significant amount of the credit card infrastructure costs is to cover advancing
the money for payment and various kinds of unauthorized use of cards ...
including by merchants (one of the reasons why it may be difficult to get
merchants authorized)
SSL doesn't take into account any of those issues.
X9.59 (draft financial industry standard for all account based payments) can
eliminate most forms of unauthorized use ... reducing infrastructure costs ...
along with the possibility that it can somewhat reduce the difficulty of
merchant be authorized for taking transactions since it eliminates some part of
risk associated with authorizing merchants. however risk of merchant not
fullfilling delivery service/product still remains ... but that is true for all
forms of payment, the question for the consumer vis-a-vis credit-card mode is
the advantage they gain from having their bank help in delivery-versus-payment
conflicts (DVP has been issue in commerce for a long time and exaserbated in
distance & non-face-to-face transactions).
however, X9.59 is agnostic with respect for use as credit or debit payments
(both types
flow over ISO8583/ISO8583-like networks).
"Rachel Willmer" <[EMAIL PROTECTED]> on 09/23/99 03:27:22 PM
To: "Arnold Reinhold" <[EMAIL PROTECTED]>
cc: "Robert Hettinga" <[EMAIL PROTECTED]>, [EMAIL PROTECTED],
[EMAIL PROTECTED], "Digital Bearer Settlement List" <[EMAIL PROTECTED]>
(bcc: Lynn Wheeler/CA/FDMS/FDC)
Subject: Re: Why smartcards? (was IP: Smart Cards with Chips encouraged)
Arnold Reinhold wrote:
> And what is the value proposition for the consumer? SSL works swell.
This is true iff :
(1) the consumer is an adult who has a credit card
(2) the consumer is content that the transaction is traceable through
their credit card statement
(3) the consumer is happy to pay the extra cost needed to cover the cost
of the credit card hierarchy (which may be hidden in the ticket price
but most certainly is there when the merchant calculates the selling
price as he considers the cost to him of the credit card charges,
potential chargebacks, insurance against chargebacks, etc)
(4) the consumer wants to spend money with a merchant who is able to get
a merchant account with a credit card processor (this is a real problem
over here in the UK)
or
(5) the consumer wants to exchange money with a merchant rather than a
friend
In short, for the commerce model we have today (essentially the old mail
order metaphor taken online), SSL and credit cards works just fine.
For tomorrow's other commerce models, you need (and will have) digital
cash smartcards, loyalty smartcards, identification smartcards (probably
all on the same card). SSL doesn't provide a solution for everything.
Rachel
PS I'm considering starting a new mailing list to look at smartcards on
the Internet - would anyone find this interesting/useful ? the list that
this email is getting forwarded to seems rather large...
