Study Guide
Table Of Contents
- PayPal Certified Developer Program Study Guide
- Contents
- List of Tables
- Online Payment Processing
- Internet Security and Fraud Prevention
- Why Every Business Should Be Concerned About Internet Fraud
- Liability for Internet Fraud
- Internet Fraud: What It Is and How It Happens
- Who Is at Risk for Online Fraud
- Reducing Exposure to Fraud
- What Banks and Card Associations Are Doing to Prevent Online Credit Card Fraud
- What PayPal Is Doing to Protect Your Business Against Fraud
- Disclosure and Compliance
- PayPal Fraud Protection Services
- Review Questions
- Getting Started With Account Setup
- API Credentials
- Name-Value Pair (NVP) API
- Express Checkout
- Direct Payment API
- Transactions
- Sandbox Testing
- Answers to Review Questions
- General Reference Information
- Glossary
- Index
PayPal Certified Developer Program Study Guide March 2008 13
Online Payment Processing
What to Look for in an Online Payment Processing Solution
1
2. Merchant’s website receives customer information and sends it to payment processing
service.
3. Processing service routes information to processor.
4. Processor routes information to bank that issued customer’s credit card.
5. Issuing bank sends authorization (or declination) to processor.
6. Processor routes transaction results to payment processing service.
7. Processing service sends results to merchant.
8. Merchant decides to accept or reject purchase. (Here, the merchant should take additional
precautions to ensure the credit card is not stolen and that the customer actually owns this
card.)
Payment Processing Settlement
Once the merchant has shipped the product or authorized the download of merchandise, the
merchant may request that the payment processing service settle the transaction. During
settlement, funds are transferred from the customer’s account to the merchant’s bank account.
1. Merchant informs the payment processing service to settle transactions.
2. Payment processing service sends transactions to processor.
3. Processor checks the information, and forwards settled transaction information to the card
association and card-issuing bank.
4. Transactions are settled to the card issuers and funds move between the acquiring bank and
issuing bank. Funds received for these transactions are sent to the merchant’s bank account.
5. Acquiring bank credits merchant’s bank account.
6. Issuing bank includes merchant’s charge on customer’s credit card account.
What to Look for in an Online Payment Processing Solution
Finding a reliable, secure, and flexible payment processing solution is critical. A payment
processing solution should be:
Secure
z Backed by an established, trustworthy company
z Comply with the Payment Card Industry (PCI) Data Security Standard
z Provide comprehensive and standard antifraud features
z Store customer financial information with state-of-the-art encryption
z Supply password-protected account management