Electronic Payment Scheme

Electronic Payment Schemes
A Layered Protocol Model.


A three layer model is used to compare payments schemes.
Policy:The semantics of the payment scheme. This includes refunds policies, and the liabilities incurred by customers, merchants and financial institutions.

Data flow: The requirements for storage of data by and communications between the parties. This includes not only the data flows for payments themselves but also for refunds, account enquiries and settlement.

Mechanism: The methods by which the necessary security requirements for messages and stored data are achieved.

All three abstraction levels are tightly coupled since policy makes requirements of data flow and data flow makes requirements of mechanism.

Payment Protocol Models
Cash:Cash consists of a token which may be authenticated independently of the issuer. This is commonly achieved through use of self authenticating tokens or tamper proof hardware.
Cheque <\b>Cheques are payment instruments whose validity requires reference to the issuer.

Card:Card payment schemes provide a payments mechanism through the existing credit card payment infrastructure. Such schemes have many structural similarities to cheque models except that solutions are constrained by that structure. A key feature of card payment systems is that every transaction carries insurance.


Methods and Types of Electronic Payment
An electronic payment is any kind of non-cash payment that do not involve any paper check. Methods of electronic payments include credit cards, debit cards and the ACH (Automated Clearing House) network. The ACH system comprises direct deposit, direct debit and electronic checks (e-checks).

Three main types of transactions:

1. A one-time customer-to-vendor payment is for shopping online e.g. at Amazon. Consumer clicks on the shopping cart icon, type in the credit card information and click on the checkout button. The site processes that credit card information and many times sends e-mail notifiying that the payment has been received. To pay by e-check, consumer types in his account number and bank's routing number. The vendor authorizes payment through the customer's bank, which then either initiates an electronic funds transfer (EFT) or prints a check and mails it to the vendor.


2. You make a recurring customer-to-vendor payment when you pay a bill through a regularly scheduled direct debit from your checking account or an automatic charge to your credit card. This type of payment plan is commonly offered by car insurance companies, phone companies and loan management companies. Some long-term contracts (like those at gyms or fitness centers) require this type of automated payment schedule. <\li>
   
3. To use automatic bank-to-vendor payment, your bank must offer a service called online bill pay. You log on to your bank's Web site, enter the vendor's information and authorize your bank to electronically transfer money from your account to pay your bill. In most cases, you can choose whether to do this manually for each billing cycle or have your bills automatically paid on the same day each month. <\li>
   
   
   <\ol>
   Benefits of Electronic Payment
   
   
   Convenient for the consumer Account information such as credit card number and shipping address once entered is stored in a database on the retailer's Web server. When the customer comes back to the Web site he just needs to log in with username and password. Completing a transaction is just as simple as clicking mouse. Once just needs to confirm purchase.<\li>
   
   1. Electronic payment lowers costs for businesses. The more payments they can process electronically, the less they spend on paper and postage. Offering electronic payment can also help businesses improve customer retention. A customer is more likely to return to the same e-commerce site where his or her information has already been entered and stored. <\li>
      
      
      Problems with Electronic Payment
      
      1. The main drawbacks to electronic payments are concerns over privacy and the possibility of identity theft. Fortunately, there are many safeguards available to protect your sensitive personal information from falling into the wrong hands. <\li>
         
      2. Time Consumed in checking privacy/authenticity: Some people simply dislike making electronic payments. They find the setup too time-consuming and do not want more logons and passwords to remember. Further many people like familiar ways of writing checks and dropping envelopes in the mail. Regardless of these concerns, electronic payment will likely continue to rise in popularity. <\li>
         
         
         Setting Up E-Payment for Online Business
         Its very difficult for a business man to decide what kind of set up he wants. In case a customer has a small business and wants to set up online payments via Web site.
         
         1. Decide whether one needs to outsource payment solution or handle it in-house. For those who want all-in-one solution, services like PayPal. Such services make it easy for one to accept credit cards and other forms of electronic payment from the website. When a customer enters his or her information on the site, payment service authorizes the transaction and transfers funds to the account. These services charge a processing fee per transaction. In case one needs to process payments in-house, the first thing he need to do is set up a secure server. This is a computer that uses encryption to make it difficult for intruders to intercept confidential information.
         Secure Socket Layer (SSL) technology is used to encrypt the data. Business man needs to apply for an SSL certificate online. Once the business man has an SSL certificate he needs to register his site with a digital authentication service. A digital certificate validates that the site receiving his customers' information is the correct one. It assures customers that site is legitimate and can be trusted.
         2. Purchase shopping software: Once a secure server is build one needs to buy shopping software that allows a customer to choose products from the website and add them to a virtual shopping cart. When customers are ready to complete their orders, they click on a "checkout" link that takes them to secure server, where they enter their credit card information.
         3. One needs a system to process credit card payments and an Internet merchant account with a bank. Credit card payment processing services are available through online companies like VeriSign. Such companies provide software that validates customer's credit card information over secure server. Some businesses also choose to accept electronic checks from customers.
         Step by Step Online transactions
         1. Shopping on the Internet : The consumer selects an item to purchase on the Internet.
         2. Initiating the Transaction After entering shipping and credit card information, the consumer is presented with a summary of the item, price, and billing information. The payment information is secured with industrial strength encryption and forwarded with the order form to the merchant's CyberCash CashRegister™.
         3. CashRegister Picks up Merchant Information
         • The merchant's identification information is automatically added to the encrypted payment request.
         4. Through the CyberCash Firewall to the Bank
         • Still encrypted, the payment request is forwarded over the Internet and is received through a secure firewall by the CyberCash CashRegister server.
         • CyberCash instantaneously passes the payment request to the merchant's financial institution, which zips it on to the consumer's credit card bank to approve or decline payment authorization.
         5. Bank Sends Approval
         • The consumer's credit card bank sends its response back through the merchant's financial institution to the merchant's CashRegister.
         • The shopper also receives confirmation of credit card approval.
         • The entire authorization process takes under 20 seconds.
         6. Transaction is Completed and Captured
         • The merchant delivers the item to the shopper.
         • The merchant requests financial settlement, or "capture", of the transaction through the CashRegister server.
         Funds are transferred to the merchant's account by its financial institution
         Electronic Payment Association
         The National Automated Clearing House Association (NACHA) is the Electronic Payments Association, has helped increase the use of e-payments and e-checks. This not-for-profit association develops operating rules and business practices for the ACH network to make sure it stays efficient, reliable and secure for keeping electronic payments that way, too. NACHA governs the nationwide Automated Clearing House (ACH) network. Through this network NACHA's 11,000 member banks and other financial institutions offer direct deposit, direct debit and e-checks for consumers and businesses. It facilitates check bank account balances online, make purchases from online stores with a debit card or pay bills from bank's Web site The association develops electronic payment practices beyond the ACH network for areas like Internet commerce, financial electronic data interchange (EDI) and international payments. As one of its services, NACHA tracks the growing use of electronic payment through quarterly and annual reports. For example, the ACH network handled nearly 16 billion payments totaling $30.3 trillion in 2006, a 14.5 percent increase over 2005, according to NACHA statistics. That includes payroll direct deposits, Social Security benefits, tax refunds, payment of 8 billion consumer bills and more. The rate shows that the volume of electronic payments continues to double every five years. While most of NACHA's offerings are targeted to its member financial institutions, the association offers help for consumers and small businesses through an interactive Web site. on paper to save trees, fuel and water. The alliance brings together NACHA, the U.S. Federal Reserve, and leaders of the financial and consumer billing industries.
         
         http://www.vivtek.com/cybercash/info.html
         Electronic payments:
         Merchant's website must be able to accept and process secure online payments. Two important things required are:
         1. Internet Payment Service : The Internet Payment Service, such as CyberCash, enables the merchant to accept online payments from their customers and securely processes these payments from a Merchant's Web storefront through the existing system of financial institutions and credit card processors. The three key qualities merchants expect in an Internet payment service are security, ease-of-use, and price performance. With the right payment service, merchants can have all three. Here are some features to consider:
         a. Security
         Merchants want the guarantee that they will get paid for their goods and services and that their customers will feel confident and comfortable shopping at their website. Thus merchants need an Internet payment service that will provide them with the security to deal with credit card authentication, transaction confidentiality, server host integrity, and server virus protection. At a minimum, an Internet payment service should provide SSL (Secure Socket Layer) protocol security, which encrypts the customer's payment information while it moves over the Internet so that it cannot be deciphered. But SSL alone may not be strong enough for this entire transaction process. CyberCash, for example, offers powerful triple DES encryption, as well as SET (Secure Electronic Transaction) capable encryption and authentication. Though electronic commerce is continuing to grow at a rapid rate, shoppers are still skeptical about security, and have not been quick to trust that personal information, such as a credit card number or address, is safe to send over the Internet. However, an Internet payment service like CyberCash, with a reputation for using the strongest Internet security technology, improves consumer perceptions about security.
         b. Ease-of-Use
         For Internet payments, ease-of-use means more than just simplicity. Merchants need a payment service that meets the short-term and long-term needs of their business with 24x7 reliability so they can focus on what they do best - selling. The primary Internet payment features that make managing a business easier, include:
         • Real-time payments – Real time "authorization" (bank approval of the sale) and "capture" (depositing and settling a payment) enable the merchant to complete the transaction immediately, without chasing down declined credit card numbers. Shoppers receive confirmation that their purchase was approved in real-time; merchants get the payment moved to their bank in real-time.
         • Scalability - Merchants want an Internet payment service that can smoothly manage and support the growth of their transaction volume and their needs for additional payment features. A payment service that fails to scale with increased transactions will hold back the merchant's revenue growth.
         • Installation, Upgrades and Additional Payment Features - This is a huge "ease-of-use" factor. Merchants need to be aware of the level of integration and maintenance work that the Internet payment service's technology will require.
         • Multiple payment methods - Currently, credit cards are the primary choice of payment in the United States. Yet globally, other Internet payment methods, including electronic checks and cash, have become common forms of payment. Thus, merchants across the world are likely to begin using multiple payment methods to expand their business model, the types of products and services they can offer, and the number of customers to which they can sell. Merchants should not let their payment options limit their sales options.
         c. Price Performance
         Merchants have several factors to consider in assessing the price performance of an Internet payment service. Most important Service Quality - An Internet payment service can save merchants money and time with a proven technology that provides security, reliability, and built-in, easy-to-use features. Further less technical integration needed between the storefront software application and the Internet payment service, the smaller the effort required to enable the merchant to take Internet payments, and the greater the effort invested in selling. Relationship with Merchant's Financial Institution - It is important that the Internet payment service and the merchant's bank operate effectively together so that they can be responsive to the merchant's business and support needs. For example, Financial Institutions partnering with CyberCash are committed to getting merchant accounts created in just two or three days for CyberCash-enabled merchants.
         
         2. Merchant Credit Card Account. The Merchant's financial institution provides the merchant with a bank account that enables them to accept, process, and deposit payments from their customers, and delivers regular reporting based on these transactions. Each Merchant Needs a Merchant Credit Card Account. Just as in the physical world, a merchant on the Internet needs to establish a merchant account with an acquiring financial institution in order to accept credit cards. Even if a merchant already has a merchant account, they may not have the type of account required for accepting transactions over the Internet. The merchant account setup process can take anywhere from 48 hours to 14 business days to complete. So move quickly on this task, as it is among the most critical to the success of the Web store. The following are guidelines and instructions to help merchants get started quickly:
         About Merchant Accounts
         There are two types of merchant accounts for accepting credit cards:
         1. "Card Present" Account
         This type of account requires the consumer and merchant to be physically at the same location during the time of the transaction. For a card present transaction, the credit card is typically swiped through a card reader (or physical point-of-sale terminal), and the consumer signs an authorization slip, or sales receipt.
         2. Mail Order/Telephone Order (MOTO) or "Card Not Present" Account
         In a MOTO transaction, the merchant and shopper are not in the same physical location, and there is no card swiped or signature received. This method of payment was originally adopted for mail order and catalog businesses. All Internet transactions are treated as MOTO transactions and require a MOTO merchant account.
         If the merchant currently accepts credit cards but is not sure if they have a MOTO account, they should contact their merchant financial institution. If they already have a MOTO account, see the section below on "Setting up on Account to Accept Online Payments."
         Fees and Rates
         As a merchant initiates the process of setting up a relationship with an acquiring financial institution, it is important to check more than one source to compare costs. Fees and rates will vary widely, based on the financial institution and the risks associated with the merchant, including the:
         • Type of products and services being sold
         • Market in which the merchant competes
         • Method in which products and services are being sold and delivered
         • The prices of these products and services
         • The expected volume of transactions
         • What forms of payment the merchant will accept
         • The merchants credit history
         Regardless of these factors, a merchant should expect to pay the financial institution:
         • an application fee, setup fee or both
         • a discount rate (i.e. percent of each transaction), typically not more than 4%
         • per-transaction and/or monthly fees
         • large fees for research, fraud and dispute resolution
         • any additional fees for value added services
         Credit Card Processing Models
         Not only are there many rules and regulations surrounding credit cards payments, there are many procedures and processing methods to a transaction. For example, there are two parts to a credit card transaction: the "authorization" and the "capture". And within these types, there are many processes that occur, including processing, billing, reporting, authorization, and settlement.
         For more detailed information on establishing an Internet merchant account, and becoming familiar with the several components of the credit card accepting process, contact a financial institution for an overview of credit card processing models. Ask for a merchant handbook that explains how to accept credit card payments, how to handle and resolve disputes, and how to process voids, returns and partial credits. Also understand the rights of consumers and the rights of merchants, and become familiar with address verification services (AVS) and other fraud detection mechanisms.
         How to Setup a Merchant Account
         New Account:
         If a merchant does not currently have a MOTO account, the merchant must set up a new account with an acquiring financial institution. There are a number of financial institutions that have designed an account process specifically for Internet merchants by partnering with Internet payment services, such as CyberCash.
         Existing Account:
         If a merchant already has a MOTO account, they should contact their financial institution or one of its agents to let them know they would like to use CyberCash to accept Internet transactions.
         Setting up the Merchant Account to Accept Online Payments
         Regardless of whether a merchant needs a new MOTO account or would like to keep an existing MOTO account, a merchant should do the following to accept credit card payments over the Internet:
         • Ask the financial institution if they are authorized to underwrite credit card services to merchants.
         • Inform the financial institution to set up the merchant account to accept credit cards over the Internet using the merchant's choice of Internet payment services, such as CyberCash.
         • Ask the financial institution to explain the details of establishing a merchant account, including the application and approval process, the fees and charges, and requirements for opening a deposit account for doing business.
         • Plan for the merchant account setup process to take from 48 hours up to 14 business days to complete.
         After the Merchant Account is Approved
         Once the financial institution approves the merchant for online commerce, the financial institution will typically perform the following tasks:
         • Issue the merchant a Merchant ID (MID)
         • Issue the merchant a Terminal ID (TID)
         To process a merchant's transactions, an Internet payment service typically requires specific information on the merchant's account, including their MID and TID. CyberCash, for example, only accepts merchant account information from credit card processors to ensure the protection of this sensitive data from one trusted source.
         The credit card processor in this case would communicate the MID and TID to CyberCash once the merchant's account has been approved. CyberCash will immediately add the merchant bank account information into the Internet Merchant Registration (IMR) system. If the merchant has already registered for service, CyberCash will send an email indicating that the service is ready to go live upon request from the merchant. If the merchant has not yet registered with CyberCash, when the merchant uses the IMR, the pending bank account information is automatically linked during the sign-up process to accelerate the merchant's ability to "go live".
         As the financial institution is processing the merchant's account and working on these tasks, the merchant can continue to integrate their storefront with the payment component(s) and register with their Internet payment service.
         
         
         
         
         
         
         CyberCash
         CyberCash is a pioneer in the electronic commerce industry. It is a leading provider of Internet payment technologies and services. CyberCash enables merchants to accept secure payments on the Internet with more ease, flexibility, reliability and cost-savings than any other solution. Characterstics of Cybercash are
         1. Secure Internet payments made simple
         2. Easy to install, operate and manage: The CashRegister 3 Service eliminates the need for complex software, large databases, and heavy-duty processing at your merchant site. Instead, all payment operations are handled by CyberCash's own 24x7 Payment Gateway Servers. Unlike other Internet payment solutions, CyberCash's software installation, integration and management eliminates the major hurdle to setting up a commerce enabled Web site. Using a small payment component that integrates with the Web storefront, a merchant connects to the CashRegister Service quickly and doesn't require specialized or dedicated personnel to operate.
         3. Automatic upgrades and scalability
         With the bulk of the CashRegister's software residing on CyberCash's servers, merchants can quickly and easily take advantage of new payment technologies, standards and services as they become available - without expensive and time-consuming software changes to their site.
         4. Hard or soft goods
         Since merchants should not be restricted to the types of products and services they want to sell, the CashRegister 3 Service handles sales of "hard goods" made via shopping baskets, or "soft goods" such as pay-for-view areas and digital downloads. CyberCash also processes recurring bill payments. Payments are completely separate from fulfillment, so merchants can deliver their goods or services to their customers any way they choose.
         Single platform for all payment services
         CashRegister 3 Service's unified architecture supports the Internet's widest range of secure payment options:
         • Secure payment card -- Consumers select from their existing VISA™, MasterCard™, American Express™, Novus™/Discover™, Diners Club™, JCB™ or Carte Blanche™ cards to safely purchase goods and services on-line, without picking up the telephone.
         • CyberCoin® -- The CyberCoin service enables small cash payments for instantaneous electronic delivery of information, products and services.
         • PayNow™ Electronic Check -- Consumers can pay their bills directly via the Web, allowing billers to reduce float, cut billing costs, and forge stronger customer relationships at their own Web sites. The PayNow service will soon extend to point-of-sale check payments as well.
         Merchants win by: selecting payment options that best support their business model, providing more convenient payment choices for their customers, and benefiting from more ways to "close the sale" - all on a single platform.
         
         Leading-edge flexibility
         To provide greater payment flexibility to merchants and their customers, the CashRegister 3 Service supports multiple consumer payment interfaces-including the light-weight CyberCash Agile Wallet,[jt3] the Microsoft Wallet, Secure Socket Layer (SSL) forms, store- and bank-branded wallets, and other custom payment applications. Merchants simply select the options and interfaces they want to offer, and easily add new choices at any time to expand their pool of potential customers.
         In addition to online transactions, the CashRegister 3 Service also supports 800#, fax and mail orders, so merchants can consolidate all "card-not-present" credit card transactions from a single interface.
         Industrial-strength encryption for maximum security
         To protect the integrity of transactions, the CashRegister 3 Service supports the Internet's strongest security technologies, including SSL (Secure Sockets Layer). In CyberCash-based transactions, all financial information transmitted over the Internet is encrypted using CyberCash's industrial-strength triple DES encryption.
         CyberCash transactions are protected by the highest levels of encryption available to ensure security and privacy for anyone who wants to conduct business on the Internet. Further CyberCash has also adopted the new Secure Electronic Transaction (SET) protocol and is incorporating it into its latest suite of Internet payment solutions. The transition to SET will facilitate following tasks:
         1. Authenticate cardholders, merchants and banks;
         2. Assure confidentiality of payment information;
         3. Ensure that messages have not been corrupted during transit;
         4. Provide for interoperability among different software and hardware platforms.
         
         Multi-platform support for maximum flexibility: CyberCash's service is compatible with Microsoft Windows NT™ and leading versions of the Unix™ operating system, including Solaris (Sun Sparc & Intel), Linux etc..
         Multiple Banking Relationships:Cybercash holds connectivity with many financial institutions and third party processors, so merchants can either maintain their existing banking relationships or enjoy a broad list of options if they need to create a merchant account.
         Transaction logging and reporting
         To support non-repudiation, balancing, reporting and other back-office functions, the CashRegister 3 Service automatically logs every transaction - including sales, credits and voids - in a powerful database. A Web-based reporting feature provides password-protected visibility into this transaction-level information, allowing you to zero in on problems and drill down into any individual transaction for complete details.
         Notifications
         Today's Web storefronts need to interoperate with numerous entities-consumers, inventory systems, customer service, accounting, even outside partners. While the Web is a command and response environment, the CashRegister 3 Service can follow up the standard response with additional communications to other systems, both internal and external to your business.
         Proof-of-Purchase
         CashRegister 3 can also issue a digital receipt in the form of a Proof-of-Purchase, or POP, to verify that a consumer has paid. This way, a consumer can come to the merchant's site at any time to redeem a purchase, while bill payers have the Internet equivalent of a cancelled check to verify that payment has been accepted.
         
         
         
         
         
         Source: How stuff works.com
         www.cybercash.com
         http://www.vivtek.com/cybercash/info.html
         

Electronic Payment Model

Electronic Payment Schemes



A Layered Protocol Model.


A three layer model is used to compare payments schemes.

1. Policy : The semantics of the payment scheme. This includes refunds policies, and the liabilities incurred by customers, merchants and financial institutions.


2. Data flow: The requirements for storage of data by and communications between the parties. This includes not only the data flows for payments themselves but also for refunds, account enquiries and settlement.
   
3. 
   



4. Mechanism <\b>: The methods by which the necessary security requirements for messages and stored data are achieved.

All three abstraction levels are tightly coupled since policy makes requirements of data flow and data flow makes requirements of mechanism. Payment Protocol Models.

Cash
Cash consists of a token which may be authenticated independently of the issuer. This is commonly achieved through use of self authenticating tokens or tamper proof hardware.<\li>

Cheque
Cheques are payment instruments whose validity requires reference to the issuer.
Card <\li>

Card payment schemes provide a payments mechanism through the existing credit card payment infrastructure. Such schemes have many structural similarities to cheque models except that solutions are constrained by that structure. A key feature of card payment systems is that every transaction carries insurance. <\li>
<\ol>
Methods and Types of Electronic Payment<\b>

An electronic payment is any kind of non-cash payment that do not involve any paper check. Methods of electronic payments include credit cards, debit cards and the ACH (Automated Clearing House) network. The ACH system comprises direct deposit, direct debit and electronic checks (e-checks).
Three main types of transactions:<\b>

1. A one-time customer-to-vendor payment is for shopping online e.g. at Amazon. Consumer clicks on the shopping cart icon, type in the credit card information and click on the checkout button. The site processes that credit card information and many times sends e-mail notifiying that the payment has been received. To pay by e-check, consumer types in his account number and bank's routing number. The vendor authorizes payment through the customer's bank, which then either initiates an electronic funds transfer (EFT) or prints a check and mails it to the vendor. <\li>
   
2. You make a recurring customer-to-vendor payment when you pay a bill through a regularly scheduled direct debit from your checking account or an automatic charge to your credit card. This type of payment plan is commonly offered by car insurance companies, phone companies and loan management companies. Some long-term contracts (like those at gyms or fitness centers) require this type of automated payment schedule.<\li>
   
3. To use automatic bank-to-vendor payment, your bank must offer a service called online bill pay. You log on to your bank's Web site, enter the vendor's information and authorize your bank to electronically transfer money from your account to pay your bill. In most cases, you can choose whether to do this manually for each billing cycle or have your bills automatically paid on the same day each month.<\li>
   Benefits of Electronic Payment<\b>
   
   1. Convenient for the consumer Account information -- such as credit card number and shipping address once entered is stored in a database on the retailer's Web server. When the customer comes back to the Web site he just needs to log in with username and password. Completing a transaction is just as simple as clicking mouse. Once just needs to confirm purchase.<\li>
      
   2. Electronic payment lowers costs for businesses. The more payments they can process electronically, the less they spend on paper and postage. Offering electronic payment can also help businesses improve customer retention. A customer is more likely to return to the same e-commerce site where his or her information has already been entered and stored. <\li>
      <\ol>
      Problems with Electronic Payment<\b>
      
      1. The main drawbacks to electronic payments are concerns over privacy and the possibility of identity theft. Fortunately, there are many safeguards available to protect your sensitive personal information from falling into the wrong hands. <\li>
         
      2. Time Consumed in checking privacy/authenticity: Some people simply dislike making electronic payments. They find the setup too time-consuming and do not want more logons and passwords to remember. Further many people like familiar ways of writing checks and dropping envelopes in the mail. Regardless of these concerns, electronic payment will likely continue to rise in popularity. <\li>
         <\ol>
         Setting Up E-Payment for Online Business<\b>
         Its very difficult for a business man to decide what kind of set up he wants. In case a customer has a small business and wants to set up online payments via Web site.
         
         1. Decide whether one needs to outsource payment solution or handle it in-house. For those who want all-in-one solution, services like PayPal. Such services make it easy for one to accept credit cards and other forms of electronic payment from the website. When a customer enters his or her information on the site, payment service authorizes the transaction and transfers funds to the account. These services charge a processing fee per transaction. In case one needs to process payments in-house, the first thing he need to do is set up a secure server. This is a computer that uses encryption to make it difficult for intruders to intercept confidential information.<\li>
            
         2. Secure Socket Layer (SSL) technology is used to encrypt the data. Business man needs to apply for an SSL certificate online. Once the business man has an SSL certificate he needs to register his site with a digital authentication service. A digital certificate validates that the site receiving his customers' information is the correct one. It assures customers that site is legitimate and can be trusted.<\li>
            
         3. Purchase shopping software: Once a secure server is build one needs to buy shopping software that allows a customer to choose products from the website and add them to a virtual shopping cart. When customers are ready to complete their orders, they click on a "checkout" link that takes them to secure server, where they enter their credit card information. <\li>
            
         4. One needs a system to process credit card payments and an Internet merchant account with a bank. Credit card payment processing services are available through online companies like VeriSign. Such companies provide software that validates customer's credit card information over secure server. Some businesses also choose to accept electronic checks from customers.<\li>
            <\ol>
            Step by Step Online transactions <\b>
            
            1. Shopping on the Internet : The consumer selects an item to purchase on the Internet.<\li>
               
            2. Initiating the Transaction After entering shipping and credit card information, the consumer is presented with a summary of the item, price, and billing information. The payment information is secured with industrial strength encryption and forwarded with the order form to the merchant's CyberCash CashRegister™.<\li>
               
            3. CashRegister Picks up Merchant Information <\li>
               • The merchant's identification information is automatically added to the encrypted payment request.
               4. Through the CyberCash Firewall to the Bank
               • Still encrypted, the payment request is forwarded over the Internet and is received through a secure firewall by the CyberCash CashRegister server.
               • CyberCash instantaneously passes the payment request to the merchant's financial institution, which zips it on to the consumer's credit card bank to approve or decline payment authorization.
               
            4. Bank Sends Approval
               • The consumer's credit card bank sends its response back through the merchant's financial institution to the merchant's CashRegister.
               • The shopper also receives confirmation of credit card approval.
               • The entire authorization process takes under 20 seconds.<\li>
               
            5. Transaction is Completed and Captured
               • The merchant delivers the item to the shopper.
               • The merchant requests financial settlement, or "capture", of the transaction through the CashRegister server.
               Funds are transferred to the merchant's account by its financial institution
               <\li>
               <\ol>
               
               Electronic Payment Association<\b>
               The National Automated Clearing House Association (NACHA) is the Electronic Payments Association, has helped increase the use of e-payments and e-checks. This not-for-profit association develops operating rules and business practices for the ACH network to make sure it stays efficient, reliable and secure for keeping electronic payments that way, too. NACHA governs the nationwide Automated Clearing House (ACH) network. Through this network NACHA's 11,000 member banks and other financial institutions offer direct deposit, direct debit and e-checks for consumers and businesses. It facilitates check bank account balances online, make purchases from online stores with a debit card or pay bills from bank's Web site The association develops electronic payment practices beyond the ACH network for areas like Internet commerce, financial electronic data interchange (EDI) and international payments. As one of its services, NACHA tracks the growing use of electronic payment through quarterly and annual reports. For example, the ACH network handled nearly 16 billion payments totaling $30.3 trillion in 2006, a 14.5 percent increase over 2005, according to NACHA statistics. That includes payroll direct deposits, Social Security benefits, tax refunds, payment of 8 billion consumer bills and more. The rate shows that the volume of electronic payments continues to double every five years. While most of NACHA's offerings are targeted to its member financial institutions, the association offers help for consumers and small businesses through an interactive Web site. on paper to save trees, fuel and water. The alliance brings together NACHA, the U.S. Federal Reserve, and leaders of the financial and consumer billing industries.
               
               
               Electronic payments:
               Merchant's website must be able to accept and process secure online payments. Two important things required are:
               
               1. Internet Payment Service : The Internet Payment Service, such as CyberCash, enables the merchant to accept online payments from their customers and securely processes these payments from a Merchant's Web storefront through the existing system of financial institutions and credit card processors. The three key qualities merchants expect in an Internet payment service are security, ease-of-use, and price performance. With the right payment service, merchants can have all three. Here are some features to consider:
                  a. Security
                  Merchants want the guarantee that they will get paid for their goods and services and that their customers will feel confident and comfortable shopping at their website. Thus merchants need an Internet payment service that will provide them with the security to deal with credit card authentication, transaction confidentiality, server host integrity, and server virus protection. At a minimum, an Internet payment service should provide SSL (Secure Socket Layer) protocol security, which encrypts the customer's payment information while it moves over the Internet so that it cannot be deciphered. But SSL alone may not be strong enough for this entire transaction process. CyberCash, for example, offers powerful triple DES encryption, as well as SET (Secure Electronic Transaction) capable encryption and authentication. Though electronic commerce is continuing to grow at a rapid rate, shoppers are still skeptical about security, and have not been quick to trust that personal information, such as a credit card number or address, is safe to send over the Internet. However, an Internet payment service like CyberCash, with a reputation for using the strongest Internet security technology, improves consumer perceptions about security.
                  b. Ease-of-Use
                  For Internet payments, ease-of-use means more than just simplicity. Merchants need a payment service that meets the short-term and long-term needs of their business with 24x7 reliability so they can focus on what they do best - selling. The primary Internet payment features that make managing a business easier, include:
                  • Real-time payments – Real time "authorization" (bank approval of the sale) and "capture" (depositing and settling a payment) enable the merchant to complete the transaction immediately, without chasing down declined credit card numbers. Shoppers receive confirmation that their purchase was approved in real-time; merchants get the payment moved to their bank in real-time.
                  • Scalability - Merchants want an Internet payment service that can smoothly manage and support the growth of their transaction volume and their needs for additional payment features. A payment service that fails to scale with increased transactions will hold back the merchant's revenue growth.
                  • Installation, Upgrades and Additional Payment Features - This is a huge "ease-of-use" factor. Merchants need to be aware of the level of integration and maintenance work that the Internet payment service's technology will require.
                  • Multiple payment methods - Currently, credit cards are the primary choice of payment in the United States. Yet globally, other Internet payment methods, including electronic checks and cash, have become common forms of payment. Thus, merchants across the world are likely to begin using multiple payment methods to expand their business model, the types of products and services they can offer, and the number of customers to which they can sell. Merchants should not let their payment options limit their sales options.
                  c. Price Performance
                  Merchants have several factors to consider in assessing the price performance of an Internet payment service. Most important Service Quality - An Internet payment service can save merchants money and time with a proven technology that provides security, reliability, and built-in, easy-to-use features. Further less technical integration needed between the storefront software application and the Internet payment service, the smaller the effort required to enable the merchant to take Internet payments, and the greater the effort invested in selling. Relationship with Merchant's Financial Institution - It is important that the Internet payment service and the merchant's bank operate effectively together so that they can be responsive to the merchant's business and support needs. For example, Financial Institutions partnering with CyberCash are committed to getting merchant accounts created in just two or three days for CyberCash-enabled merchants.<\li>
                  
               2. Merchant Credit Card Account The Merchant's financial institution provides the merchant with a bank account that enables them to accept, process, and deposit payments from their customers, and delivers regular reporting based on these transactions. Each Merchant Needs a Merchant Credit Card Account. Just as in the physical world, a merchant on the Internet needs to establish a merchant account with an acquiring financial institution in order to accept credit cards. Even if a merchant already has a merchant account, they may not have the type of account required for accepting transactions over the Internet. The merchant account setup process can take anywhere from 48 hours to 14 business days to complete. So move quickly on this task, as it is among the most critical to the success of the Web store. The following are guidelines and instructions to help merchants get started quickly:
                  
                  About Merchant Accounts
                  
                  There are two types of merchant accounts for accepting credit cards:
                  1. "Card Present" Account
                  This type of account requires the consumer and merchant to be physically at the same location during the time of the transaction. For a card present transaction, the credit card is typically swiped through a card reader (or physical point-of-sale terminal), and the consumer signs an authorization slip, or sales receipt.
                  2. Mail Order/Telephone Order (MOTO) or "Card Not Present" Account
                  In a MOTO transaction, the merchant and shopper are not in the same physical location, and there is no card swiped or signature received. This method of payment was originally adopted for mail order and catalog businesses. All Internet transactions are treated as MOTO transactions and require a MOTO merchant account.
                  If the merchant currently accepts credit cards but is not sure if they have a MOTO account, they should contact their merchant financial institution. If they already have a MOTO account, see the section below on "Setting up on Account to Accept Online Payments."
                  Fees and Rates
                  As a merchant initiates the process of setting up a relationship with an acquiring financial institution, it is important to check more than one source to compare costs. Fees and rates will vary widely, based on the financial institution and the risks associated with the merchant, including the:
                  • Type of products and services being sold
                  • Market in which the merchant competes
                  • Method in which products and services are being sold and delivered
                  • The prices of these products and services
                  • The expected volume of transactions
                  • What forms of payment the merchant will accept
                  • The merchants credit history
                  Regardless of these factors, a merchant should expect to pay the financial institution:
                  • an application fee, setup fee or both
                  • a discount rate (i.e. percent of each transaction), typically not more than 4%
                  • per-transaction and/or monthly fees
                  • large fees for research, fraud and dispute resolution
                  • any additional fees for value added services
                  Credit Card Processing Models
                  Not only are there many rules and regulations surrounding credit cards payments, there are many procedures and processing methods to a transaction. For example, there are two parts to a credit card transaction: the "authorization" and the "capture". And within these types, there are many processes that occur, including processing, billing, reporting, authorization, and settlement.
                  For more detailed information on establishing an Internet merchant account, and becoming familiar with the several components of the credit card accepting process, contact a financial institution for an overview of credit card processing models. Ask for a merchant handbook that explains how to accept credit card payments, how to handle and resolve disputes, and how to process voids, returns and partial credits. Also understand the rights of consumers and the rights of merchants, and become familiar with address verification services (AVS) and other fraud detection mechanisms.
                  How to Setup a Merchant Account
                  New Account:
                  If a merchant does not currently have a MOTO account, the merchant must set up a new account with an acquiring financial institution. There are a number of financial institutions that have designed an account process specifically for Internet merchants by partnering with Internet payment services, such as CyberCash.
                  Existing Account:
                  If a merchant already has a MOTO account, they should contact their financial institution or one of its agents to let them know they would like to use CyberCash to accept Internet transactions.
                  Setting up the Merchant Account to Accept Online Payments
                  Regardless of whether a merchant needs a new MOTO account or would like to keep an existing MOTO account, a merchant should do the following to accept credit card payments over the Internet:
                  • Ask the financial institution if they are authorized to underwrite credit card services to merchants.
                  • Inform the financial institution to set up the merchant account to accept credit cards over the Internet using the merchant's choice of Internet payment services, such as CyberCash.
                  • Ask the financial institution to explain the details of establishing a merchant account, including the application and approval process, the fees and charges, and requirements for opening a deposit account for doing business.
                  • Plan for the merchant account setup process to take from 48 hours up to 14 business days to complete.
                  After the Merchant Account is Approved
                  Once the financial institution approves the merchant for online commerce, the financial institution will typically perform the following tasks:
                  • Issue the merchant a Merchant ID (MID)
                  • Issue the merchant a Terminal ID (TID)
                  To process a merchant's transactions, an Internet payment service typically requires specific information on the merchant's account, including their MID and TID. CyberCash, for example, only accepts merchant account information from credit card processors to ensure the protection of this sensitive data from one trusted source.
                  The credit card processor in this case would communicate the MID and TID to CyberCash once the merchant's account has been approved. CyberCash will immediately add the merchant bank account information into the Internet Merchant Registration (IMR) system. If the merchant has already registered for service, CyberCash will send an email indicating that the service is ready to go live upon request from the merchant. If the merchant has not yet registered with CyberCash, when the merchant uses the IMR, the pending bank account information is automatically linked during the sign-up process to accelerate the merchant's ability to "go live".
                  As the financial institution is processing the merchant's account and working on these tasks, the merchant can continue to integrate their storefront with the payment component(s) and register with their Internet payment service.
                  
                  
                  
                  
                  
                  
                  CyberCash
                  CyberCash is a pioneer in the electronic commerce industry. It is a leading provider of Internet payment technologies and services. CyberCash enables merchants to accept secure payments on the Internet with more ease, flexibility, reliability and cost-savings than any other solution. Characterstics of Cybercash are
                  1. Secure Internet payments made simple
                  2. Easy to install, operate and manage: The CashRegister 3 Service eliminates the need for complex software, large databases, and heavy-duty processing at your merchant site. Instead, all payment operations are handled by CyberCash's own 24x7 Payment Gateway Servers. Unlike other Internet payment solutions, CyberCash's software installation, integration and management eliminates the major hurdle to setting up a commerce enabled Web site. Using a small payment component that integrates with the Web storefront, a merchant connects to the CashRegister Service quickly and doesn't require specialized or dedicated personnel to operate.
                  3. Automatic upgrades and scalability
                  With the bulk of the CashRegister's software residing on CyberCash's servers, merchants can quickly and easily take advantage of new payment technologies, standards and services as they become available - without expensive and time-consuming software changes to their site.
                  4. Hard or soft goods
                  Since merchants should not be restricted to the types of products and services they want to sell, the CashRegister 3 Service handles sales of "hard goods" made via shopping baskets, or "soft goods" such as pay-for-view areas and digital downloads. CyberCash also processes recurring bill payments. Payments are completely separate from fulfillment, so merchants can deliver their goods or services to their customers any way they choose.
                  Single platform for all payment services
                  CashRegister 3 Service's unified architecture supports the Internet's widest range of secure payment options:
                  • Secure payment card -- Consumers select from their existing VISA™, MasterCard™, American Express™, Novus™/Discover™, Diners Club™, JCB™ or Carte Blanche™ cards to safely purchase goods and services on-line, without picking up the telephone.
                  • CyberCoin® -- The CyberCoin service enables small cash payments for instantaneous electronic delivery of information, products and services.
                  • PayNow™ Electronic Check -- Consumers can pay their bills directly via the Web, allowing billers to reduce float, cut billing costs, and forge stronger customer relationships at their own Web sites. The PayNow service will soon extend to point-of-sale check payments as well.
                  Merchants win by: selecting payment options that best support their business model, providing more convenient payment choices for their customers, and benefiting from more ways to "close the sale" - all on a single platform.
                  
                  Leading-edge flexibility
                  To provide greater payment flexibility to merchants and their customers, the CashRegister 3 Service supports multiple consumer payment interfaces-including the light-weight CyberCash Agile Wallet,[jt3] the Microsoft Wallet, Secure Socket Layer (SSL) forms, store- and bank-branded wallets, and other custom payment applications. Merchants simply select the options and interfaces they want to offer, and easily add new choices at any time to expand their pool of potential customers.
                  In addition to online transactions, the CashRegister 3 Service also supports 800#, fax and mail orders, so merchants can consolidate all "card-not-present" credit card transactions from a single interface.
                  Industrial-strength encryption for maximum security
                  To protect the integrity of transactions, the CashRegister 3 Service supports the Internet's strongest security technologies, including SSL (Secure Sockets Layer). In CyberCash-based transactions, all financial information transmitted over the Internet is encrypted using CyberCash's industrial-strength triple DES encryption.
                  CyberCash transactions are protected by the highest levels of encryption available to ensure security and privacy for anyone who wants to conduct business on the Internet. Further CyberCash has also adopted the new Secure Electronic Transaction (SET) protocol and is incorporating it into its latest suite of Internet payment solutions. The transition to SET will facilitate following tasks:
                  1. Authenticate cardholders, merchants and banks;
                  2. Assure confidentiality of payment information;
                  3. Ensure that messages have not been corrupted during transit;
                  4. Provide for interoperability among different software and hardware platforms.
                  
                  Multi-platform support for maximum flexibility: CyberCash's service is compatible with Microsoft Windows NT™ and leading versions of the Unix™ operating system, including Solaris (Sun Sparc & Intel), Linux etc..
                  Multiple Banking Relationships:Cybercash holds connectivity with many financial institutions and third party processors, so merchants can either maintain their existing banking relationships or enjoy a broad list of options if they need to create a merchant account.
                  Transaction logging and reporting
                  To support non-repudiation, balancing, reporting and other back-office functions, the CashRegister 3 Service automatically logs every transaction - including sales, credits and voids - in a powerful database. A Web-based reporting feature provides password-protected visibility into this transaction-level information, allowing you to zero in on problems and drill down into any individual transaction for complete details.
                  Notifications
                  Today's Web storefronts need to interoperate with numerous entities-consumers, inventory systems, customer service, accounting, even outside partners. While the Web is a command and response environment, the CashRegister 3 Service can follow up the standard response with additional communications to other systems, both internal and external to your business.
                  Proof-of-Purchase
                  CashRegister 3 can also issue a digital receipt in the form of a Proof-of-Purchase, or POP, to verify that a consumer has paid. This way, a consumer can come to the merchant's site at any time to redeem a purchase, while bill payers have the Internet equivalent of a cancelled check to verify that payment has been accepted.
                  
                  
                  
                  
                  
                  Source: How stuff works.com
                  www.cybercash.com
                  http://www.vivtek.com/cybercash/info.html
                  
                  

EMAIL-SMTP

The First E-mail on the Internet

In 1971, the first e-mail was typed into the Teletype terminal connected to the Digital Equipment PDP-10 in the rear of the picture below. The message was transmitted via ARPAnet, the progenitor of the Internet, to the PDP-10 in front. Dan Murphy, a Digital engineer, took this photo in the Bolt, Beranek and Newman datacenter. See ARPAnet.

Could They Have Imagined Spam?
When they sent this first message in 1971, could they ever have imagined the billions of e-mails that would follow in the years to come?











Step A: Sender creates and sends an email
The originating sender creates an email in their Mail User Agent (MUA) and clicks 'Send'. The MUA is the application the originating sender uses to compose and read email, such as Eudora, Outlook, etc.
Step B: Sender's MDA/MTA routes the email
The sender's MUA transfers the email to a Mail Delivery Agent (MDA). Frequently, the sender's MTA also handles the responsibilities of an MDA. Several of the most common MTAs do this, including send mail.
The MDA/MTA accepts the email, then routes it to local mailboxes or forwards it if it isn't locally addressed.
In our diagram, an MDA forwards the email to an MTA and it enters the first of a series of "network clouds," labeled as a "Company Network" cloud.
Step C: Network Cloud
An email can encounter a network cloud within a large company or ISP, or the largest network cloud in existence: the Internet. The network cloud may encompass a multitude of mail servers, DNS servers, routers, lions, tigers, bears (wolves!) and other devices and services too numerous to mention. These are prone to be slow when processing an unusually heavy load, temporarily unable to receive an email when taken down for maintenance, and sometimes may not have identified themselves properly to the Internet through the Domain Name System (DNS) so that other MTAs in the network cloud are unable to deliver mail as addressed. These devices may be protected by firewalls, spam filters and malware detection software that may bounce or even delete an email. When an email is deleted by this kind of software, it tends to fail silently, so the sender is given no information about where or when the delivery failure occurred.
Email service providers and other companies that process a large volume of email often have their own, private network clouds. These organizations commonly have multiple mail servers, and route all email through a central gateway server (i.e., mail hub) that redistributes mail to whichever MTA is available. Email on these secondary MTAs must usually wait for the primary MTA (i.e., the designated host for that domain) to become available, at which time the secondary mail server will transfer its messages to the primary MTA.
Step D: Email Queue
The email in the diagram is addressed to someone at another company, so it enters an email queue with other outgoing email messages. If there is a high volume of mail in the queue—either because there are many messages or the messages are unusually large, or both—the message will be delayed in the queue until the MTA processes the messages ahead of it.
Step E: MTA to MTA Transfer
When transferring an email, the sending MTA handles all aspects of mail delivery until the message has been either accepted or rejected by the receiving MTA.
As the email clears the queue, it enters the Internet network cloud, where it is routed along a host-to-host chain of servers. Each MTA in the Internet network cloud needs to "stop and ask directions" from the Domain Name System (DNS) in order to identify the next MTA in the delivery chain. The exact route depends partly on server availability and mostly on which MTA can be found to accept email for the domain specified in the address. Most email takes a path that is dependent on server availability, so a pair of messages originating from the same host and addressed to the same receiving host could take different paths. These days, it's mostly spammers that specify any part of the path, deliberately routing their message through a series of relay servers in an attempt to obscure the true origin of the message.
To find the recipient's IP address and mailbox, the MTA must drill down through the Domain Name System (DNS), which consists of a set of servers distributed across the Internet. Beginning with the root name servers at the top-level domain (.tld), then domain name servers that handle requests for domains within that .tld, and eventually to name servers that know about the local domain.
DNS resolution and transfer process
• There are 13 root servers serving the top-level domains (e.g., .org, .com, .edu, .gov, .net, etc.). These root servers refer requests for a given domain to the root name servers that handle requests for that tld. In practice, this step is seldom necessary.
• The MTA can bypass this step because it has already knows which domain name servers handle requests for these .tlds. It asks the appropriate DNS server which Mail Exchange (MX) servers have knowledge of the sub domain or local host in the email address. The DNS server responds with an MX record: a prioritized list of MX servers for this domain.
An MX server is really an MTA wearing a different hat, just like a person who holds two jobs with different job titles (or three, if the MTA also handles the responsibilities of an MDA). To the DNS server, the server that accepts messages is an MX server. When is transferring messages, it is called an MTA.
• The MTA contacts the MX servers on the MX record in order of priority until it finds the designated host for that address domain.
• The sending MTA asks if the host accepts messages for the recipient's username at that domain (i.e., username@domain.tld) and transfers the message.
Step F: Firewalls, Spam and Virus Filters
The transfer process described in the last step is somewhat simplified. An email may be transferred to more than one MTA within a network cloud and is likely to be passed to at least one firewall before it reaches its destination.
An email encountering a firewall may be tested by spam and virus filters before it is allowed to pass inside the firewall. These filters test to see if the message qualifies as spam or malware. If the message contains malware, the file is usually quarantined and the sender is notified. If the message is identified as spam, it will probably be deleted without notifying the sender.
Spam is difficult to detect because it can assume so many different forms, so spam filters test on a broad set of criteria and tend to misclassify a significant number of messages as spam, particularly messages from mailing lists. When an email from a list or other automated source seems to have vanished somewhere in the network cloud, the culprit is usually a spam filter at the receiver's ISP or company. This explained in greater detail in Virus Scanning and Spam Blocking.
Delivery
In the diagram, the email makes it past the hazards of the spam trap...er...filter, and is accepted for delivery by the receiver's MTA. The MTA calls a local MDA to deliver the mail to the correct mailbox, where it will sit until it is retrieved by the recipient's MUA.
RFCs
Documents that define email standards are called "Request For Comments (RFCs)", and are available on the Internet through the Internet Engineering Task Force (IETF) website. There are many RFCs and they form a somewhat complex, interlocking set of standards, but they are a font of information for anyone interested in gaining a deeper understanding of email.
Here are a couple of the most pertinent RFCs:
• RFC 822: Standard for the Format of ARPA Internet Text Messages
• RFC 2821: Simple Mail Transfer Protocol

It's Like Regular Mail

Email construction and delivery is similar to regular mail by design, because email is modeled on regular mail.
A Message Enclosed in an Envelope
An email message is constructed like a letter you'd send through the postal service: a message enclosed in an envelope. The email envelope header is analogous to the envelope of a hardcopy letter, but some of the information that is ordinarily present on a hardcopy envelope is contained in the message header instead of the envelope header. This header header also contains information that is not usually found on a real-world envelope, but is essential to email delivery and troubleshooting. The envelope header is usually hidden when you view an email, and the message header is usually visible. Together, these two headers are called the full header.
Message Header Fields
Anyone who has used email is familiar with the message header, which is displayed when you view an email message and includes the 'From:', 'To:', 'Cc:', 'Date:' and 'Subject:' fields. The content of these fields differs only slightly from regular mail, because the 'From:', 'To:' and 'Cc:', fields in an email identify the sender and intended recipients by email address.
The Date Field
The message header's 'Date:' field is applied by the originating sender's MUA, so it is only as accurate as the clock on the sender's computer.
The Subject: Field
The 'Subject:' field isn't used in regular mail except in formal business letters where its closest analogy is the 'Re:' line, but this field is necessary for email because without it, you could only differentiate one email from another in the inbox based on the 'From:', 'To:' and 'Date:' fields.
The Return-Path
Email contains more detailed information about its delivery process than the single postmark of regular mail. As the email passes through the delivery chain, MTAs add more interesting and reliable postmark-like timestamps and MTA location information, including the envelope header's 'Received' fields (described in the next section) and the 'Return-Path', which contains the identity of the sender, such as .
The 'Return-Path' is often referred to as the "envelope sender", and this is the address that mailing lists use to determine "who" sent a message. The 'Return-Path' is also the address to which bounces are sent.
The Received field
A 'Received' field added by each MTA in the email delivery chain as it accepts a message for transfer. When a receiving MTA accepts the email for relay or local delivery, it records information about the transaction in the email's envelope header. This includes a message ID that it uses, and which will appear in the MTA server logs, timestamps indicating the time of the transfer and the identity of the sending MTA. If you follow the 'Received' entries in order, they will lead you back to the originating MTA (but not to the senders email address).
This information about the true identity of the sending MTA is valuable when troubleshooting issues with spam or malicious messages. These kinds of messages often contain forged identities in the 'From:' and 'Reply-To' fields, but the true identity of the sending MTA can be extracted from the envelope header. When contacted by the sending MTA, the receiving MTA checks to see whether the hostname provided to it by the originating MTA resolves to a unique IP address. If it does, then it is a fully qualified domain name and the receiving MTA adds the information to the 'Received' field. If the hostname does not resolve properly, the receiving MTA adds the originating MTA's IP address (and possibly also the true hostname) instead.
The Reply-To field
The envelope header also contains a 'Reply-To' address provided by the sender that the receiver can use to reply to the sender. This is analogous to the return address on regular mail. Email messages, particularly automated notifications and messages from mailing lists, often set a different 'Reply-To' address so that bounced messages will be sent to an automated bounce handler. Like a return address on regular mail, the 'Reply-To' address doesn't have to be a real address, but if it isn't, mail sent to it will be undeliverable. Spam and messages containing malware are likely to have false information in the 'From:' and 'Reply-to' fields, but the originator's true Internet address is recorded in the first 'Received' entry in the email's envelope header.

DSS Concepts [MIS NOTES}

Answers to the questions are as per the students input will be refined in further discussions

1. What common characteristics of a decision support system relate to the decision making process?
   
   The role of DSS is to provide support to decision maker on the “structurable” portions of the decision. With this support, the decision maker is free to focus his or her cognitive resources on the truly unstructured portions of the problem – those portions that, gives the limit of technology to execute a complex problem – solving strategies contained in human memory, are better left for resolution by human decision makers. The decision process employed in addressing the unstructured portion of decision situation can be thought of as the human processes, we don’t yet understand well enough to effectively simulate via automation. Some common DSS characteristics are as follows:-
   
   1. Employed in semi structured or unstructured decision contexts.
   
   
   2. Intended to support decision makers rather than replace them.
   
   
   3. Supports all phases of the decision making process.
   
   
   4. Focuses on the effectiveness of decision making process rather than its efficiency.
   
   
   5. Is under control of DSS.
   
   
   6. Uses underlying data and models.
   
   
   7. Facilitates learning on the part of decision maker.
   
   
   8. Is interactive or user – friendly.
   
   
   9. Is generally developed using an evolutionary, iterative process.
   
   
   10. Provide support for all levels of mgmt. from top execute to managers.
   
   
   11. Can provide support for multiple independent and interdependent decisions.
   12. Provide support for individual groups, team based decision making contexts.
   
   
   
   
   
   
2. Discuss the use of following type DSS ?
   
   Ans.:-
   
   
   1. Executive DSS
   
   Executive type of DSS or EIS that aims to meet ad hoc information needs of top executives. This shows uses and benefits in large organization for documentation section. As definition, the DSS that assists top executives in ad-hoc analyses of current performance and projected operations is said as EIS; or the computerized system that gives executives easy access to internal and external information relevant to their critical success factors, is said as Executive Decision Support System. Advantages
   1. Its able to access and combine information from a broad range of sources both within and outside of the organization
   
   
   2. Its able to present information in textual, tabular, and in graphical way.
   
   
   3. It is able to do status reporting, exception reporting, trend analysis, and drill-down investigation.
   
   
   2. Group DSS
      
      This study 1st proposes a rational – political group decision – making model which identifies three uncertain factors involved in a group decision making process: decision makers’ role in a group reaching a satisfactory solution, preferences for alternatives and judgments for assessment – criteria. Based on the model, a linguistic term oriented multi – criteria group decision making method uses general fuzzy number to deal with the three uncertain factors into a group satisfactory decision that is in a most acceptable degree of the group. Moreover, this study implements the method by developing a web – based group decision support system. This system allows decision makers to participate a group decision – making process as a whole, from criteria generation, alternative evaluation, opinion interaction to decision aggregation. Finally, an application of the system is presented to illustrate the web – based group decision support system.
      
      Uses
      
      1. Adapting human factors for these technologies.
      
      
      2. Facilitating interdisciplinary collaboration.
      
      
      3. Promoting effective organizational learning.
      
      
      
      
      
   3. Corporate DSS
   
   
   
   Predicting the future is an integral part of effective corporate decision making. Most business challenges require information which is dispersed among the opinions and intuitions of many people. It shows that especially conditional prediction markets can be used as decision support systems. Of course, the value and usefulness of prediction markets depends mostly on their comparison with the existing tools that companies employ to combine information. But no empirical study has yet compared prediction markets directly to one of the most widespread corporate mechanisms to collect and aggregate information: group deliberation.
   Uses:-
   • ABC
   • DEC
   Data Centric DSS:-
   Data Centric system is also called as Data Management System. Here data is organized into a hierarchical manner. It deals with both methodological and practical aspects of design , implementation and application of data-centric decision support systems powered by the historical process and business data. The paper is written from the product development and corporate prospective and discussions and traps on developers way from the original idea to its commercial use. It has four sub components-Database, files, records, Data elements. It also provide solutions and support for data protection, storage and recovery.
   
   Model Centric DSS
   Model is a simplification of some event constructed to help study the event. The model base is the modeling counterpart to the database; it stores and organizes the various models the DSS uses in its analyses. The MBMS (or model base management system) is the counterpart to the DBMS. The Model base is what differentiates a DSS from other information systems. General functions of the MBMS are:- Modeling language- that allows for creation of models, provides a mechanism for linking multiple models. Model libraries- stores and manages all models, provides a catalog and description. Model manipulation- allows for management and manipulation of the model base with functions (run, store, query, etc.) similar to those in a DBMS.
   


3. Illustrate the importance of DBMS in a DSS application ?
   
   A database is an integrated collection of data, organized and stored in a manner that facilitates its easy retrieval. Importance of DBMS can be illustrated as follows:
   It organizes data into logical hierarchy based on the degree of aggregation or granularity of that data. The multitude of data can be organized into files and database must be managed, this important role falls to DBMS (i.e. Database Management System).
   
   The DBMS has two main responsibilities, concern to DSS:
   
   1. The coordination of all tasks related to storing and accessing information in the database and disseminating information to community of DSS.
   
   2. The maintenance of logical independence between the data contained in the DSS database and the DSS application.
   
   Data warehouses provide large amounts of data to the DSS in a form and manner that is more conductive to DSS use.
   
   


4. Discuss real time applications where it is feasible to use Procedural/Non-procedural DSS?

Procedural DSS, refers to the degree to which a user of a DSS can specify whatever information, he or she wants from DSS in what ever from he or she wants it. The non-procedural command structure, though easier to understand and construct nonetheless requires the user to follow a set of rules regarding sequence and syntax that is somewhat foreign to the way one naturally thinks and converses. In emerging trend, towards natural language command languages, system written in modern development environments such as Lotus Notes provide the user with a command syntax that closely resembles natural English language sentences. An extension of the concept of non-procedurality, the natural language command processor accepts command and instructions in the form of commonly structured English sentences that are sequenced and constructed at the convenience of the command language. In a command oriented language, regardless of procedurality, a missing comma or command parameter out of order can render the massage undecipherable by the command processor. The natural language DSS is more tolerant of these issue and can actually be designed to “learn” the user’s intensions over time. That is the command processor interpret the meaning of new commands or requests made by the user. Natural language systems can be easily adapted to alternative forms of input, such a voice recognition or even visual pattern matching, that allows commands to be given to the DSS by simply speaking them or by making a specific motion or expression to a camera connected to the system. Despite the obvious advantages of a natural language command processor, however, this type of DSS is in its infancy.

5. Depict the role of Decision maker in Decision making process? Can the DSS perform functions of decision maker. Discuss?
   
   The role objective, or purpose regarding the design and use of DSS is to make decisions, through procedures and methods which are the valuable parts of DSS and Decision making process. Different decision maker functions performed by DSS:-
   
   
   1. Stimulus
      
      The first step in the process occurs, when the decision maker pre-assumes one or more problem that requires some decision to be made. This can be due to force of some external factors or perception of a difference between current state and desired state of afire, such stimuli can be in form of opportunity feed back threat, and we different from one to other decision maker. There can be some disperses as it is possible that there is no problem, but the decision maker misestimates some fig. and identifies a problem.
   
   
   2. Decision maker
      The decision maker is truly a “Black Box” in every sense of word. It is also defined as simply next step or event following the onset of stimulus.
      
      Problem DefinitionThe problem solver is means to identify and formulate the problem effectively before starting. The decision process is the crucial phase for successful outcomes of decision making process. In case the problem not properly formulated, then the solution will not be feasible and this will result in wastage of time and effort.
      Alternative SelectionsThis phase is crucial in case the DSS provide number of quantitative approaches to solve a problem and there is a set of feasible alternatives to solve the problem. The decision maker with Assistant manager used to choose the best alternative before moving ahead in decision making process. This is the phase where we are least naturally equipped but for its most important effective use of DSS.
      ImplementationOnce the decision maker stales for the particular solution, the decision process triggers a course of action for implementing the decision and solving problem, these session require the solution and evaluation of its feasibility in correct scenario.
      


6. List the decisional forces with examples which can effect making of a decision?
   
   Some forces, which can make effect on making decisions throughout decision making process; are listed bellow:-
   
   • Economic and environmental forces:- It includes limits of resources, government regulations, moral, ethical, natural decision being consider, competitive market pressure, demand of consumers etc. organizational force like organizational culture policies and procedures, coordination of staffs, degree of interactivity of managers with superiors and sub-ordinate, organizational climate, this include, whether innovative thinking is encouraged, stick implementation of policies and procedure is done.
   
   • Context or Emergent Forces:- A significant force of constraints to the decision problem itself. This category faces issues related skill time requirement, motivation to make a decision and perception of decision maker. These factors have high impact to the context of unambiguous. Other factor like total certainty implies, complete and accurate knowledge regarding outcome information. Genuine uncertainty suggest that outcome of reason can’t determine within the boundary of framework. Always there is some uncertainty, the decision maker assigns some probability to expected degree of outcomes.
   
   
7. What are the major classification of decision maker? Is the procedure of taking decision is similar to all these classes?
   
   Many different types of decision maker must be supported in many different types of problem contexts, that’s why different types of DSS exist. Modules of different types of decision maker has been classified as follows:-
   
   Individual Decision Maker
   
   This class of users essentially works alone during the decision process in the sense that the ultimate generation of a final decision rests solely in their hand.
   
   Multi Decision MakerThis class of decision makers consists of multiple individuals interacting to reach a decision makers to reach a decision. The multiple decision makers involved have a stake in a particular decision outcome and thus are motivated to reach eventually agreement and common commitment to a course of action.
   
   Group Decision Makers
   A group decision maker is a characterized by membership in a more formal structure where members of the group share a similar vested interest in the decision outcome and an equal say in its formation, group decision makers generally work in a formal environment that consists of regular meetings devoted to working through the decision process, formal schedules and agendas focusing on specific portion of the process, and often deadlines by which the decision must be finalized and implemented.
   
   Team Decision MakersThis class can be thought of as combination of the individual and group classes. Often an organization structure is such that even though the authority to make a particular decision rests with an individual manager, who is supported by several assistant and working towards goals. Here decision outcomes are often negotiated outcomes, however decisions are normally unilateral in nature. Only one decision maker has the authority and responsibility to make a unilateral decision.
   





8. Discuss the Decision Style Models in Detail?
   Ans:- Decision style is a term used to describe the manner in which a manner makes decision:- Details are referred as in the Answers of Q.no.5 and Q.no.6 .
   





9. Discuss Simon’s Problem in details?
   
   Ans:- Simon’s model of Decision theory is indeed based into the concept of “Black Box” decision making process. Regardless of this theoretical approach we embrace, it is important to realize that the development of a good prescriptive approach to decision making – such as the design and implementation of a DSS – is rooted in the development of a workable and sound descriptive theory.
   
   
   This Simon’s model continues to withstand the test of time and, even today, serves as the basis for most models of management decision making. Notice that the model depicts the problem solving process as a flow of events that can proceed in either a linear or iterative fashion. That is at any point in the process, the problem solver may choose to return the previous steps for additional refinement.
   The process begins with the intelligence phase. During this phase the decision maker is “on the lookout” for information or knowledge suggesting the presence of a problem or the need for decision. This scanning activity may be either periodic and continuous in nature. Problems tend to manifest themselves as the noticeable difference between a desired state and the present state Implicit in the “activation” of the problem solving process is the detection of a problem that can be “owned” by the problem solver. If the decision maker of his or her organization can’t solve the problem, then it can’t be owned and therefore doesn’t trigger the next phase of the process. Indeed such conditions tend to be classified as constraints or conditions that may be necessary to consider when solving problems that can be owned.
   





10. Describe the active based topology of decisions give example of each class?
    
    In 1973, Mintzberg proposed a topology of decisions that focuses attention on the activity with which the decision is most associated:
    
    Entrepreneurial Activities:This type of decision is generally categories by high levels of uncertainty. The section of alternatives is motivated primarily by proactive considerations and is typically focused on near term growth over long term issues.
    
    Adaptive activation: Also categorized by high levels of uncertainty these types of decisions are typically motivated by reactive considerations and are focused more on the short term issues at hand.
    
    Planning activitiesThis decision environment is categorized by high risk and the decisions made are motivated by both proactive and reactive considerations. The focus here is more on growth and efficiency over the long term.
    
    The support necessary for decisions classified in this manner would be determined primarily by the environment in which the decision was being made rather than by actual structure of the decision itself. In this regard, Mintzberg’s classification suggests a differential based on decision strategy rather than decision structure.
    
    
11. Discuss the various kinds of decision models in detail giving examples of each?
    





12. Discuss the impact of organizational culture on the performance of a DSS?
    
    The term organizational culture is widespread in the literature of organizational behavior, theory, structure and management. These are also said as the basic assumptions and beliefs that are shared by the members of the organization or said as “ Just the way things are done around here”. Regardless of the sources of definitions, they also seem to have a common denominator: shared meaning, who defines organizational culture experts an extremely powerful influence over the activities, including decision making, of an organization. Robbins in 1990, identified 10 characteristics of this Organizational Culture. These are as follows:
    
    
    Individual Initiatives The degree of responsibility, freedom, and independence that individuals have.Risk ToleranceThe degree to which employees are encouraged to be aggressive, innovative and risk seeking.
    
    DirectionThe degree to which organization creates clear objective and performance expectations.
    
    IntegrationThe degree to which units within the organization are encouraged to operate in a coordinated manner.
    
    Management SupportThe degree to which managers provide clear communication, assistance and support to their subordinate.
    
    ControlThe number of rules and regulations and the amount of direct supervision that are used to oversee and control employee behavior.
    
    Identity The degree to which members identify with the organization as a whole rather than with their particular work group or field of professional expertise.
    
    Reward System The degree to which reward allocations are based on employee performance criteria in contrast to seniority, favoritism, etc.
    
    Conflict ToleranceThe degree to each employees are encouraged to air conflicts and criticisms openly.
    
    Communication Pattern- The degree to which organizational communications are restricted to the formal hierarchy of authority.
    
    An Organizational Decision Support System can be thought of a support technology that focuses on decisions involving people of organization. Four activities along with a listing of several types of ODSS functions that may be relevant in support of the activities are listed as follows:-
    
    1. Specific Task:- These context include new product development and improved manufacturing process.
    2. Information Gathering:- Information is not necessarily gathered in response to a specific need or crisis but rather as a form of “stock on hand”. As such gathering and use are asynchronous.
    3. Communication Across Subunit:- This entails the use of information for ongoing coordination of activities and implementation of design.
    4. Political Behavior:- Competing interests, scarcity of resources, and behavior equivocality may give rise to symbolic or strategic use of information.
    




13. Give example of successful implementation of DSS?
    
    A few examples are listed bellow, where successful use of DSS has been considered:
    1. Schedular employing a predictive agent for use in a television receiver.
    2. Athena DSS:- Patient Safety in guidelines (Decision support for hypertension Management).
    3. Axigen, (by Parallels).
    4. Oracle E-Business Suite (Oracle Database vault certified).
    5. Dearworkforce
    




14. List the factors that affect the design of DSS?
    
    Factors that affect the design of DSS are listed as follows:-
    
    • Group Structure:- If the decision maker retains sole responsibility and authority to make the decision at hand but employs a formal group of people with defined roles who together provide information or services to the decision maker, then the structure is more representative.
    
    • Group Roles:- Each member of a decision – making body takes one or more specified roles. In the individual structure, all necessary roles are assigned to the sole decision maker: information gatherer, analyzer, DSS user, and so on.
    
    • Group Process:- This process is employed by a decision making body can dramatically affect the type of decisions that can be effectively made by that body, which in turn affects the method or process that can be used to make those types of decision.
    
    • Group Style:- In any decision – making context the various interpersonal relations, consequences of outcome, power and politics and like mindedness can determine both the method and type of decision best assigned to a particular decision making body. The decision maker’s style can affect the process, his or her behavior under specified conditions, and the quality of outcomes.
    
    • Group Norms:- The social psychology of decision making “body” from individual to meta-organizational. Issue relating to shared meaning among the constituents, individual and collective social pressures, genres and prescriptions regarding behavior personal beliefs, and potential sanctions, among others, all serve to shape the decision – making environment within an organization.
    




15. Discuss the hierarchy of organizational decision level and discuss the complexity of decisions that is to be taken at each level?
    
    As Decision making prospective, can be thought of as a hierarchy of three discrete levels are:-
    
    1. Operations (Ground Level)
    2. Tactical (Middle Level)
    3. Strategic Level (Upper Level)
    
    The decision makers in an organization are a large and diverse population of individuals. At the foundational or operations level, the line personnel make decisions regarding day to day activities relating to production or services while the line supervisors deploy available resources and make decisions necessary to meet assigned quotes or schedulers.
    
    The tactical level implements decisions made at the highest level of the organization as well as decisions to acquire the resources necessary to maintain desired capabilities and output at the operation level.
    
    The members of the strategic decision making hierarchy of an organization include the senior executives of the largest industrial and service firms in the world, the top administrators of the largest government agencies. This elite group of decision makers, though the smallest of three in number, consists of the principle decision maker in our society.
    




16. How can one measure the effectiveness of Decision? Can such kind of measure help to improve decision making process discuss?