <Web App> Student Shopper ePay API “ Process Order” Gateway PSU PAY MGR Cassette Bank Processor – A Cassette ACH Cassette Bank Processor – B Web Services Business/Student Info Systems
    60. 60. e-Commerce Resources
    61. 61. Resources - FT <ul><li>e-Commerce Consultant (Manager) </li></ul><ul><li>e-Commerce Consultant (Operations) </li></ul><ul><li>Developer (2 – Java/Asp) </li></ul><ul><li>DB2 Data base administrator </li></ul><ul><li>Server Administration (W2K) </li></ul>Resources - Supporting
    62. 62. e-Commerce 101: Outline <ul><li>Definition of e-Commerce. </li></ul><ul><li>Credit card payment processing concepts, fee’s and security. </li></ul><ul><li>e-Commerce Web Applications. </li></ul><ul><li>Getting Started. </li></ul><ul><li>e-Commerce at PSU (History, Services, Architecture) </li></ul><ul><li>Q & A </li></ul>
    63. 63. Q & A http://ais.its.psu.edu/eCommerce

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