Datasheet

16 Part I  Overview of Commerce

As you noticed, we don’t classify initiating a payment (such as a bank transfer

while within the mobile banking provided by banks) as a mobile payment: It

is simply a feature of mobile banking.

In addition to mobile payment options, other payment solutions are gaining

traction in the ﬁnancial industry. A very active solution is iTunes by Apple,

Inc., which is categorized as a micropayment aggregation mechanism. Apple

iTunes is considered a micropayment solution because it is still limited to digi-

tal content purchases such as music, video, digital books, and so on with a low

value. Similar to other emerging payment solutions (for example, mobile), Apple

iTunes will become a serious contender in ﬁnancial space when it will also be

used to purchase big-ticket items.

Another new-wave payment solution is to use contactless devices for pay-

ment. Contactless (also known as proximity, vicinity, or NFC) technologies have

gained their name because, unlike the traditional plastic cards, they do not rely

on a physical contact with the PoS to initiate transactions. These devices usu-

ally include an inductive antenna, which is energized by way of being close to

an electromagnetic ﬁeld (provided by the PoS), and a microchip that contains

ﬁnancial information of the holder. Almost all major ﬁnancial institutions have

a live contactless project in some parts of their network, or are working on one.

Examples include payWave by Visa, PayPass by MasterCard, ExpressPay by

AMEX, and Zip by Discover networks. Albeit a very convenient payment tech-

nology, a major impediment in the adoption of contactless payment solutions

has been the need for modifying the PoS. In other words, the PoS device must

be changed to be able to support contactless devices.

In this section, we have covered only the very basics of the payment industry:

merely the ﬁrst couple of letters in the payment alphabets. Other advanced topics

such as large-value payments (the process where, for instance, a state buys air-

craft from another state), commercial payments, general purpose payment cards

(GPPC), the details of EFT- and PIN-based networks, PIN-less debit transactions,

funding costs and managing transaction expenses, inner-workings of global

payments, cross-border payments and their tax ramiﬁcations, and emerging

payment technologies (such as contactless and mobile payment, carrier-billing,

and near-ﬁeld communication or NFC-based instruments) are all hot and current

issues in the payment industry and each deserves a book to do it justice.

Distributed Computing: Adding E to Commerce

We have covered the basics of commerce and payment. Combining the two

with a little bit of high-tech and distributed computing will get you exactly

what you want: an operational, functional, scalable, and secure e-commerce

infrastructure. In this section, we describe the technical foundation and key

elements of distributed computing and how they contributed to the advent of

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