e Commerce and Convergence University of Queensland 20

e. Commerce and Convergence University of Queensland 20 th Aug 2001 by James Sturges, Business Development Asia/Pacific Matthew Rainbow, Business Development Manager email: matthew. rainbow@qsipayments. com

Commerce, Convergence & Cunningness Agenda n Commerce n Convergence n Real Solutions

Commerce, Convergence & Cunningness Agenda n Commerce n Convergence n Real Solutions

Commerce, Convergence & Cunningness e-Commerce Marketing It's not really e-commerce Inquiry until someone is paid! Offer Buyer John Richards, CEO. QSI Payments Inc Acceptance Fulfilment Payment Seller

Commerce, Convergence & Cunningness Payment Facts There are more payment channels becoming available n Sophistication of channels is increasing n Banking systems remain tied to legacy systems and industry standards n Security is better understood, legal precedents emerging n

Commerce, Convergence & Cunningness The Four Pillars of Security Authentication n Authorization n Privacy n Non-repudiation n

Commerce, Convergence & Cunningness Current Banking Clients HSBC n Master. Card International n Royal Bank of Scotland n ICICI Bank n New York Cash Exchange (NYCE) n Cash. Card Australia n ETSL n

Commerce, Convergence & Cunningness Agenda n Commerce n Convergence n Real Solutions

Commerce, Convergence & Cunningness Payments Convergence Converging Networks Converging Business Processes

Commerce, Convergence & Cunningness Before Convergence Telephony Network Telephony Fax Network Messaging Internet Legacy Network Legacy Comms Propriety Comms Banking Propriety Network Banking Network

Commerce, Convergence & Cunningness Before Convergence Telephony EPOS Network Fax Bank Connects Messaging Propriety Apps Single Links Propriety Network Internet ATM Legacy Comms Web Banking Propriety Comms Banking FEP ATM Network Internet FEP FEP Bank A Fax Network Telephony Network Bank Net Messaging Network Visa Internet Net Bank B Legacy Network Propriety Network Banking Network

Commerce, Convergence & Cunningness Before Convergence Telephony Network Telephony Fax Network Messaging Internet Legacy Network Legacy Comms Propriety Comms Banking Propriety Network Banking Network

Commerce, Convergence & Cunningness After Convergence Telephony Applications Fax Applications Messaging Applications Internet Common Network Internet Applications Legacy Comms Legacy Applications Propriety Comms Propriety Applications Banking Applications

Commerce, Convergence & Cunningness After Convergence Telephony Bank A Applications Telephony EPOS Fax Applications Fax Bank Connects Messaging Apps Propriety Internet ATM Legacy Comms Web Banking Single Network Messaging Applications RPC Common Network Internet Applications Bank B Legacy Applications Propriety Comms Propriety Applications Banking Applications

Commerce, Convergence & Cunningness After Convergence Telephony Applications Fax Applications Messaging Applications Internet Legacy Comms Propriety Comms Banking Common Network Transactions • Authenticated • Secure • Integrated Internet Applications Legacy Applications Propriety Applications Banking Applications

Commerce, Convergence & Cunningness Business Process Convergence BC Business Transaction Financial Transaction AC Financial Transaction Business Transaction Integrated Financial / Business Transaction

Commerce, Convergence & Cunningness Agenda n Commerce n Convergence n Real Solutions n Questions

Commerce, Convergence & Cunningness Real Solutions achieved by n Integrating: Convergen ce Commerce Channels Corporate

Commerce, Convergence & Cunningness Example 1: Sabre Owns 80% of US travel market n Sabre is the largest GDS in the world n The only non airline owned GDS n Responsible of 2% of world wide credit card volume by value n QSI Payments provides single worldwide payments gateway n

Commerce, Convergence & Cunningness Ch s e at r po r Co SITA, ARINC or VPN Banking Acquirer(s) Sabre Host Convergenc e nel an Comme rce Sabre-connected Agents located around the world Banking Acquirer(s) IB M ge sa ge es an M ch Ex Firewall GMEA Sabre Data Centre Tulsa, Oklahoma re Secu ection Conn VPN Firewall Payment Server Data Centre California

Commerce, Convergence & Cunningness In Summary Convergence is at both the network, and business process level n New technologies are enabling financial systems to respond to emerging for ecommerce markets n Best practice solutions are those that bring together Commerce, Convergence, Corporates and Channels n

e. Commerce and Merchants Matthew Rainbow ‘Business Development Manager’

Commerce, Convergence & Cunningness Internet Merchants Overview of Global Merchants n Current Issues for Merchants (security) n Transaction Flows (B-C & B-B) n Fraud Detection and Prevention n Questions n

Commerce, Convergence & Cunningness Global Merchant Presence

Commerce, Convergence & Cunningness Asia/Pacific Merchants

Commerce, Convergence & Cunningness Security n Encryption and digital signature technology authenticates merchant-to-bank and bank-tomerchant communications n Validation of merchant/FI relationship by guaranteeing the identification of both parties n Technology that supports a range of cardholder authentication mechanisms

Commerce, Convergence & Cunningness QSI Security n n 128 bit encryption (Privacy) RSA Public and Private keys (Authentication) Range of card present mechanisms Fraud detection (third party)

Commerce, Convergence & Cunningness Two Party Transaction Flow

Commerce, Convergence & Cunningness Issues C/C information stored with Merchant n Risk of hacking n Risk of internal fraud n Example: CD Universe n

Commerce, Convergence & Cunningness Security Typical Alternative Secure Cardholder Messaging Bank Merchant Cardholder

Commerce, Convergence & Cunningness Three Party Transaction n SSL+ transaction flow

Commerce, Convergence & Cunningness

Commerce, Convergence & Cunningness B-B Transaction Flow n B-B Transaction Flow demo

Commerce, Convergence & Cunningness Internet Fraud n n n - Internet transactions are known as card not present transactions Risk is with the Merchant not the consumer Fraud Predications 2001 9 Billion charge back 2003 15 Billion charge backs

Commerce, Convergence & Cunningness Fraud Reduction Mechanisms AVS Address Verification System n Registers address with the C/C number n Two measures for Authentication “Something you know and something you have” n Reduces repudiation n Reduces cost (msf%) n

Commerce, Convergence & Cunningness Safe Debit n n n Credit Card Size CD Encrypted PIN Line item information (Catalogue) Reduces Repudiation ‘Something you know, something you have’ Reduces cost (% trans)

Commerce, Convergence & Cunningness Third Party Fraud Detection n n - Transaction initially redirected Fraud screening system Rates the transaction 1 -100 Considers all elements of the Payment Address IP number ISP/ Domain Names External market data

Commerce, Convergence & Cunningness Architecture n Supports a wide range of payment types through a family of payment gateway products n Incrementally add new payment types with minimal effort and disruption to existing systems environment for both the merchant and the FI

Commerce, Convergence & Cunningness Payments Architecture

Commerce, Convergence & Cunningness Channel Convergence Retail POS Integrated or Standalone EFTPOS Web Credit Card (Batch or Third Party) Automated Voice (IVR) Credit Card (Batch Only) Call Centre Credit Card (Batch Only) Mobile (SMS/WAP) Reconciliation

Commerce, Convergence & Cunningness Summary n n n Internet merchant presence is rapidly increasing Three party transactions reduce C/C exposure B-B payments are introduced as price and relationship complexity increases Range of fraud detection mechanism’s available to merchants Architecture that support multiple payments types across multiple channels

e. Commerce & Convergence University of Queensland – Real Solutions to Real Challenges Matthew Rainbow, Business Development Manager email: matthew. rainbow@qsipayments. com www. qsipayments. com