Short introduction to some basics to know what's involved in e-commerce customer payments.

1. e-COMMERCE PAYMENTS
OVERVIEW

2. Hello!
I am Esteve Camps
I am here to introduce you to
e-Commerce Payments

3. What we will learn
■ The basics
■ Credit cards processing
■ Card fees journey
■ More to know

4. 1.
Basics
Let’s clarify some basic
terms

5. “
A payment system is any system used to
settle financial transactions through the
transfer of monetary value, and includes the
institutions, instruments, people, rules,
procedures, standards, and technologies
that make such an exchange possible.

6. “
An e-commerce payment system facilitates
the acceptance of electronic payment for
online transactions.

7. Credit cards
A payment card issued to
users (cardholders) to enable
the cardholder to pay a
merchant for goods and
services, based on the
cardholder's promise to the
card issuer to pay them for
the amounts so paid plus
other agreed charges.
APMs
(Acronym for Alternative Payment Method)
Refers to payment methods
that are used as an
alternative to credit card
payments, mostly of them
addressed to domestic
economies.
Common forms of payment for e-commerce transactions

8. https://pacnetservices.com/online-payment-methods-europe/ , July 2016
Some APMs in the World

9. CARD NOT PRESENT
(aka CNP) A payment card transaction made where the
cardholder does not or cannot physically present the card for
a merchant's visual examination at the time that an order is
given and payment effected.
Interesting for the future: NCP (non-card present)

10. 2.
Credit cards
processing
How credit cards process
works

11. Let’s review some concepts
Cardholder
A person who owns a credit card.
Card issuer
Who issues the card a customer holds.
Merchant
A merchant is a person or organization
who trades to earn a profit.
Acquirer
A bank or financial institution that
processes credit or debit card
payments on behalf of a merchant.
Card Scheme
Payment networks linked to payment
cards of which a bank or financial
institution can issue or acquire cards
operating on those networks.
PSP
A Payment Service Provider (PSP)
offers shops online services for
accepting electronic payments by a
variety of payment methods.

12. Credit card payment process flow
Four-party model
Cardholder
Merchant
Acquirer
Issuer
PSP
Scheme
1
2
2
3
3
4
4
5
5

13. Credit card payment process flow
Three-party model
Cardholder
Merchant
PSP
1 2
3
5
4
Issuer + Acquirer + Scheme

14. Types of transactions
■ Authorisation (aka pre-authorisation)
■ Capture
■ Sale
■ Refund
■ Cancel (or Void)

15. 3.
Card fees
journey
How charges what fees in a
credit card transaction

16. Card fees journey
Based on a four-party model
Cardholder
Merchant
Acquirer
Issuer
PSP
Scheme
1. 100$
2. 100$ ??
2. 100$ ??
3. 100$ ??
3. 100$ ??
4. Pay 98.20$
✔
4. Pay 98.09$
✔
5. Pay 97.76$
✔
5. Pay 97.70$
✔
4. Credit
cardholder
100$ ✔

17. Brand ??
Type /
Subtype ??
Interchange cost determination
Level ??
Category ??
Distance ??

18. 4.
More to know
You should know that ...

19. You should know that...
… Liability shift means that the liability
for the chargeback loss shifts from the
merchant to the issuing bank, for
e-commerce transactions that are
deemed fraudulent.
The issuing bank, in most cases, is no
longer allowed to pass such chargebacks
back to the merchant.

20. You should know that...
… MOTO, or Mail Order/Telephone Order,
is a type of CNP transaction in which
services are paid for and delivered via
telephone, mail, fax, or internet.

21. You should know that...
… a Chargeback occurs when a customer
formally disputes a charge by contacting the
issuer of the credit card. Customers usually
dispute charges if they do not recognize the
amount or business making the charge, or if
they disagree with the transaction.

22. And last but not least ...
Service fee Interchange fee
Cross-border fee FX rate

23. Thanks for your attention!
Q& A