Online payment services provide secure payment transactions to the customer and the merchant. They include electronic debits, credit card processing, online checks and e-checks.
E-Check: The e-check is a pre-determined number of blank checks sent by the buyer to the bank or financial institution to clear his funds. The amount due on the check is then deducted from the total amount due on the bank’s account. When it reaches a certain amount, the bank releases the funds to the buyer’s bank account.
Credit card: When the customer purchases a product using a credit card, the card is swiped at an ATM machine. After the transaction, the cardholder receives a magnetic stripe on the back of the card.
Card swipe: This is a process where the customer swipes the card through a scanner that verifies his identity before releasing funds to the merchant’s bank. In some cases, when the customer swipes the card incorrectly, the transaction can be reversed without his consent.
Credit card terminal: A terminal is used in credit card transactions. These devices usually have an integrated terminal software that allows for processing of online transactions.
Digital Signatures: When a credit card or debit card is swiped, the transaction is encrypted. A digital signature is issued to the cardholder and to the financial institution. This signature is used as a proof of the transaction and the authorization to release funds.
Debit card: A debit card is used to withdraw money from an account. It uses a magnetic strip on the back of the card that contains the balance on the account. An internet connection is required to complete the transaction. The transaction is also secured with the use of a PIN or password.
Online Payment Services protects both the consumer and the merchant. They give both parties the benefit of security and privacy. They allow them to conduct business without worrying about the safety and confidentiality of their credit card details.
Security and Privacy – Online payment services offer protection to both the consumer and the merchant by encrypting credit card and debit card transactions. They do this by using a variety of encryption methods.
Encryption: Encryption means that a secret key or series of keys is being used to encrypt the transaction. This prevents others from intercepting the transaction. This prevents the transaction from being read by unauthorized parties and reading the cardholder or merchant’s credit card number. The transaction cannot be read if it is intercepted and decrypted by others who do not belong to the cardholder or the merchant’s bank.
SSL/TLSHT Protocol: SSL or Secure Socket Layer Technology is a technology that is used to encrypt data transmitted over the Internet. It also encrypts a person’s personal information such as name, address, email, IP address and the amount of the transaction being made.
Authentication: Authentication is a process of determining the identity of the parties involved. Once the identity of the client and the issuer is verified, the transaction can be completed.
A digital signature is also used to authenticate the client’s and the issuer’s authorization to authorize the authorization code. If the client’s or issuer’s authorization code is entered incorrectly, the transaction cannot be complete.
The authorization code is then validated by a database to ensure that the client has provided the correct code. The transaction cannot be completed if the authorization code is entered incorrectly.
Once the authorization code is validated, the transaction is done and both the consumer and the merchant get to benefit. Both the consumer and the merchant get to avoid the possibility of losing their money in a fraudulent transaction. Both the consumer and the merchant are assured of the safety of their credit card and debit card details and the ability to transact freely in the financial market.
Both the consumer and the merchant have the ability to avoid frauds because of the protection provided by an online payment service. This type of service gives both parties security and privacy while conducting financial transactions.
There are many online payment service providers available. Before choosing one out of them, the consumer should compare the benefits that the company can provide.