1. Entrepreneurship
Secure Ordering
Presented By
Mrs. Bowden

2. Warm Up
Read p. 69, 101, and 369

3. Today we will:
Discuss and illustrate the process of placing secure orders and payments using online services from a customer and company perspective.

4. Accepting Credit Cards in E-Commerce Transactions
Advantages
Many people have credit cards
Credit cards facilitate impulse purchases
Consumer like to use credit cards online
Protection against fraudulent merchants
Provides merchants with information useful to marketing
Disadvantages
Costly set-up fees
Must qualify for merchant status
Not suitable for sales of downloadable soft goods
Some customers do not have credit cards
Some customers fear credit cards online
High interchange fees for “card not present” transactions
Chargebacks

5. Other Options for E-Commerce Payments
PayPal
No set-up fee, easy to qualify
Easy to integrate in Web site
Chargeback protection program
Fee at most 2.9% of sale plus 30¢
40 million users (good or bad?)
Requires customer registration at PayPal
E-Check
Low fees: payments processed on ACH network
Settlement faster than a paper check
Can reduce merchant risk by guaranteeing payment (for a fee!)
Requires consumer to enter bank and account information online
Fewer consumer protections compared to credit cards
Potential for consumer repudiation (chargeback)

6. Other Options for E-Commerce Payments
Bill Me Later
Instant “loan” invoicing
Can increase sales and average ticket
30-40% less expensive than credit cards
Signature debit cards
Many consumers hold these cards
Processed similar to credit cards but can have somewhat lower fees
PIN-less debit cards
Low fees
Useful only to certain industries
Checks (personal, money orders, cashier’s)
Many consumers still prefer these options
Can slow completion of sale if shipment is delayed until check clears

7. Security and privacy Micropayments Other Considerations
Policymakers are concerned over ID theft and security breeches that facilitate online fraud
Micropayments
Single purchase sales for online content is becoming more popular (e.g., online music)
Processing fees for established payment options are prohibitive for small dollar purchases
Promising alternative: aggregation schemes