EcommerceOnlinePayment

1、1e-commerce online payment aaaa consulting 2content project outline.3e-commerce development in china.4-25methodology.26-27key findings.28-77available payment methods.29-38main banks involved in e-commerce.39-43online payment process flow44-52difference in three cities53-71market survey result.72-77a

2、nalysis & recommendation.78-82issue & concern83-853project outlinee-commerce developmentmethodologykey findingsanalysis & recommendationissue & concern4e-commerce development in chinavcurrent statusvkey issuesvfuture development5e-commerce development in chinae-commerce development p

3、rocess in chinasource: desktop 1996: studied e-commerce development in china 1996/12: studied e-bank service model 1997/2: organized developing team of e-bank service system 1997/7: formulated e-bank service system， including providing online inquiry of cooperate finance and credit card, online decl

4、are of balance of international payment 1998/1: organized leader team of e-bank service system by head office of bank 1998/3: first online transaction completed by great wall credit card 1999/1: established e-bank department to coordinate e-commerce development 1999/6: provided many online payment m

5、ethods, for example: easy pay developed the first complete online payment system; bank of china set up payment gateway of set and ca center 1999/9: software development center of boc set up e-commerce laboratory6e-commerce development in china8008002020180180100100shoppingshoppingauctionauctionservi

6、ceservicelong-distance educationlong-distance educationsource: desktope-commerce current condition e-commerce development is still in the growth stage and experienced rapid development in 1999. in 1999, total amount of online transaction is rmb 5.5m and it is estimated that the total amount of onlin

7、e transaction will reach rmb 3.5 b in 2000 the latest research presents that internet users in china has exceeded 17m by march 2000, there are about 1100 web sites7e-commerce structurenote: ca will verify identity of all participants during the course of transaction.exchanging/clearinguserdistributi

8、onbuying/selling/storingcaweb sitetransactiondata base accountingpayment gatewayinformationcard issuers bank（paying bank）collecting system（collecting bank）.back system12123456789101010118u serw eb sitepaym ent gatew ayc ard issuers bankc learing certerc ollecting bankc a centere-com m erce participa

9、nts1.user: browsing web site, formulating order, delivery order/payment data toweb site2/3.web site: confirming order, conveying payment data to payment gateway4.payment gateway: delivery payment data to card issuers bank5.card issuers bank: verifying payment validity, transferring money to clearing

10、 center6.clearing center: accepting money, notifying collecting bank7/8.collecting bank: collecting money, notifying web site9/10.web site: processing data, informing distributor to arranging delivery11/12.distributor: deliver products9issuing informationbusinessweb sitebusinessdealchecking informat

11、ionbusiness model-b2b model 1: information platform function: web site issuing supply & demand information to buyer and seller note: such kind of web site only provide very basic communication service between supplier and buyer example: 10web site public platformbusinessbusinessbusinessconsumerb

12、usinessbusiness model-b2b model 2: online shopping city function: web site providing business with e-commerce platform & helping business to develop online transaction note: the majority of participants are business providing consumption products the web site is similar to traditional retailer r

13、enting counter example: 11businessbusiness web siteraw materialsupplierpurchasingbusinessbusinessweb sitedistributordistributionbusiness model-b2b model 3: business own web site function: distribution web site: business through its web site to develop traditional offline distribution activities &

14、; providing online service to its customers purchasing web site: business buying online by its own web site example: 12businessweb sitebusinessdealbusiness model-b2b model 4: competitive purchasing platform function: web site combining business product and service information to provide competitive

15、purchasing service . purchasing process: buyer-issuing inquiry, filling out inquiry bill web site-transferring inquiry to suppliers suppliers-giving quotation and returning it to buyer separately buyer-choosing suitable supplier note: comparing with information platform, business can obtain more eff

16、ective service from such model for example-gaining more business opportunities, reducing transaction time, lowering operating cost example: 13supplierweb sitedistributorbusiness model-b2b model 5: product/service agent platform function: business who have become agents of certain product or service

17、develop wholesale online note: agent online develop traditional offline wholesale activities through internet example: 14businessbusinesstechnology requesttechnology servicebusiness model-b2b model 6: technology support platform function: web site online providing technology solution to business, ra

18、nging from internet to software note: the rapid development of e-commerce bringing a great perspective for internet technology and consulting service example: 15business model-b2c model 1online shoppingsupplierweb siteconsumerdealsupplydemandfor example: competitive purchasingsupplier1supplier2suppl

19、ier3consumerweb sitedealdemandsupplysupplysupplydealing with supplier who offers competitive pricefox example: 16business model-b2c model 2individual quotationconsumer1consumer2web sitesupplierconsumer3supplydealdemanddemanddemandduring this kind of transaction, supplier will deal with consumer who

20、give the highest offer, so price flows from low to high in this modelfor example : group quotationsupplierdealconsumer1web siteconsumer2consumer3supplydemanddemanddemanddealdealduring this kind of transaction, to deal with allconsumers, supplier will give cheaper offer,so price flows from high to lo

21、w in group quotationfor example : 17business model-b2c model: individual e-bankconsumerconsumerweb site of bankexpense account: for example, gas bill, mobile phone feeschecking/transferring accountonline shopping paymentfor example: 18basic e-commerce transaction processe-commerce development in chi

22、nanotifyconsumercredit card organizationbank merchantca centerorderdeliverytransfertransferpaymentbilltransfer123456781.consumer: formulating order, delivering order/payment data to merchants2.merchant: confirming order, transferring payment data to bank3.bank: verifying validity of payment, informi

23、ng credit card organization4/5/6.credit card organization: transferring money, notifying bank7.bank: returning payment result to merchant8.merchant: arranging delivery19technology support payment software for merchant server: cyber cash cashrgistp4.0 1999/05/19) g10beset pos l.2 (1998/06/15 ( ) spay

24、 2.2.3 (1999/01/11) v pos 4.5 (1999/01/20) ibm payment server 1.2 (1999/05/12) payment gateway software for bank server: g10beset g10beset gateway 1.3(1998/08/28) spay 2.5 (1999/04/19) vellfone v gate 4.1 (1999/02/16) ibm payment gateway (1999/02/25) software for ca: commerce stage secure ca(1999.7/

25、.6) g10beset的的g10beset cal.2 (1998.7.21) verisign ca servicesl.10 (1999.2.26) ibm payment begist 1.2 (1998.11.17) e-wallet software for card holder: commerce stage cardho1derl.0(1999.5.26) cybercash wallet (1999.5.29) g10beset wallet 1.1 (1999.5.29) spyrust/terisa webwallet 1.0(1998.5.29) tnntech sn

26、y 2.1 (1999.5.29) verifone wallet 2.1 (1998.5.29) ibm comsamer wallet 1.0(1998.10.7)20case one-ibm solution: payment gateway (1999/02/25) payment gateway enabling services: for bank & financial institutions set for e-credit enabling services: transforming credit card transaction information unde

27、r set system set for e-debit enabling services: transforming automatic transfer information under set-like system ssl for e-credit enabling services: transforming credit card transaction information under ssl system payment gateway connection services: for store appointed by bank, isp, online shoppi

28、ng city set for e-credit connection services:, connecting objectives with payment gateway of bank & financial institutions under set system ssl for e-credit connection services:,connecting objectives with payment gateway of bank & financial institutions under ssl system21e-commerce developme

29、nt in chinavkey issuesonline paymentbandwidthproduct distributioncredit system22 bandwidth slow online transaction resulted bycurrent bandwidth has greatly impedede-commerce development in china: for web site: difficult to introduce products with multi-media way difficult to increase transaction amo

30、unt for user: long transaction time demotivates most of consumers long transaction time increasing communication and time cost online paymentin todays market, online payment is the bottleneck of e-commerce development difficult to realize e-commerce advantage for lacking convenient payment methods u

31、nsecured online payment system uncompleted regulations: for example, contract law accept e-contract but does not accept e-signaturee-commerce development in china23e-commerce development in china distribution systempoor distribution system is another impediment web site: difficult to establish effec

32、tive distribution system covering whole country deferring delivery slow transaction process and demotivate consumers distribution supplier: small operation scale resulting high operation cost insufficient distribution supplier in market credibility system low level creditability system lacking funda

33、mental creditability between business and personal uncompleted creditors right protection bank creditability dominated in china creditability system commercial creditability system developed slowly24e-commerce development in china individual credibility system 1999 peoples bank of china- increased i

34、ndividual consumption loan 1999/5 shanghai creditability company, created by people bank of china, shanghai information office and 15 local merchant banks, is the first media organization taking responsibility for investigating individual creditability 2000/4 real name system-it is necessary to use

35、real name to open account 2000/7 “shanghai individual creditability service system” provided by shanghai credibility company-banks in shanghai can check creditability of people who applying for of credit card and loan within seconds25e-commerce development in chinafuture development: trends in 2-3 y

36、ears traditional industry begin to exploit e-commerce online payment will not be the focus of e-commerce web site model will be more diversified distribution problem will be worse traditional game rule that only protects merchants interest and ignores consumers interest will experience challenge leg

37、al and secure environment will be improved credit system will be the bottleneck of e-commerce26methodologyvsecondary researchvin-depth interview27methodology in-depth interviewin-depth interview help to view the whole picture of all related problems about online payment in china interviews have been

38、 developed in beijing, shanghai and guangzhou, including merchant, bank and userachievement of in-depth interview available payment methods current bank services merchant&consumers requirement other stuff related e-commerce secondary research secondary materials sources. related published source

39、s: -government information/statistic -professional magazines -brochures of banks/merchants internet sources professional institutionsachievement of secondary research related regulations basic status of online payment potential competitor trends/opportunities28project objectiveskey findingsonline pa

40、yment processavailable payment methodsmain banks involved in e-commercedifference in beijing/shanghai/guangzhoumarket survey result29online payment methodspreferred methods for online shoppingoffline payment methodsmarket share of different methods3031online payment methods32offline payment methods3

41、3market share of different methods1%1%9%9%70%70%20%20%codcodcredit cardcredit cardpost remittancepost remittance cash on delivery: 70% banking card: 20% postal remittance: 9% others 1%34member registrationcashier shopping cartenter user name/passwordcancel orderconfirming orderorder resultpayment me

42、thodlog on web site继续购物继续购物give up buyingwaiting responseenter personalinformation valid orderclub member?delivery waiting deliveryyesnocontinue buyingconsumer-online buying process flow note:some web site will e-mail or call consumer to confirm delivery time & place 35preferred payment methods

43、for online shoppingrankingbanking cardcash on deliveryotherspostal remittancealthough cod is the major payment method intodays market, most consumer prefer banking card.moreover, certain amount of potential users aregoing to shop online by varied banking card. however, many constraints, such as secu

44、rity, credibility and delivery push consumers to take cod,a good supplement for online transaction36available payment methodsdecision framework for consumer shopping onlinedeferring delivery 30%unsecured online payment 30%bad after selling service 15%complicated payment process 10%insufficient payme

45、nt methods 15%37available payment methodsdecision framework for consumer payment behaviors consumers position during online transaction in overseas market merchant put consumer interest on the most important position. during transaction, consumer can overdraft from bank and enjoy best service provid

46、ed by merchant in china market current regulations protect not consumer but merchants interest. it is almost impossible for chinese consumer to overdraft from bank, most merchant provide low level after selling service factors influence consumer payment behaviors security of online payment merchant

47、credibility consumption concept application of computer/banking card products attribute diversified payment methods convenience of online operating the following three factors have more stronger influence security of online payment merchant credibility, after selling service convenience of online op

48、erating38available payment methodsfuture development of online payment methods banking card 50% cash on delivery 35% green card 11% postal remittance 2% others 2%39cooperation style with merchantsbanks involved in online paymentbusiness scale4041banks involved in e-commercestarting timestarting time

49、jan-98apr-98jul-98nov-98feb-99may-99aug-99dec-99mar-00jun-00oct-00cmbbocccbcabmshxszicboccmbcmbbocbocccbccbcabcabmsmshxhxszszicbocicboc42cooperation style with merchant-bank of chinamerchant needs to complete the following process to become an appointed business of boc delivery application to boc fo

50、r establishing web site related technology requirement: including web site and payment platform informing boc to exam web site/payment platform reaching agreement and becoming appointed business downloading e-certificate from web site three days after signing agreement transferring e-certificate to

51、payment gateway of boc to confirm, and then dealing with banking card of boc43main banks in e-commercekey issue and future development key issue no unified and authoritative ca center no completed law and regulations for e-business difficult to commence cross-regions operation for relative low level

52、 of computer/internet application within bank system difficult to form cross-banks operation for traditional management mechanism trend of development establishing authoritative ca center by government setting up related law to manage e-commerce improving computer/internet application level within b

53、ank system accelerating exploration of cross-banks/cross-regions operation 4445set transaction processcard holderweb sitee-paymente-walletmerchants servermerchantbankpayment gatewaypayment registrycacertificate authority centerinternet1.card holder: browsing web site, formulating order2.cardholder:

54、acting e-wallet3.ca/payment gateway: verifying participants identity4.e-wallet: delivering order/payment data to e-payment/payment gateway separately5.payment gateway: delivering payment data to bank; bank transferring money and returning to payment result6.payment gateway: delivering transaction re

55、sult to merchant server7. merchant server: confirming payment, arranging delivery 46model 1: set (encryption, e-envelop, e-signature, double e-signature, ca)card holderpaymentgatewaybankmerchant1/234567571 card holder: browsing website & online shopping;2 merchant: confirming online shopping;3 c

56、ard holder: verifying merchants identity, conveying order to merchant ( payment data is unreadable to merchant);4 merchant: verifying payment gateways identity & delivering payment data to it; 5 payment gateway: verifying merchants identity, verifying payment validity of card by traditional bank

57、 network, returning payment result to merchant;6 merchant: confirming transaction result, arranging delivery7 merchant: regularly asking payment information from payment gateway, payment gateway asking card issuer to transfer money, returning result to merchant.note: all participants can get legal i

58、dentity from ca before transaction and ca will verify identify of others during the whole transaction47model 2: non-set shopping card (no bank involved) (ssl, rsa encryption, firewall)card holdercard issuersbankmerchant1364/571.card holder: buying shopping card from card issuers bank or agent2.card

59、holder: browsing website & online shopping3.card holder: verifying card issuer identity, delivering order encrypted by rsa (merchant can not read the payment data)4.merchant: conveying payment data to card issuers bank5.card issuers bank: cracking payment data, transferring money, returning paym

60、ent result to merchant 6.merchant: conveying transaction result to card holder, arranging delivery7.merchant: regularly settling with card issuers banknote: 1.shopping card issued by organization authorized by merchant, for example, shopping card issued by cmb and 2.under ssl, bank replace ca to verify merchants information before transaction3.encryption