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The e-payment options

There is still hope for the regular conference goer. There are a few brave souls out there who can resist the lure of pitching their company products at conferences where they are asked to address a session or two.

Srinivas Polisetty, CEO, Mahadev.com, is one of them. Polisetty delivered a presentation this morning on 'e-payments: issues and challenges'.

In a session packed with fundamentals and details, Polisetty explained the different e-payment standards.

Though he was hampered by the lack of time allotted for his session, he did a commendable job trying to explain the e-payment options for consumers, businesses and banks.

Explaining the drawbacks that current payment methods face, he says, "The current methods are paper based and require manual approvals. Delay in handling even routine activities coupled with a lack of proper communication infrastructure and security issues make them expensive to implement."

And the opportunities that e-payment provides are:

• Automated payments that also allow for bank-to-bank transfer.
• Real-time authorisation for credit card purchases.
• Faster turnaround time that results in greater turnover.

The different e-payment options available today are:

• Secure Electronic Transaction
• Secure Socket Layer
• Open Buying on the Net
• e-checks
• Open Financial eXchange
• Bank Internet Payment System

1. SET:

A typical transaction involves a buyer or the consumer, a merchant or vendor and a bank.

SET introduces a fourth certifying authority into this transaction.

The authority issues digital certificates to ensure that the different entities involved in the transaction are who they claim to be.

Polisetty points out the problems with this mode. "Though SET is one of the best it has extremely slow response time. Also it is costly and has a low acceptance rate. The first transaction over SET took 30 seconds to be completed and it was only a credit card transaction. There is a golden rule on the Net. If any transaction takes over 8 seconds you end up losing your customer."

Though there have been server-side wallets implemented, SET has not really taken off among the consumers.

2. SSL:

All standard browsers implement SSL. It is a secure pipe between the browser, the merchant and the banks. Because of its simplicity, security and cost effectives SSL remains the most popular option.

3. OFX:

Open Financial Exchange is a framework to exchange financial data between banks and merchants. It is based on standards like SGML, HTTP and SSL.

4. OBI:

Open buying on the Internet is one of the most popular standards for business-to-business e-commerce. It involves a requisition and a payment authority and has inbuilt support for payments including exchange of invoices.

Polisetty emphasises "In order for many of these things to happen banks should be ready. If there is no system in banks for this e-transactions cannot take place. In the Indian scenario I think BIPS is a very good standard for banks to adopt."

He warns that companies should ensure that the technology they adopt is scalable and reliable. "Once you are on the Net you need to be prepared for a lot of traffic. If there is a glitch in some part of your Web site the entire site should not go down. Also you need to be careful to use technology that is open. Open standards are the only way to ensure that you can adopt technology that comes up in the future."

Earlier: E-commerce in Red and White

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