PRESENTATIONGroup Members are:

• M.Ali Zahidi

• Imran Shoukat

TOPICS• E-Transaction concept.

• Payment gateway.

• Paypal.

• Shoping cart.

E-TRANSACTION

Definition:An electronic transaction is the sale or purchase of goods

or services, whether between businesses, households, individuals, governments, and other public or private

organisations, conducted over computer-mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery of the good or service may be conducted on or off-line.

SECURE ELECTRONIC TRANSACTION

Secure Electronic Transaction (SET) was a communications protocol standard for securing credit card transactions over insecure networks, specifically, the Internet. SET was not itself a payment system, but rather a set of security protocols and formats that enabled users to employ the existing credit card payment infrastructure on an open network in a secure fashion.

OVERVIEW OF SET PROTOCOL

The SET protocol is a security specification introduced by VISA and MasterCard for secure transaction over the internet. The main aim of the SET protocol is to ensure confidentiality of information. Secondly, it ensures the integrity of all the data that are transmitted during the transaction process. Finally, the SET protocol provides authentication that both the customer and the merchant.Both the customer and the merchant are provided with digital certificates that authenticate their legitimacy to make transaction over the network.

THE STEPS INVOLVED IN THE SET PROTOCOL ARE:

1. The customer browses the website of the merchant and chooses the product.

2. The merchant returns a form containing the list of items along with total price and order number. A copy of digital certificate is also sent for the authentication of the merchant.

3. The customer sends the dual signature order information and the payment information along with customer digital certificate. The digital certificate is to validate the customer’s authenticity. The order information confirms that the customer will make the purchase, whereas the payment information is encrypted by the public key of the payment gateway which cannot be read by the merchant.

4. The merchant forwards the payment information to the merchant bank.

5. The merchant bank then forwards the information to the Customer Bank for authorization and payment.

6. The Customer Bank sends authorization to the merchant bank and merchant bank sends the authorization to the merchant.

7. The merchant completes the order and sends it to the customer.

8. The merchant captures the transaction from their bank.

9. The Customer Bank sends a notification to the Customer that the payment has been processed.

TRANSACTIONThe sequence of events required for a transaction is as follows:

• The customer obtains a credit card account with a bank that supports electronic payment and SET

• The customer receives a digital certificate signed by the bank.

• Merchants have their own certificates

• The customer places an order with the merchant.

• The merchant sends the customer his public key and a copy of his certificate so that the customer can verify that it's a valid store.

• The customer sends the merchant: 1. His certificate.

2. His order details encrypted with the merchant's public key

3. His bank account details encrypted with the bank's public key.

• The merchant requests payment authorization by sending the bank: 1. The payment details encrypted with the bank's public key.

2. The customer's bank account details encrypted with the bank's public key.

Note that the merchant doesn't know the client's payment and bank account details:

The bank sends the merchant a confirmation encrypted with the merchant's public key.

The merchant sends the client the bank's response encrypted with the client's public key.

The merchant ships the goods or provides the service to the customer.

The merchant sends the bank a transaction request encrypted with the bank's public key.

The bank transfers the payment to the merchant.

PAYMENT GATEWAY

A payment gateway is an e-commerce application service provider service that

authorizes credit card 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

gateways protect credit card details by encrypting sensitive information, such as

credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and

the payment processor.[2]

HERE'S A STEP-BY-STEP EXAMPLE OF HOW IT WORKS:1. A buyer purchases an eBay item and enters a credit card

number in eBay checkout.

2. Details about the purchase are sent by eBay checkout to the payment gateway for processing.

3. The payment gateway forwards transaction information to seller's bank.

4. The seller's bank forwards transaction information to the bank that issued the buyer's credit card to authorize the transaction.

5. The bank that issued the buyer's credit card either approves or denies the transaction and sends that information back to the seller's bank.

6.If the transaction is approved, the bank will deposit funds on a merchant's account at a scheduled time.

7.The payment gateway sends transaction details and response back to eBay.

8.eBay lets the buyer know if the transaction was approved or denied.

PAYPALPayPal is an international e-commerce business allowing payments and money transfers to be made through the

Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods,

such as checks and money orders.

SHOPPING CARTSShopping cart keeps track of all items that a

customer wants to buy, allowing the shopper to pay for the whole order at checkout. Most shopping carts are free. Check these free

shopping carts at

www.onlineorders.net/links/free/.

In the "shopping cart" model, consumers can select items while browsing the site that are then

added to their virtual shopping carts.

ADVANTAGES: SHOPPING CARTS

It helps to maximize customers' satisfaction, and provide a faster, more convenient purchasing method.

The consumers don’t have to leave the comfort of their homes to make purchases.