3. Smart cards.
A smart card, chip card, or integrated circuit card (ICC) is any pocket-sized card with embedded integrated circuits. Smart cards are made of plastic, generally polyvinyl chloride, but sometimes polyethylene terephthalate based polyesters, acrylonitrile butadiene styrene or polycarbonate.
Smart cards can provide identification, authentication, data storage and application processing. Smart cards may provide strong security authentication for single sign-on (SSO) within large organizations
Types of smart cards:
Contact smart cards
Contact smart cards have a contact area of approximately 1 square centimeter (0.16 sq in), comprising several gold-plated contact pads. These pads provide electrical connectivity when inserted into a reader,[8] which is used as a communications medium between the smart card and a host (e.g., a computer, a point of sale terminal) or a mobile telephone. Cards do not contain batteries; power is supplied by the card reader
Contactless smart cards
A second card type is the contactless smart card, in which the card communicates with and is powered by the reader through RF induction technology. These cards require only proximity to an antenna to communicate. Like smart cards with contacts, contactless cards do not have an internal power source. Instead, they use an inductor 'to capture some of the incident radio-frequency interrogation signal, rectify it, and use it to power the card's electronics
Example of widely used contactless smart cards are London's Oyster card, Hong Kong's Octopus card, Tokyo's Suica and Pasmo cards used for public transportation
Example of widely used contactless smart cards are London's Oyster card, Hong Kong's Octopus card, Tokyo's Suica and Pasmo cards used for public transportation
Smart Cards and Electronic Commerce:
Smart cards are turning out to be a fundamental piece of the transformation of retailing into electronic commerce. The impressive growth of the Internet is making electronic shopping at least a real possibility, if not a habit, among computer users. However, the business model used in current electronic commerce applications still cannot enjoy the full potential of the electronic medium. Moreover, concerns about the reliability of an invisible counterpart and about the safety of the Internet for credit card information increase the wariness and thereby limit the use of the electronic shopping on the part of customers.
Of the estimated 360 billion payments that took place in the United States in 1995, approximately 300 billion could not have taken place using the existing electronic media. Such transactions involved micro-payments p; i.e. payments for less than $10 p; which are virtually outside of the electronic arena for lack of a payment method compatible with such low amounts. Credit cards or checks are simply too expensive to use for micro-payments, and the e-cash currently being experimented on the World Wide Web does not seem to have the characteristics to appeal to shoppers. For this reason, smart cards could be a fundamental building block of widespread use of electronic commerce, since they are an instrument to pay at a low cost for transactions involving small amounts of money.
Another big advantage of smart cards for electronic commerce is their use for the customization of services. It is already possible to purchase tailored services on the World Wide Web p; MyYahoo and FireFly are well known examples. However, in order for the service supplier to deliver the customized service, the user has to provide each supplier with her profile p; a boring and time consuming activity. A smart card can contain a non-encrypted profile of the bearer, so that the user can get customized services even without previous contacts with the supplier.
Finally, smart cards are a key technology enabler for financial institutions. The processing power, the portability and the interactive properties of smart cards will constitute the basis for a revolution in the relationship between consumers and banks. PC-based home banking and phone banking will give way to card banking: a phone equipped with a smart card reader will be all that is needed for any kind of transaction.
Of the estimated 360 billion payments that took place in the United States in 1995, approximately 300 billion could not have taken place using the existing electronic media. Such transactions involved micro-payments p; i.e. payments for less than $10 p; which are virtually outside of the electronic arena for lack of a payment method compatible with such low amounts. Credit cards or checks are simply too expensive to use for micro-payments, and the e-cash currently being experimented on the World Wide Web does not seem to have the characteristics to appeal to shoppers. For this reason, smart cards could be a fundamental building block of widespread use of electronic commerce, since they are an instrument to pay at a low cost for transactions involving small amounts of money.
Another big advantage of smart cards for electronic commerce is their use for the customization of services. It is already possible to purchase tailored services on the World Wide Web p; MyYahoo and FireFly are well known examples. However, in order for the service supplier to deliver the customized service, the user has to provide each supplier with her profile p; a boring and time consuming activity. A smart card can contain a non-encrypted profile of the bearer, so that the user can get customized services even without previous contacts with the supplier.
Finally, smart cards are a key technology enabler for financial institutions. The processing power, the portability and the interactive properties of smart cards will constitute the basis for a revolution in the relationship between consumers and banks. PC-based home banking and phone banking will give way to card banking: a phone equipped with a smart card reader will be all that is needed for any kind of transaction.
Credit Cards and Smart Cards have become the most common forms of payment for e-commerce transactions. In North America almost 90% of online B2C transactions were made with this payment type. Now a days, to decrease the risk of fraud, more security steps are being taken by the government and banks to increase the use of plastic money, such as the use of the card verification number (CVN) which detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder’s issuing bank.
A Smart card is similar to a credit card a popular smart card initiative is the VISA Smart card. Using the VISA Smart card you can transfer electronic cash to your card from your bank account, and you can then use your card at various retailers and on the internet.
Online payment options:
There are more online payment options than ever before and as an online entrepreneur, you want to offer as many as you can on your site.
A study by CyberSource Corp. found that websites providing four or more payment methods other than credit cards had a sales conversion rate 12 percent higher than those offering just one online payment option in addition to credit cards.
In other words, the more online payment options you offer, the more online payment processing you'll do on your site and the more money you'll make.
Here are the online payment options you could offer on your site:
1) Credit card processing
If you were only going to offer one online payment option to prospective buyers, this would be the one to choose. Credit cards are still the most popular way to pay for goods and services online.
To set up credit card processing on your website, (MasterCard, Visa, American Express, Discover), you need to get an Internet merchant account.
You can get an Internet merchant account through your local banks. Notice I say banks; to get credit card processing of all the major credit cards on your website you may need to get Internet merchant accounts with two separate banks as many banks only deal with some of the credit cards involved.
You can also get an Internet merchant account through a third party merchant account provider, such as Beanstream, Moneris, PSiGate or InternetSecure.
The advantages of getting an Internet merchant account through a third party merchant account provider are that most don't require any security deposits (unlike banks), are quickly set up, and often can be bundled with ecommerce service packages that include the Internet gateway you need for online credit card processing (Web point-of-sale) and a shopping cart.
The disadvantage is higher fees. Discount fees in particular tend to be higher than if you had set up your Internet merchant accounts through the banks.
Wherever you get your Internet merchant account, you will have to also purchase an Internet gateway service. The gateway verifies information, transfers requests and authorizes credit cards in real time. All four of the companies I've mentioned above offer these credit card processing services as well, but there are many others that do too – including PayPal.
To set up credit card processing on your website, (MasterCard, Visa, American Express, Discover), you need to get an Internet merchant account.
You can get an Internet merchant account through your local banks. Notice I say banks; to get credit card processing of all the major credit cards on your website you may need to get Internet merchant accounts with two separate banks as many banks only deal with some of the credit cards involved.
You can also get an Internet merchant account through a third party merchant account provider, such as Beanstream, Moneris, PSiGate or InternetSecure.
The advantages of getting an Internet merchant account through a third party merchant account provider are that most don't require any security deposits (unlike banks), are quickly set up, and often can be bundled with ecommerce service packages that include the Internet gateway you need for online credit card processing (Web point-of-sale) and a shopping cart.
The disadvantage is higher fees. Discount fees in particular tend to be higher than if you had set up your Internet merchant accounts through the banks.
Wherever you get your Internet merchant account, you will have to also purchase an Internet gateway service. The gateway verifies information, transfers requests and authorizes credit cards in real time. All four of the companies I've mentioned above offer these credit card processing services as well, but there are many others that do too – including PayPal.
2) PayPal
PayPal is now also an all-in-one online payment solution. Their Website Payments Standard program lets you accept Visa, MasterCard, Discover, and American Express credit card payments as well as bank transfers and offer PayPal as well – with no monthly fees, setup or cancellation fees. PayPal charges you a fee of 1.9 to 2.9 percent of transaction plus 30 cents per order, depending on your company's sales volume.
PayPal also offers an upgraded version of Website Payments Standard called Website Payments Pro, where customers check out right on your site rather than on PayPal's (currently available only in the U.S.).
They also offer a PayFlow Gateway and PayPal Express Checkout for businesses that already have Internet merchant accounts.
PayPal also offers an upgraded version of Website Payments Standard called Website Payments Pro, where customers check out right on your site rather than on PayPal's (currently available only in the U.S.).
They also offer a PayFlow Gateway and PayPal Express Checkout for businesses that already have Internet merchant accounts.
3) Debit Cards
The debit card is the preferred method of payment for one out of two Canadians and there are more than 35 million debit cards in circulation in Canada, according to the Interac Association. In 2006, Canadians made more than three billion Interac Direct Payment transactions worth $148 billion and the number of debit card payments grows about five per cent every year in Canada.
With numbers like that, this is an online payment option you definitely want to offer your customers if you’re selling online.
Interac Online is one option that allows your customers to pay for goods and services online directly from their bank accounts. It's convenient and secure for customers because they don't have to share any of their card numbers or financial details when making a purchase; payment is completed through their own financial institutions.
To start offering Interac Online on your website, you have to go through one of their certified acquirers or online payment service providers, such as Beanstream, Moneris, Internet Secure, iCongo or PsiGate. Here's their current list of online payment service providers.
UseMyBank is another Canadian company that provides online debit payment services. Like Interac Online, buyers use their existing Online Banking bill payment service with their own bank to pay for your goods or services online and the payment is directly debited to the selected bank account.
UseMyBank fees "will be assessed upon activation of account" according to their website. A discount rate of 1.5% to 5% and a minimum $1.50 fee per transaction are posted. There is also an account fee. To get started using UseMyBank on your website, apply directly through the UseMyBank website.
With numbers like that, this is an online payment option you definitely want to offer your customers if you’re selling online.
Interac Online is one option that allows your customers to pay for goods and services online directly from their bank accounts. It's convenient and secure for customers because they don't have to share any of their card numbers or financial details when making a purchase; payment is completed through their own financial institutions.
To start offering Interac Online on your website, you have to go through one of their certified acquirers or online payment service providers, such as Beanstream, Moneris, Internet Secure, iCongo or PsiGate. Here's their current list of online payment service providers.
UseMyBank is another Canadian company that provides online debit payment services. Like Interac Online, buyers use their existing Online Banking bill payment service with their own bank to pay for your goods or services online and the payment is directly debited to the selected bank account.
UseMyBank fees "will be assessed upon activation of account" according to their website. A discount rate of 1.5% to 5% and a minimum $1.50 fee per transaction are posted. There is also an account fee. To get started using UseMyBank on your website, apply directly through the UseMyBank website.
4) Give Them Offline Payment Options Too
Some of your potential customers are people who just aren't comfortable with any of the online options outlined above or people who want to talk to a live person. If you want to fully monetize your website and make all the sales that you can, it's important that you give these people ways to pay too. Include a toll-free number and an order form that customers can fill