By far the most dominant online payment system, credit cards are the default choice of payment for many e-businesses. Online credit card transactions are remarkably similar to in-store purchases except for the fact that online merchants do not ever handle the credit card nor do they receive a hand signed receipt. This increases the risk for a merchant as the transaction may fail even as he posts out the product.
The transaction process is rather simple and straightforward and it involves five distinct parties: the merchant, the clearinghouse, the consumer, merchant’s bank and consumer’s card issuing company.
It can be broken down into six simple steps:
1. Consumer makes purchases on his credit card through the web portal
2. A secure online tunnel is formed on the Internet to encrypt and protect and credit card details or customer information from unauthorized interlopers. There is no actual authentication and the transaction is almost wholly trust-based
3. Once the merchant receives the credit card details, the e-business portal software will automatically contact the clearinghouse
4. The clearinghouse authenticates and verifies the credit card balance
5. If the credit card information is verified and cleared, the clearinghouse will then credit the merchant’s accounts
6. The merchant will then record the purchase in the monthly statement
Fun Facts#3 The term credit card was first used in a novel in 1887 to describe a card for spending citizen's dividend
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[email protected] Done By: Gobardja Ian U098473L Kua Li En A0070291M Nicholas Chen A0072340U Justin Tan A0072547B |