research argent !! need to be completed almost done

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Yaser I. Tawash, Computer Information Science

Chestnut Hill College

Current Alternative Payments

Within alternative payments, there are many of alternative payment providers in the market. However, in terms of transaction value, four providers are controlling the market, and three of them are controlled by ecommerce leaders. The top leader of alternative payment in the market is PayPal, followed by Alipay, Tenpay, and Skrill. Skrill, previously called Money Bookers, which is controlled by CVC Capital Partners and Investcorp Technology partners, is based in the UK. Tenpay and Alipay, the leaders of alternative payment in Asian market, are the two biggest alternative payment providers after PayPal.

Even though alternative payment, e-wallet, is covering the ecommerce market, some of the alternative payment providers are moving to cover the physical stores too. Some of the leading companies, such as PayPal and Square, have been offering solutions to the physical stores. The Point of Sales (POS), which is the main selling system for physical stores, is what such companies are moving toward to enhance.

PayPal.

PayPal is a payment system company that was founded in 1989, which simply offers customer-to-customer (C2C) and business-to-customer (B2C) money transfer services. PayPal offers five types of payment solutions.

Express checkout for E-commerce platforms. The express checkout is a common way to implement faster money transactions that most of the alternative payment providers also offer. However, PayPal’s express check out offers different methodologies for the express checkout. PayPal offers various SDK’s that help developer to build their web apps and mobile apps easily.

Recurring payments. A recurring payment handles subscription and other payments that occur on a fixed schedule. It allows recurring payments, which is established by the buyer setting up a billing agreement with the merchant on PayPal. For Express Checkout, the billing agreement can be established either in advance or when the buyer first makes a purchase; in either case, it occurs when the customer call Express Checkout API operations. (PayPal, 2017)

When the platform owner supports recurring payments for a buyer, the owner creates a recurring payments profile. The profile contains information about the recurring payments, including details for an optional trial period and a regular payment period. Both periods contain information about the payment frequency and payment amounts, including shipping and tax, if applicable. After creating a profile, PayPal automatically queues payments based on the billing start date, billing frequency, and billing amount. Payments reoccur until the profile expires, there are too many failed payments to continue, or the user cancel the profile. (PayPal, 2017)

Reference Transaction. A reference transaction is a financial transaction from which subsequent transactions can be derived. For example, when a buyer makes a purchase on a merchant site, PayPal generates a transaction ID, called a reference transaction ID. Later, the developer can use the reference ID to initiate another transaction. This topic describes concepts for billing agreements and reference transactions for recurring payments of varying amounts of money on a varying schedule. (PayPal, 2017)

Parallel Payment. In parallel payments, a merchant acts as marketplace host. Consider an online travel agency. An online travel agency marketplace is a typical example of parallel payments in use. The buyer purchases airline tickets and makes reservations from various merchants such as hotels, car rental agencies, and entertainment venues hosted on the site. By implementing parallel payments through Express Checkout, the marketplace host accepts PayPal as a payment method. The host also provides the buyer with a consolidated order on the PayPal Review the merchant information page, summarizing expenses, itineraries, and other supporting information. Buyers see travel information, including cancellation fees, directly from the supplier on the Transaction Details page and in an email message. (PayPal, 2017)

PayPal’s Money handling. Since PayPal’s location is mainly virtual and there is no physical location to transfer, withdraw, and deposit money, the main location for these transactions are on either on their web app or on their mobile app. However, there is still one part missing, the money. PayPal’s money handling is basically in two ways, either with the customer adding his/her bank account or debit/credit card number. From there, every transaction made throw a PayPal account will withdraw the money from the bank account using ACH or debit/credit card using the debit and credit card network and deposit it into the PayPal account and proceed with transferring the money to the other PayPal Account. Withdrawing money from a PayPal account is basically by transferring the money to the bank account or card that is listed on the account.

Strip

Stripe is an instant-setup payment platform that enables users to accept payment online and in mobile apps, which is considered as a payment processor. Stripe only enables users to collect card details up front for a seamless billing in the background (Stripe, 2017). Just like PayPal, Strip supports the instant payments and the recurring payments.

Instant Payment. Different from PayPal, Stripe uses tokens to save credit/debit card information. After the developer, or the platform owner, collects and tokenizes the customer’s credit card using Stripe’s Checkout or Stripe’s elements, the platform owner charge the card instantly and securely. (Stripe, 2017)

Recurring payment. In the same way as Instant Payment, by using tokens, the developer must create a customer object that makes it easy to save the customer card information. However, since Stipe uses tokens to process payments, the developer wouldn’t be able to process it without including the token. So, instead of charging the card immediately, the developer should create a new customer object, saves the token on the object, and this will let the developer charge customer anytime in the future automatically. (Stripe, 2017)

Point of Sales

The term, Point of Sale (POS), is applicable to shopping stores, cashier counter, or a location where such transaction can occur. It can also apply to the actual Point of sale Hardware and software including: electronic cash register systems, touch-screen display, barcode scanners, receipt printers, scales and pole displays. In the most basic sense, if something can be exchanged for monetary value - a Point of Sale System can be used.

The evolution of mobile applications and mobile payments industries has been accompanied by the continual introduction of new technologies. Currently, two mobile technologies are attracting attention: host card emulation (HCE) with Near Field Communication (NFC) and Bluetooth low energy (BLE). With high expectations for mobile payments and major investments in mobile wallet platforms and NFC enablement, these two technologies have raised questions about business models, product development plans, and the pace of deployment. (Smart Card Alliance, 2014)

Square. Square, which was founded in 2009, is a company that offers different POS hardware and services, including processing payments (Wessberg, Rustner, and Roman, 2014). Square app, which is built for IOS and Android devices, is their main point for handling payments and printing receipts. They also have different hardware solutions for handling the payment part of the POS. Hardware such as Square Magstripe Reader, which reads the data on the magnetic stripe on the card, and Contactless and Chip reader, which accepts chip card and NFC Payments, were made to help simplify the payments in POS systems. (Square, 2017)

NFC. Near Field Communication, or NFC, is a set of standards for two-way short range radio communication between two NFC-enabled devices. The devices can be active or passive but for the communication to function, at least one device needs to be active. Passive NFC devices are often referred to as “NFC chips” or “NFC tags”. The technology is used for contactless data transfer between enabled devices within a range of 4 centimeters and if one of the devices is passive, small amounts of data can be transferred. (Wessberg, Rustner, and Roman, 2014)

In a Near Field Communication (NFC) transaction, an NFC-enabled smartphone communicates via a Radio-Frequency Identification (RFID) link with a contactless transmitter attached to a POS device. The cardholder pays using a card held in digital form in their mobile wallet, which is either stored in a secure element on their smartphone’s SIM card, or in the cloud using a technology called Host Card Emulation (HCE). (Arnfield, 2015)

BLE. Bluetooth low energy (BLE) is a wireless computer network technology designed and marketed as Bluetooth Smart by the not-for-profit non-stock corporation Bluetooth Special Interest Group (SIG). While originally intended for use in the healthcare, fitness, security, and home entertainment industries, BLE shows promise for geolocation and other functions in stadium, retail, restaurant, transit and other applications. In comparison with "classic" Bluetooth, BLE requires considerably less power and incurs lower costs while providing a similar or larger communication range. (Smart Card Alliance, 2014)

From a technology perspective, Wessberg, Rustner, and Roman (2014) believe that BLE beacon technology is a real challenger to NFC for conducting device based transactions in-store. Apple’s early inclusion of the technology and the fact that they, and PayPal, are now pushing BLE beacon devices to merchants speak in its favor. They also believe that customers will prefer the feature which allows them to hold their smartphone as they normally do when approving a transaction. Also, merchants will likely be in favor of BLE beacons as it gives them a direct channel to communicate with customers at a very crucial point of their decision making. It should also be noted that there are few arguments for smartphone providers to choose between BLE and NFC rather than include both, which is the case in the iPhone 6. It will then be up to the customer to choose how to act at the checkout, or which M-Wallet provider to use.s

References

Arnfield, R. (2015) Mobile Wallets 101. Networld Media Group. Retrieved from http://emergingpayments.org/wp-content/uploads/2017/02/Mobile-Wallets-101-Cardlinx.pdf

PayPal. (2017) PayPal Documentation. PayPal, Inc. Retrieved from https://developer.paypal.com/docs/

Smart Card Alliance (2014) Bluetooth Low Energy (BLE) 101: A Technology Primer with Example Use Cases. Smart Card Alliance. Retrieved from https://www.securetechalliance.org/smart-card-alliance-explores-opportunities-and-challenges-with-bluetooth-low-energy-ble-mobile-technology-in-new-white-paper-ble-101/

Stripe. (2017) Stripe Documentation. Stripe Company. Retrieved from https://stripe.com/docs/

Wessberg, C. Rustner, O. Roman, P. (2014) The Future of Online and Mobile Payments. International technology Research.