The principle of the payment system. Electronic Payments - How It Works
Thanks to the Internet, many new things have appeared in the world that greatly simplify life. Among them are various electronic payment systems that allow you to pay for services and transfer funds without leaving your home.
With you, Elena Zaitseva, financial analyst at HeatherBober magazine. I will talk about the features and capabilities of electronic payment systems and analyze the most popular of them. If you want to choose or change a service for remote financial transactions, you will find a lot of useful information in the article.
1. What is electronic payment systems
Electronic payment system (EPS) is an organization that provides mutual settlements between users on the Internet. The participants in the process are private individuals and businesses engaged in commerce, banks and other financial institutions.
EPS activities in Russia are regulated by the state. The main regulatory act is the law “On the National Payment System”.
Electronic payment systems allow you to:
- pay utility bills, mobile communications, television, etc .;
- purchase goods in online stores;
- withdraw funds to bank cards and accounts;
- exchange currency;
- transfer money to other participants in the system, for example, within a business.
The list is incomplete. The capabilities of virtual services are extensive, their functionality is constantly being improved and expanded.
For calculations, electronic money is used - virtual digital units issued by the system.
Features of digital cash:
- Issued only in electronic form.
- Secured by real money.
- Guaranteed by the issuing EPS.
- Stored on electronic media.
- Recognized not only within the system, but also in settlements with external counterparties.
Virtual money is stored on electronic wallets - this is the name of the user account in the selected system.
2. How do they work
The principle of operation of EPS is similar to the conduct of traditional cashless transactions. Each user has a personal account for settlements with counterparties and between their wallets.
Simplified scheme of work is as follows:
- real money is transferred to the user's digital account;
- at the domestic rate, the service exchanges for virtual currency;
- the account holder makes the necessary transaction (transfers funds to a private person, buys goods, etc.);
- the counterparty receives electronic currency;
- the system redeems its domestic money back, giving back traditional ones.
After exchanging real money for digital for the amount of proceeds, the issuer has obligations to the user. EPS guarantees that, at the request of the participant, the virtual currency will be exchanged for real money.
For digital cash to be possible, the recipient organization must accept payment in virtual currency.
Often operations go through intermediaries.
Example:
The owner of the wallet makes an application for transferring virtual money to a bank card. The operation takes place through an intermediary - an organization that accepts digital money, changes it to traditional ones and transfers them according to the specified details.
As a result, the client’s account receives the amount in the desired currency, for example, rubles or dollars.
Similarly, operations are carried out in favor of companies that do not accept virtual money. Sometimes the role of intermediary is performed by EPS itself.
3. What do electronic payment systems earn?
The main income comes from transaction fees. For example, Webmoney, one of the leaders in the digital cash market, retains 0.8% from each user's transaction. The tariff applies to both external transfers and actions between accounts of one user.
EPS additional income is obtained from:
- User Certifications.There are different wallets available. In order to perform an extended set of actions or transfer more money, you need to pass certification - provide passport data, confirm a phone number, meet with a company representative for personal identification. Often a commission is charged for the service.
- Use of terminals. You can replenish your wallet in various ways, a payment terminal or an affiliate ATM is one of them. A commission is charged for the operation. For example, the Yandex.Money service, depending on the selected terminal, holds from 0% to 19% for one top-up.
- Using your own cards.To simplify the input and output of money, EPS issue cards, the maintenance and support of which costs money. The fee is taken for issuing, withdrawing cash, SMS-informing and other operations.
The list is incomplete. In addition to the above, there are many other ways to earn money - payment for confirming transactions, commissions from partner organizations, providing intermediary services, etc.
4. Advantages and disadvantages
Electronic transactions are beneficial both for EPS and its corporate partners. The issuer of virtual currency receives a commission for the operation, and retail outlets are not spent on collection and storage of cash.
The user receives from such calculations:
- convenience - operations are carried out from home or another place with Internet access;
- reliability - subject to the safety rules for using the wallet, the service provides information protection and the safety of funds;
- unlimited use - digital cash does not expire and does not burn out;
- free support - there is no charge for wallet service;
- high speed of payments - many operations are carried out almost instantly, delays are possible when involving intermediaries;
- transparency - all transactions are recorded, the history of electronic payments can be requested at any time.
But in addition to the advantages, EPS also has disadvantages:
- the need for verification of identity - for the full use of the account you will need to provide personal data and documents;
- restrictions on use - not all companies and trading organizations accept virtual money, although their list is growing;
- commissions - some mandatory fees are significant, which is especially noticeable in large amounts;
- difficulties with recovery - if you lose your password, it will be difficult to resume work due to increased security requirements, you will need to provide a lot of personal information.
Each user will find significant advantages and significant disadvantages. For example, for me the commission for withdrawing funds from Webmoney to a card is too high. Because of this, I try to minimize the use of virtual money.
Watch the video to get an independent expert opinion on the features and prospects of digital cash:
5. What are the types of EPS?
There are several types of electronic payment systems. They can be divided by the parties to the transaction, by the amount of the transaction, by the due date, by currency, etc.
Most often used classification at the time of entering money into the system. According to it, credit and debit types of EPS are distinguished.
Credit
For settlements between participants in such services, credit cards are used with additional protection - message encryption and digital signature. For the operation, it is required to confirm the creditworthiness and compliance of the provided payment data with reality.
The main feature of such transactions is that first a contract is concluded, and then payment or money transfer is made.
Credit EPS are First Virtual, Open Market, CyberCash, CheckFree and others.
Debit
Almost all international electronic payment systems are debit. The principle of their work is that transfers and payment transactions are available to the user strictly after replenishment of the account.
Some debit XPS do not use digital cash, but electronic checks.
The principle of their work is as follows:
- The sender of the payment issues the check and certifies it with a virtual signature.
- The document is transferred to the recipient through the arbitration system.
- The service checks the check.
- If no violations are found, then payment is accepted.
- Funds from the account of the user issuing the check are transferred to the recipient.
Digital checks use a limited number of systems - NetCash, NetChex, NetCheque and some others.
6. TOP-5 electronic payment systems in Russia
Not all global EPS are known or used in Russia. This is due to difficulties with replenishment and withdrawal of funds, as well as to limitations in use.
Webmoney
It is considered a market leader. The development of the company began in 1998. During this time, more than 36 million people have joined Webmoney.
The account holder has the right to open an unlimited number of wallets in virtual analogues of various currencies, including Bitcoin and gold. All accounts are combined in a kind of Keeper repository, each assigned an individual WMID number.
All operations are instant and irrevocable. The commission for any transaction is 0.8%. For work, it is necessary to provide personal data and confirm them. There are several types of certificates. The higher the status of the account, the more opportunities the user has.
Yandex money
Commercial non-banking organization, licensed by the Central Bank.
The user is prompted to open one of the three possible wallets - anonymous, personalized or identified. Status affects the maximum possible balance on the electronic account and transfer limits.
Non-profit organizations Yandex.Money have their own card for payment and cash withdrawal, tied to a wallet. The cost for 3 years is 200 rubles.
Paypal
International EPS, brings together more than 200 million users. PayPal allows you to pay for purchases on the Internet and make transfers both domestically and abroad. You can open both a personal and a corporate account.
The main advantage of the service is that transfer within the country for a private client will be free when debiting funds from a PayPal wallet. There is no commission for paying for services either.
If the transfer will be at the expense of funds on the linked card, the commission will amount to 3.4% + 10 rubles for each operation.
Qiwi
Offers simplified registration - to create a wallet, just specify the mobile phone number. When you open an account, Qiwi service will assign the Minimum status to the client, which after passing the certification will be replaced by Basic or Professional.
Through the service you can pay for services or transfer money. For ease of use, the client is invited to issue a free card associated with the funds in the wallet.
Payeer
The service offers to transfer funds to more than 200 countries in dozens of ways. At the time of this writing (March 2018), 157 online exchangers are declared on the Payeer website.
It is possible to issue a free card and withdraw funds to it without a commission.
To understand which service is more profitable to use for withdrawing funds to bank accounts and cards, commission data is summarized in the table:
№ | Service name | Card withdrawal fee | Fee for withdrawal to account |
1 | Webmoney | 2.5% + 40 rubles or 2% if the service finds a counter application from another participant | Depends on offers of other participants, on average 2% |
2 | Yandex money | 3% + 45 rubles | 3% + 45 rubles |
3 | Paypal | Free of charge subject to using funds from the wallet | |
4 | Qiwi | 2% + 50 rubles | 2% + 15 rubles |
5 | Payeer | 0% to 5% | 0% to 5% |
7. Conclusion
Now, knowing the basic information about EPS, you can easily choose the right one for your needs.
The main thing is to ensure the safety of using the service. Use complex passwords and do not share personal data with anyone. When working at the computer from which you log into your virtual account, do not visit dubious sites and do not click on suspicious links.
Question to readers:
Do you find the possibilities of virtual money useful for you personally?
We wish you to find a convenient, functional and user-friendly electronic payment system. If you still have questions, ask them in the comments. We will be happy to answer them!
At the moment, progress has stepped far. Settlements have long been taking place not only in cash, but also by card, as well as online through electronic payment systems. The list of these services is regularly updated.
Currently, online investments and payments are developed that cannot do without electronic money. During its inception (early 90s), it became clear that traditional financial products are not suitable for electronic payments. This is how the existing online payment systems appeared. The list and features of each of them are presented below.
Principle of operation
Such systems operate in different ways. Basically, the founders of such services create their own electronic currency. They are called originally, since it is illegal to use "money" in the name. However, it is important to understand that beautiful terms indicate the absence of any financial guarantees and deposit insurance.
All on the conscience of the founders, who value their reputation. In essence, where participants are registered and transactions are conducted. Each depositor has a personal account and in which the amount of money in his account is fixed.
Some services even have their own cash points.
Advantages and disadvantages
Electronic payment systems have a considerable list of advantages.
- Instant transactions (transfer of funds, payment for online purchases, conversion).
- Low fees (due to high competition).
- Anonymity (a big plus for those who work semi-legally).
- Funds can be transferred to any bank accounts.
- Greater security (than with cash).
- Very convenient for receiving salaries by remote employees.
- The ability to pay utilities, telephone, Internet.
Payment systems also have a list of shortcomings.
- The main disadvantage is that accounts are not completely legal.
- Not all purchases can be paid using electronic money.
- The service of converting funds into cash is expensive.
- Due to the lack of control from the legislation, one can often encounter scammers (on free hosting, such sites are created in 5 minutes, so you should check the service for authenticity).
To verify the authenticity of electronic collateral, it is enough to find out whether large financial institutions (Sberbank of Russia, Alfa Bank) cooperate with this service.
List of payment systems in Russia
The main services operating in the territory of the Russian Federation:
- Yandex. Money is one of the most popular in Russia. With it, you can make many payments. In particular, the payment of paid games and other Internet services, utilities, telephone, purchases in online stores. Also, with its help, money transfers are made.
- Arsenal Pay - payment system of the Primorsky Territory of the country. This is another reliable service for transferring funds and making payments. The service does not charge hidden fees.
- MIR (NSPK) is a Russian payment system founded by the Central Bank. The system guarantees safety and the absence of interruptions in work during various financial operations in Russia.
There are also other Russian and international payment systems, a list of which is presented below:
- WebMoney is the most popular international service. A separate guarantor works with different currencies. Users have a unique WMID for using their personal account.
- PayPal is another global system. Its feature: all payments are made in real money.
- QIWI (QIWI) is a world leader among instant payment systems.
The future of payment systems
Over the next five years, the retail banking business in Russia will change dramatically - payment technologies are developing rapidly. Serious changes have already taken place: electronic databases are being introduced, processing systems are being improved, legislation and conditions are changing. Internet banking and mobile banking are gradually pushing ordinary ops out of the banking business.
What is a payment system?
A payment system is understood to mean a set of rules and means that allow settlements between the buyer of a product or service and a trade or service organization. Payment includes a set of operations on authorization, mutual settlements and transfer of payments, as well as other financial and non-financial information. Usually involved in the payment process:
- Customer, customer
- Shop, seller of goods or services
- Bank as a guarantor of legitimacy of payment
- Processing company as a technological intermediary between all parties to the transaction.
There are several main types of cashless payments
- With a bank card and personal identification code indicated on the card
- Using an electronic wallet (a separate payment system application)
- Using an electronic account with authorization via an Internet browser
- Using a mobile phone from a client’s account with a mobile operator
- Using mobile banking (when a bank account is tied to a client’s mobile phone)
Payment system user interface
Are you interested in what your client’s personal account looks like in various payment systems?
Internet banking, mobile banking
Use of cashless funds
Cash payments
To date, only one type of remote cash payment for goods or services is known - through payment terminals of independent payment systems (for example, QIWI) or through similar banking terminals. Payment is accepted through the automatic bill acceptor of the terminal.
Transfer of electronic funds between payment systems
Learn more about security in payment systems.
Payment systems protect payment transactions in order to avoid malicious payments. Firstly, encrypted protocols are used. Secondly, each payment is often protected by confirmation using a code sent by SMS to the telephone number registered by the client. Thirdly, when it comes to Internet payments using plastic cards or electronic wallets, transactions in the payment system can be further protected by binding to a specific computer or IP address, as well as time-limited authorization methods - this helps to avoid logging into the system another user on shared computers.
Each payment system tries to certify the parties to the transaction - the seller and the buyer. In order to receive a certificate in an electronic payment system, an individual is required to provide identity information (for example, a passport). Organizations provide legal documents attesting to the registration and availability of relevant licenses for the activity.
The development of electronic commerce has contributed to the emergence of electronic payment systems that allow you to pay for a purchase on the Internet from home. The common name "payment systems" combines different types of online payments. The most common credit systems that allow you to use regular credit cards on the network.
The credit card technology serving plastic card payments is represented in Russia by such systems as Assist and CyberPlat (Fig. 5.2). The scheme of operation of such a system is as follows: the client gets the opportunity to make purchases in online stores and pay for them in real time either from his bank account or through his bank card, receive statements and payment results. A client can issue a payment order directly via the Internet, which allows a bank transfer to any account in any Russian bank. Thus, you can transfer funds from the system to your account in any other bank or pay for typical services, for example, telecom operators or Internet providers.
Another niche in the electronic payment market is occupied by systems that use electronic money. As noted in Subsection 5.3, the essence of such money is the introduction of the digital equivalent of real money, through which the calculations are made. In many cases, this technology is more convenient, especially when paying for small purchases, which make up a large part of the market for goods. In addition, such systems are attractive in that they are anonymous and do not require third-party confirmation.
Digital cash technology is represented in Russia by such systems as PayCash and WebMoney. The scheme of work of these systems looks like this: the client opens an “electronic wallet” in an “electronic bank” (opening an account via the Internet “from home”) and transfers money to this account (by depositing cash to the bank cash desk, by bank or postal transfer, by credit cards, and finally, another client can pay him as part of the system). After that, he becomes a client. To be able to pay within the framework of the system, the client creates one or more payment books in his computer. Then the customer translates
a certain amount of money from your account to one of the books, that is, to your computer. Now the client is ready to pay in the network, and anonymously, with the money that is on his payment books. Each payment is authorized by the bank.
Fig. 5.2 CyberPlat payment system page
Using an "electronic wallet" is convenient to pay in online stores that accept electronic money. In addition, if the client paid “with the protection of the trade transaction”, the seller receives the money only after the delivery of the goods, that is, the protection of the buyer is laid down in the system algorithmically.
Consider some payment systems.
« CyberPlat » - This is a universal multi-bank integrated Internet payment system that provides a full range of financial services - from micropayments to interbank settlements.
The main features of the CyberPlat system are:
1) integration - the system combines various tools for doing business on the Internet:
- “CyberPlat” - a subsystem of business-class transaction services for business with elements of electronic document management for customers registered in “CyberPlat”;
- “CyberPlat” - a subsystem for servicing plastic cards of international and Russian payment systems, focused on “business” services for the consumer and not requiring registration of customers in the CyberPlat system;
Internet banking - managing an account in a member bank of the system via the Internet (more on this in Section 5.6);
2) multibanking - the CyberPlat system allows an unlimited number of banks to participate in it, is open for interaction with any other payment systems and, unlike many of them, provides support for many processing centers. Processing center - it is a legal entity or its structural unit, providing information and technological interaction between participants in the calculations. The collection, processing and distribution to participants of settlements of information on operations with bank cards is called processing ;
3) universality - the system allows you to use various payment instruments: plastic cards of international and payment systems, including Visa, Europay, Diners Club, JCB, American Express, Union Card, single e-port cards, as well as payments directly from payers bank accounts in banks participating in the system to any bank account, including external.
CyberPlat guarantees complete confidentiality of transactions and inaccessibility of payment details to outsiders.
« Assist » is a system that allows real-time authorization and processing of payments made using credit cards from any computer connected to the Internet. Being a multi-bank system for making payments via plastic and virtual cards via the Internet, Assist holds a leading position in the Russian market and conducts more than 80% of all Internet transactions. No additional software other than a browser is required. The server software used is DynaSite. All calculations are carried out through the CyberPlat back office. To ensure the security of the transmitted data from the buyer, Assist uses the SSL (Secure Socket Layer) protocol. The system is not anonymous, but confidential customer credit card information (details) is not transferred to the online store.
Rapida provides private individuals, banks, trade and service enterprises with the possibility of remote payment service (remote
management of bank accounts, universal payment cards and money transfers). Technologies and principles of the system are based on the use of remote control of funds in real time, without opening additional bank accounts. You can pay for goods or services (mobile, long-distance or international calls, utility bills and insurance services, Internet access, use of paid information materials, purchases in online stores, etc.) round-the-clock by landline or mobile phone, as well as via the Internet. You can use the services of the system using the Rapida universal payment card. It combines the ability to pay for Internet access, long-distance calls, purchases in online stores.
« Webmoney Transfer » - A universal non-banking system that allows for instant payments on the Internet. The system is open for free use by all comers and has no territorial restrictions. The means of calculation in the system are WebMoney title units, the exchange rate stability and liquidity of which are provided by guarantors. Currently, WebMoney guarantors are:
· In Russia - the autonomous non-profit organization “VM-Center” (implements circulation in the “WebMoney Transfer” system of type R);
· In the USA - IMTB Inc. (implements circulation in the WebMoney system of type Z).
One WebMoney (WM) of type R is equivalent to the cost of one Russian ruble, 1 WM of type Z to one US dollar, 1 WM of type E to one euro.
All WebMoney available in the system is stored on the electronic accounts (wallets) of its participants (WM type R - equivalent to RUR - on R-wallets, WM type Z - equivalent to USD - on Z-wallets). At the same time, financial settlements between participants are carried out only using the same type of wallets. WebMoney stored in wallets at any time can be withdrawn from the system with conversion to the currency of their type by bank transfer to a bank account specified by their owner.
You can get WM:
· With guarantors by wire transfer from any bank, including Sberbank of Russia, as well as by postal transfer to the bank account of the guarantor with the indicated number of the replenished wallet (funds will be automatically converted to WM and credited to the wallet indicated during the transfer);
· Via a prepaid WM-card (replenishment of Z-wallets);
· From any of the participants in the system in exchange for goods, services or in exchange for cash.
Using WebMoney Transfer, you can make purchases in electronic stores, create your own stores that sell in real time on the Internet, and also make settlements with other participants in the system. WebMoney Transfer has a high degree of protection: all information transmitted over the Internet is encoded using an algorithm equivalent to RSA (see section 5.8) with a key length of 1040 bits.
« PayCash. " The participants in this payment system are the bank (the system operator) and customers. Clients can be individuals and legal entities, as well as robots - autonomously functioning computer programs that play the role of shops, casinos, dealing centers, bookmakers, etc., acting on behalf of both. For the bank, all customers are equal. In particular, in order to be able to accept payments, the client does not need any special “store” status. The client conducts all of his operations within the PayCash system using the special Wallet software. System participants interact with each other by sending messages over the Internet.
A future client using the Wallet opens a bank account and transfers money to this account. After that, he becomes a client. In order to be able to pay within the framework of the PayCash system, the client creates one or several payment books on his computer using the Wallet. Then, again, using the Wallet, transfers a certain amount of money from his account to one of the books, that is, to his computer. At the same time, the bank cannot determine which book the money is transferred to. In addition, the bank does not know to whom specific payment books belong. Now the client is ready to pay on the Internet, and anonymously, with the money that is on his payment books. Each payment is authorized by the bank.
The message chain at the time of payment is as follows:
Seller - buyer - seller - bank - seller - buyer.
At the first step, the seller asks for money from the buyer, and the signed transaction contract is included in the request. In the second step, the buyer sends the payment details to the seller. Further, the seller sends the payment data to the bank for authorization. Bank
conducts the necessary checks and sends the seller a receipt, as well as a receipt for the buyer. The seller informs the buyer of his decision and sends him the data encrypted by the bank in the name of the buyer.
It should be borne in mind that in the PayCash system, the client receives electronic cash at his disposal, which, like ordinary paper money, can be lost. For example, if a client’s computer “burns out” or is stolen, the client will lose all the money that he transferred to his computer and did not manage to spend. However, if the prudent client has kept backup copies of the Wallet settings for the last transfer of money from the account to the computer, then he can recover his money.
Thus, PayCash is an anonymous electronic money system, and not just a client-bank system. This is also expressed in the fact that the bank cannot, for example, at the request of the court, prevent the client from spending electronic money, which he managed to transfer to his computer, except by stopping all payments in the system. If the client needs to withdraw his money outside the PayCash system, he instructs to transfer part or all of the funds from his account in the bank of the system to the account in some non-virtual bank where he or his representative can physically receive them. When sending over a network, all data is encrypted with public keys no shorter than 1024 bits and symmetric keys no shorter than 128 bits, so intercepting encrypted messages in the foreseeable future is computationally impossible. When implementing the system, precautions are also provided that protect the client from attempts to steal information directly from his computer.
"Yandex money" . This system (Fig. 5.3) is not just a combination of reliable PayCash technology and a multi-million audience of Yandex, but also a partnership with hundreds of participants. Among the partners are banks, Internet providers, online stores, mail, utilities, and other payment systems. The affiliate program is open to all.
Fig. 5.3 The scheme of the Yandex.Money system
To become a member of the system, you do not have to have a bank account or a credit card, it is enough to register in the Yandex.Money payment system (Fig. 5.3). At the same time, an account associated with your Wallet will be automatically opened in the payment system. You credit your money to this account in any way convenient for you, after which you can make settlements, you can receive money in your Wallet from someone yourself. If you wish, you can always exchange electronic money from a virtual account for real money.
Work in the Yandex.Money system is as follows:
1) install the Internet program on your computer. Wallet and deposit money into your account in the processing center of the Yandex.Money system. Then replenish your "Wallet" with a certain amount of money - transfer it from the account in the processing center. Thus, you have electronic cash in your Wallet;
2) select a product or service in an electronic store and send the order (Fig. 5.4) - click the "buy" button. Your Wallet should be running at this moment. The "wallet" of the seller (store) exposes to your "Wallet" a payment request containing the text of the contract (sale and purchase agreement). The contract is signed with an electronic digital signature of the seller;
Fig. 5.5 contract of sale
3) your "Wallet" presents you the text of the contract. If you agree and you have enough money in the account, then your Wallet sends electronic money and the contract signed by your electronic signature to the Wallet of the seller (Fig. 5.5);
4) the "wallet" of the seller presents the electronic money received from you to the processing center to confirm their reliability (Fig. 5.6);
Fig. 5.6 Transferring money from the buyer's wallet to the seller’s wallet
Fig. 5.7 Response to the seller about the operation
5) in case of a positive verification result, the processing center of the Yandex.Money system credits the corresponding amount of money to the seller’s account. A message about this is transmitted to the “purse” of the seller along with the “receipt” for you (Fig. 5.7);
6) having received a response from the bank, the “Wallet” of the seller transmits a message about the successful crediting of money to his account, and sends a “receipt” to your “Wallet” (Fig. 5.8).
Fig. 5.8 Transferring a receipt to the wallet
7) when making a purchase using the Yandex.Money system, along with electronic money, a purchase and sale agreement between the parties to the transaction is also transmitted. During settlements, this agreement is automatically signed by electronic digital signatures of the wallet owners who send and receive money according to this agreement. Thus, the buyer remains an electronic document confirming the seller’s product obligations, with his electronic signature.
Doing business on the Internet has already ceased to be something innovative and has moved into the category of “for granted” concepts. Almost every store has its own store or catalog on the network.
However, how easy it is to find and order goods online, it is just as difficult to pay for these goods online, in this case I'm talking specifically about Belarus. In the best case, a courier with a terminal will arrive at you to pay by card. One of the reasons for this phenomenon lies in the low culture of the population in the field of electronic payments. She comes from a banal misunderstanding - how it works.
In this article I want to talk about the key points of making an online payment.
A bit of theory, diagrams and important points
First, a little theory.
1. To make your payment online, the client needs to convert their hard-earned money into electronic form. To do this, you need to go to the bank and open an account there. After that, cash dear to the heart turns into a set of bytes on one of the bank servers. In reality, you don’t need to go anywhere, because the banking system in the country is quite developed. According to statistics, more than 10 million bank cards are in the hands of the population, so we can safely say that every person in our country has a bank (debit, credit, salary) card, which means that there is "electronic" money. A bank that issues a payer card and ensures the safety of funds on it is called the Issuer.
2. In order for customers of different banks to be able to make payments and use any terminal or ATM, and not just the services of “their” bank, a common standard for interaction between banks and a certain regulator should be in place to ensure this interaction. This role is played by processing centers. These centers are international payment systems Visa, MasterCard. Within our country, there is also BelCart and the Banking Processing Center. Each bank issuing you a card with the Visa MasterCard BelCart logo is a member of this system.
3. In order to accept payments by cards, you again need to go to the bank and open a special account called “Merchant Account” or Merchant Account. The bank where such accounts can be opened is called the acquirer.
Let's see how all this already works on the example of the usual card payment in a regular store.
1. You are called the amount - you hold out your card.
2. Your card is carried out by a special device (terminal), which reads data from the card.
Important to understandthat only the card number and owner information are read.
The PIN code or CVC code are security features - data on them is not sewn in the magnetic strip or chip. Therefore, they cannot be read so easily. You may be asked to confirm the check by signing or entering a PIN. But you can’t just call or transfer this data. This is important to know and remember - in order to avoid possible fraud with your card
3. The terminal is programmed for a specific request to the acquirer bank, which the device issued to the store. This request contains a pointer to the merchant / store account number in this bank and card data.
4. Having received this request, the bank sends a request with the card data to the processing center. The processing center determines the card issuer and sends a request to this bank. The Issuer Bank, in turn, checks whether the requested funds are on the card account and, if so, freezes them and gives a positive response to the operation.
5. Bank Acquire gives a positive response to the terminal - and your payment has been successfully completed.
Important pointin this scheme, which many miss. The issuing bank precisely freezes money in the client’s account, and does not make an instant transfer from the client’s account to the seller’s account. Depending on the location and rules of the banks, the final transfer of funds may take up to several days. Often, many traders at this very moment have a misunderstanding. Payment approved - goods returned, but no funds in the account. It's okay - they will be in the coming days.
What fundamentally differs the payment on the Internet from the scheme described above? In fact, not many. Bank Acquirer and Bank Issuer, as well as the scheme of their interaction, remain unchanged. The only difference is how the request goes to the acquirer bank. In order to realize payment online, the Bank Acquire must open access to its data center. In order to protect itself, the bank opens this access either to its unit responsible for online payments, or to certified processing companies.
These companies fulfill 2 roles:
- They provide verification of payment for fraud before entering the bank’s network.
- They provide a convenient request form for trading floors. As a rule, you need to make a simple POST request for the resource of the processing company, which will then turn it into the desired request for the bank (in fact, it will pose as a terminal). It is also convenient in case of a merchant changing the Bank of Acquire - the trading platform does not need to change integration.
So, now let's see how it works in the case of online payment.
- You go to the basket on any trading platform.
- You are shown the order amount and the form for entering your payment and personal data. It looks like in the picture to the article.
- After filling in all the information, you click the "Pay" button.
- The platform collects your data and generates a request from the processing company.
- The processing company checks it and sends it to Bank Acquirer.
- Further the scheme is similar to the previous one: Bank Acquire - Processing Network - Bank Issuer
- The processing company gives the site the result.
There are even simpler payment schemes: the trading platform simply redirects the client to the Payment page of the Processing Company. Next, the client will be met with a convenient data entry form, they will show a beautiful twist while the payment is being processed, and they will also gently show the payment result and return to the site from which the client came.
This is the main conclusion: if you want to start accepting payments on your trading platform, you need to contact the Bank, which opens the “Merchant Accounts”, or the processing company that will study your business and select the suitable Bank Acquire for you, as well as help with integration your site.
If interest is expressed in this article, I can tell you in the following articles about the different types of integration of your site, touch on the main points of security, schemes for making and canceling payments.