Transcript No Slide Title

First Ecom
Global E-Payment Processing
http://www.firstecom.com
E-Commerce
• E-commerce boom started in 1998
– Yahoo, Amazon.com, eBay, etc
• Only the U.S. is participating in this boom
• Explosive growth expected in Asia
• Major limitation is lack of processing
capabilities, multiple currencies
E-Commerce Worldwide
• According to Forrester Research:
– Currently valued at US$12 billion
– Expected to be US$1.1 trillion by
2002
E-Commerce in Asia
• According to Goldman Sachs:
– End of 1998, 15 million Internet users and an
e-commerce market of $700 million
– By 2003, 64 million Internet users and $32
billion in e-commerce sales expected
– Twice the growth rate expected in the U.S.
during the same period
Internet Evolution
• Phase I
– Static web site - Glorified Brochure
– Marketing Driven
– HK$ 78K - 390K
– US 1995/96
– Europe 1997/98
– Asia 1997/98/99
Internet Evolution
• Phase II
– Moving from static to basic interactivity
– Content becomes more important
– Marketing & IT driven
– HK$ 390K - 2.0M
– US 1997/8
– Europe 1998/99
– Asia 1999
Internet Evolution
• Phase III
–
–
–
–
–
–
–
–
Fully interactive web site
Revenue source - ROI
Requires new business model
Driven by Upper Management
HK$2.0 Million+
US 1999
Europe 2000
Asia 2000/2001
Challenges
• Lack of online credit card processing
capabilities in Asia and Europe
• Banks missing E-commerce processing
partner
• Internet penetration still low
• Perception of security risks
Positioning Statement
“First Ecom provides a global,
secure, easy to implement,
low cost, electronic payment
processing gateway.”
Why First Ecom?
• Idea developed out of necessity
• Tremendous pent-up demand in the
market
• Many different disciplines came
together to create the First Ecom
concept
Why First Ecom?
• Solutions for both banks and merchants
– Offshore Payment Processor
– 3rd Party Processor
– In-Country Processor
Offshore Payment Processor
Card
Network
Bank of
Bermuda
(Acquirer)
First Ecom
Payment
Gateway
First Ecom Master Merchant
Approval /
Due Diligence /
Merchant Account /
Money Transfer /
Merchant Service
Internet
Card
Issuers
Shopping /
Payment
Cardholder
Cardholder
Merchant
Merchant
Offshore Payment Processor
• Key Benefits to Merchant
– Quick time to market
– Multi-currency support
– Tax neutral jurisdiction
– Easy to implement
– Low cost
3rd Party Processor
Card
Network
First Ecom
First Ecom Payment
Processor
Gateway
Card
Issuers
3rd Party Processor
Merchant
Acquirer
Internet
Shopping /
Payment
Approval /
Merchant Account /
Settlement /
Merchant Service
Cardholder
Cardholder
Merchant
Merchant
3rd Party Processor
• Key Benefits to Acquiring Bank
– Quick time to market
– Bank retains control on merchant evaluation,
selection, and pricing
– Minimal modifications to merchant operations
– No modification to Bank Credit Card System
– Transparent to merchant
– Easy to implement
– Low cost
In-Country Processor
Card
Network
First Ecom
First Ecom Payment
Processor
Gateway
In-Country
Processor
Card
Issuers
Shopping /
Payment
Internet
POS
Merchant
Cardholder
Merchant
Acquirer
Cardholder
Approval / Merchant Account /
Settlement / Merchant Service
POS
Merchant
Traditional
Channel
Merchant
Merchant
E-Commerce
Channel
In-Country Processor
• Key Benefits to Banking Consortium
– Zero cost for system development
– Member Bank retains control on merchant evaluation,
selection, and pricing
– No modification on Member Bank Credit Card System
– Transparent to merchant
– Support of local credit & debit authorization
– Support of local clearing and settlement
– Provides EBPP capability
Purchase Process
5) Purchase Confirmation sent to buyer
1) Buyer browses Internet &
adds items to shopping cart
Web user
(Buyer)
Merchant
Web Site
Internet
2) Merchant sends Order Form
to buyer with order details
4) Authorization details
sent to Merchant
First Ecom
Gateway
3) Completed Order Form
& card details sent to Gateway
Process First Ecom
Sends to payment
network via payment
switch
First Ecom
Payment Network (Visa
Net/I.Net etc.) routes inquiry
to issuing bank
Payment
Network
Issuing Bank
Inquiry routed back with
authorization/rejection
Authorization Advice
First Ecom
Online to
Merchant
Via Secure
Email to
Merchant
Merchant
Account
Reporting
System
(MARS)
MARS
•
•
•
•
Accessible via Internet
View transaction history and records
Secure access
Four functions:
–
–
–
–
Authorization
Settlement
Cancellation
Refunds
Merchant Payment Process
Issuing
Bank
Payment
Network
Funds are deducted from the
Buyer’s card by the issuing bank
Money available to
Merchant in chosen
currency
Card Association pays the
money into the Bank
Bank of
Merchant
Money deposited in
merchant account
Bank
US$
HK$
S$
C$
¥
€
£
Secure Sockets Layer (SSL)
versus
Secure Electronic Transaction (SET)
SSL vs. SET
Characteristic
Additional Cost Involved
Vendor Software Needed
Time Consuming
Difficult to Use
Widely Adopted
Industry Standard
Installed on Most Browsers
Who Needs It
SSL
No
No
No
No
Yes
Yes
Yes
SET
Yes
Yes
Yes
Yes
No
No
No
Only
ISP/website
Every party
involved
Security
• Online Authorization using SSL with 40 –
128 bit encryption – prevents card fraud
• Content authentication and encryption:
OpenPGP (RFC2440) - prevents buyer fraud
• The credit card number is not disclosed to
the merchant - prevents merchant fraud
Partnerships
•
•
•
•
•
•
•
Expert Web
FedEx
HKSite
HLB
Inter-Merchant
Intershop
Microsoft
•
•
•
•
•
•
•
Modem Poppe
Sterling Commerce
Sun Microsystems
Sybase
Topsoft
USWeb/CKS
UUNET
Goal
For Asia to fully participate in
the e-commerce revolution
sweeping the world.
First Ecom
Global E-Payment Processing
http://www.firstecom.com