first ecom global e-payment processing
TRANSCRIPT
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First EcomGlobal E-Payment Processing
http://www.firstecom.com
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E-Commerce
• E-commerce boom started in 1998
– Yahoo, Amazon.com, eBay, etc
• Only the U.S. is participating in this boom
• Explosive growth expected in Asia
• Major limitation is lack of processing
capabilities, multiple currencies
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E-Commerce Worldwide
• According to Forrester Research:
– Currently valued at US$12 billion
– Expected to be US$1.1 trillion by 2002
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E-Commerce in Asia
• According to Goldman Sachs:
– End of 1998, 15 million Internet users and an e-commerce market of $700 million
– By 2003, 64 million Internet users and $32 billion in e-commerce sales expected
– Twice the growth rate expected in the U.S. during the same period
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Internet Evolution
• Phase I– Static web site - Glorified Brochure
– Marketing Driven
– HK$ 78K - 390K
– US 1995/96
– Europe 1997/98
– Asia 1997/98/99
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Internet Evolution
• Phase II– Moving from static to basic interactivity
– Content becomes more important
– Marketing & IT driven
– HK$ 390K - 2.0M
– US 1997/8
– Europe 1998/99
– Asia 1999
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Internet Evolution
• Phase III– Fully interactive web site– Revenue source - ROI– Requires new business model– Driven by Upper Management– HK$2.0 Million+– US 1999– Europe 2000– Asia 2000/2001
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Challenges
• Lack of online credit card processing capabilities in Asia and Europe
• Banks missing E-commerce processing partner
• Internet penetration still low
• Perception of security risks
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Positioning Statement
“First Ecom provides a global, secure, easy to implement,
low cost, electronic payment processing gateway.”
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Why First Ecom?
• Idea developed out of necessity
• Tremendous pent-up demand in the market
• Many different disciplines came together to create the First Ecom concept
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Why First Ecom?
• Solutions for both banks and merchants
– Offshore Payment Processor
– 3rd Party Processor
– In-Country Processor
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Bank ofBermuda
(Acquirer) First Ecom PaymentGatewayFirst Ecom -
Master Merchant
Approval /Due Diligence /Merchant Account /Money Transfer /Merchant Service
CardNetwork
CardIssuers
Shopping /Payment
Offshore Payment Processor
Cardholder
Internet
MerchantMerchant
Cardholder
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• Key Benefits to Merchant– Quick time to market
– Multi-currency support
– Tax neutral jurisdiction
– Easy to implement
– Low cost
Offshore Payment Processor
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MerchantAcquirer
First EcomPaymentGateway
Approval /Merchant Account /Settlement /Merchant Service
CardNetwork
CardIssuers
Shopping /Payment
3rd Party Processor
Cardholder
Internet
MerchantMerchant
Cardholder
First EcomProcessor
3rd Party Processor
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• Key Benefits to Acquiring Bank– Quick time to market
– Bank retains control on merchant evaluation, selection, and pricing
– Minimal modifications to merchant operations
– No modification to Bank Credit Card System
– Transparent to merchant
– Easy to implement
– Low cost
3rd Party Processor
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In-Country Processor
MerchantAcquirer
First Ecom PaymentGateway
Approval / Merchant Account /Settlement / Merchant Service
CardNetwork
CardIssuers
Shopping /Payment
Cardholder
Internet
Merchant Merchant
Cardholder
First EcomProcessor
POSMerchant
POSMerchant
TraditionalChannel
E-CommerceChannel
In-Country Processor
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• Key Benefits to Banking Consortium– Zero cost for system development
– Member Bank retains control on merchant evaluation, selection, and pricing
– No modification on Member Bank Credit Card System
– Transparent to merchant
– Support of local credit & debit authorization
– Support of local clearing and settlement
– Provides EBPP capability
In-Country Processor
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Purchase Process5) Purchase Confirmation sent to buyer
2) Merchant sends Order Form to buyer with order details
1) Buyer browses Internet & adds items to shopping cart
3) Completed Order Form & card details sent to Gateway
4) Authorization detailssent to MerchantInternetWeb user
(Buyer)
MerchantWeb Site
First EcomGateway
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Process First Ecom
PaymentNetwork
Issuing Bank
Inquiry routed back with authorization/rejection
First Ecom
Sends to payment network via payment switch
Payment Network (Visa Net/I.Net etc.) routes inquiry to issuing bank
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Authorization Advice
Online to Merchant
Via Secure Email to
Merchant
Merchant Account
Reporting System (MARS)
First Ecom
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MARS
• Accessible via Internet• View transaction history and records• Secure access• Four functions:
– Authorization– Settlement– Cancellation– Refunds
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Merchant Payment Process
Bank of Merchant
Money available to Merchant in chosen currency
Bank
Card Association pays the money into the Bank
Payment Network
Issuing Bank
Funds are deducted from the Buyer’s card by the issuing bank
Money deposited inmerchant account
S$US$ HK$ £€¥C$
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Secure Sockets Layer (SSL) versus
Secure Electronic Transaction (SET)
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SSL vs. SETCharacteristic SSL SET
Additional Cost Involved No Yes
Vendor Software Needed No Yes
Time Consuming No Yes
Difficult to Use No Yes
Widely Adopted Yes No
Industry Standard Yes No
Installed on Most Browsers Yes No
Who Needs It Only ISP/website
Every party involved
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Security
• Online Authorization using SSL with 40 – 128 bit encryption – prevents card fraud
• Content authentication and encryption: OpenPGP (RFC2440) - prevents buyer fraud
• The credit card number is not disclosed to the merchant - prevents merchant fraud
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Partnerships
• Expert Web
• FedEx
• HKSite
• HLB
• Inter-Merchant
• Intershop
• Microsoft
• Modem Poppe
• Sterling Commerce
• Sun Microsystems
• Sybase
• Topsoft
• USWeb/CKS
• UUNET
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Goal
For Asia to fully participate in the e-commerce revolution
sweeping the world.
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First EcomGlobal E-Payment Processing
http://www.firstecom.com