N E W S L E T T E R CommerceNet�s Internet Payments Newsletter / August 2001 http://www.commerce.net/initiatives/sipayment/news/newsletters/2001/08.html ������ In This Issue Commentary: Exploring Merchant Concerns in eCommerce In Recent News Upcoming Events About This Newsletter How To Subscribe ������ Commentary: Exploring Merchant Concerns in eCommerce In last month�s issue, I explored consumer protection in the context of third-party payment providers. While consumer protection is important in that it encourages the adoption of new payment systems, I worry that the industry often overlooks merchant concerns and fails to consider merchant requirements. If commerce is to flourish on the Internet, I believe that the needs of both consumers and merchants must be taken into consideration. Although this seems like common sense, the industry has split into two camps over the role that merchants should play in addressing online fraud. One camp believes that merchants are largely to blame for all online fraud; if merchants would only clean up their act and follow solid business practices, they argue, chargebacks would just go away. The other camp believes that merchants are fundamentally innocent entities, at the mercy of teenage cyber-thieves, card association rules, and consumer-friendly regulations. Unfortunately, both factions are backed by entrenched interest groupsgroups that could profit by polarizing the situation, and will likely do so as this debate heats up. I suggest that we should at least try to strike a balanced view. Sure, merchants that establish fair policies for dealing with consumers and implement effective procedures for handling consumer purchases have fewer problems with fraud, and are probably healthier as a result. Certainly, merchants that tend toward sloppy business practices have much greater problems with fraud, or at least a lot more chargebacks. In this sense, perhaps they do get what they deserve. On the other hand, I think it is reasonable to say that merchants have shouldered far too much of the burden of protection from consumer fraud and abuseespecially given that the protective measures available to most merchants are slim at best. Perhaps the real issue is that online merchants now pay more for payment servicesand get fewer benefitsthan do their brick-and-mortar counterparts. This handicaps online merchants, retards the growth of eCommerce, and ultimately hurts consumers through higher prices. If these issues are going to be addressed with the introduction of new payment services, then the needs and requirements of merchants will have to be factored into the payment equation. Unfortunately, merchants have had little opportunity to influence the payments agenda in terms of either technologies or policies. What is needed is some non-aligned forum where merchants can share their experiences with the current payment systems and define their common needs and requirements for new payment systems. Through such a forum, merchants will be able to refine and improve their own payment practices, while influencing developments of new payment services. At the same time, the merchant community could begin to contribute constructively to the debate over how public and private policies should evolve to govern new Internet payments. This forum should be international in scope, and should investigate how payment policies can be regularized worldwide. After all, consumers and merchants alike want to be free to conduct business anywhere in the worldthat is the great promise of the Internet. If you want to contribute your energy or your thoughts on bringing a global merchant payment forum to life, please drop me a line. I have some of my own ideas, but I would love to hear yours. Chuck Wade [EMAIL PROTECTED] +1 (508) 625 1137 ������ In Recent News Common Merchant Payment Toolkit Russ Jones takes a look at alternative payment systems from the merchant's perspective, and concludes that almost all payment industry stakeholders would be better served by a common merchant payment toolkit. This report argues that the existence and widespread deployment of such a toolkit would increase the market adoption of new, alternative payment instruments. http://www.commerce.net/research/technology-applications/2k1/2k1_12_r.html U.S. Government and States to Regulate Mobile Payments The U.S. Federal Trade Commission is revising pay-per-call rules, which may impact how non-telephony charges are added consumer telephone bills. California has already begun to regulate the use of mobile phones as payment devices. CommerceNet's Kaye Caldwell examines the new regulations to see if they provide adequate consumer protection and reflect current industry concern with payment fraud. http://www.commerce.net/research/public-policy/2k1/pp3.7-01GovRegMobilePayts.pdf NACHA Internet Secure ATM Payments (ISAP) Report NACHA has recently concluded its ISAP Pilot and issued a 54-page Pilot Results Document. The Internet Secure ATM Payments (ISAP) pilot demonstrated a process that lets consumers use ATM/debit cards to make Internet-initiated debit payments that can be processed through electronic funds transfer (EFT) networks. Digital signatures are substituted for personal identification numbers. http://internetcouncil.nacha.org/Projects/ISAP_Results/isap_results.htm Fraud Resource Center Opens In support of National Fraud Awareness Week, CyberSource has created an online Fraud Resource Center devoted to merchants accepting credit-card-not-present payments. The site contains up-to-date fraud statistics, fraud news, useful anti-fraud tools, and links to related resources. http://www.cybersource.com/fraud_resource_center/ Understanding B2B Payment Options NACHA has recently released a whitepaper on B2B payment options that provides a helpful, even-handed comparison between ACH, MasterCard RPPS, Visa ePay, wire transfer, and traditional checks. For each payment method, the paper presents an overview, process flows for buyer- and seller-initiated payments, functional differentiators, and an economic analysis. http://cebp.nacha.org/publicdocs/publicdocs.html Wireless ATM Docking Stations What if an ATM could be shrunk down, creating a wireless docking station that dispenses cash, tickets, and stamps? NCR has been demonstrating an egg-shaped concept device that interacts with the consumer through a wireless PDA. While the device now communicates via infrared beam, it doesn�t take much of a leap to see this as yet another Bluetooth application. http://www.thebankingchannel.com/technology/story.jsp?story=TBCHBNRNYOC ������ Upcoming Events Electronic Check 2001 September 10-11, 2001 / Fort Lauderdale, Florida For financial- and banking-industry professionals. Sponsored by NACHA. http://www.nacha.org/conferences/Echeck2001/ American Banker Digital Payments Conference 2001 September 13-14, 2001 / San Francisco, California Single-track conference on leading-edge Internet payment issues. Everything from person-to-person systems and single-use numbers to PIN-less payments through EFT networks. Sponsored by the American Bankers Association. http://www.tfconferences.com/conferences/PAY/ Electronic Bill Presentation and Payment for Financial Institutions September 17-18, 2001 / London, U.K. Explores the role of banks in the EBPP value chain. Sponsored by Marcus Evans. http://www.marcusevans.com/events/CFEventinfo.asp?EventID=2691 e-Smart 2001 September 19-21, 2001 / Cannes, France A worldwide technical and scientific conference focused on smart-card-related research work. Sponsored by EUROSMART, the European Smart Card Industry Association, and Java Card Forum. http://www.eurosmart.com/ NACHA Internet Council General Meeting September 19-21, 2001 / Washington, D.C. Members and invited guests only. Sponsored by NACHA. http://internetcouncil.nacha.org/ American Banker Online 2001: Financial Services in Cyberspace September 23-26, 2001 / Palm Springs, California Seventh annual conference devoted to online delivery of financial products and services. Sponsored by Thomson Financial Conferences and American Banker. http://www.tfconferences.com/conferences/OL2001/ European Plastic Card and Online Fraud Prevention September 24-25, 2001 / Zurich, Switzerland Conference sessions and workshops exploring online credit card fraud in Europe. Sponsored by IIR Conferences. http://www.iir-conferences.com/site/_prod-grp.cfm?DirName=KJ1823&ConfCode=KJ1823&iv=26 Payments in Euros in the Internal Market September 24, 2001 / Brussels, Belgium This conference examines the impact of the euro on existing cross-border payment systems in the internal EU Market. Sponsored by the European Central Bank. http://europa.eu.int/comm/internal_market/en/finances/payment/conference/ National Electronic Check October 1-3, 2001 / Tucson, Arizona For financial and banking industry professionals. Sponsored by BAI. https://secure.bai.org/register.html?eventid=4248 Internet Transaction Security October 8-10, 2001 / Dallas, Texas Conference and trade show covering PKI, smart cards, and wireless and biometric technologies. Sponsored by CardTech/SecurTech. http://www.ctst.com/events/its2001/splash.htm Electronic Commerce World Fall 2001 October 9-12, 2001 / Chicago, Illinois Broad eCommerce conference and trade show. Sponsored by Electronic Commerce World magazine. http://www.ecmediagroup.com/confer/ecwchi/ Smart Card Alliance 2001 Annual Meeting October 9-12, 2001 / McLean, Virginia Open to both members and non-members. Sponsored by Smart Card Alliance. http://www.smartcardalliance.org/ Cartes 2001 October 23-25, 2001 / Paris, France Conference and trade show showcasing smart-card technologies and related applications, including payment technologies. Sponsored by EUROSMART. http://www.cartes.com/ FSTC 2001 Fall General Meeting October 23-24, 2001 / Atlanta, Georgia Members and invited guests only. Sponsored by FSTC. http://www.fstc.org/ E-Payments 2001- Technology, Standards, Risk and the Next Generation Internet October 24-25, 2001 / Atlanta, Georgia Two-day conference open to any payment industry professional. Organized by the Electronic Payments Forum with sponsorship from FSTC, the Cross-Industry Working Team, and CommerceNet. http://www.epf.net/ ������ About This Newsletter CommerceNet is a global, not-for-profit organization of leading business, government, technology, and academic minds working together for the advancement of eCommerce worldwide. As guided by its partners and sponsors, CommerceNet focuses on five initiative areas: Evolving Supply Chains; Next Generation Internet; Security and Internet Payment; Government, Public Policy and Advocacy; and Pervasive and Wireless Internet Access. In these areas CommerceNet is developing important new technologies and practices that will chart the course for the way companies conduct business. Through pilot projects around the world, CommerceNet�s members are exploring the viability and applicability of new Internet payment systems. Rather than merely demonstrating technical solutions, these pilots address business concerns, policy matters, and integration with both upstream and downstream eCommerce transactions. Pilot participants include financial institutions, government agencies, technology vendors, and both large and small users of payment services. For more information about CommerceNet�s Security and Internet Payment Initiative, visit http://www.commerce.net/initiatives/sipayment/. ������ How To Subscribe This newsletter is posted monthly to CommerceNet�s internet-payments list. If you would like to receive this newsletter at no cost, please register online at http://www.commerce.net/initiatives/sipayment/groups/i-payment.html. ������ Copyright 2001 CommerceNet. All rights reserved.
