Below is a preliminary list of issues necessary for preparing the implementation is an EC-DC pilot in Chile. This document deals mostly with the requirements of the payment system.

Objectives:

Implementation of an Electronic Commerce Payment System (EC-DC Center) in Chile run and operated by an entity created (or existing). The term Commerce Service Provider (CSP) and EC-DC center are used interchangeably in this document to mean an entity that provides electronic commerce services to merchants. This includes (but is not limited to) provision of secure online credit card payment systems, mall services, merchant profile administration and store profile administration. The pilot would focus on the sales of tourism services and locally produced artifacts. To ensure sustainability, the EC-DC center would be scaleable to accept other merchants.

Merchants and Types of goods/services:

Identify possible businesses and types of goods and services that will be sold via this pilot. It is also necessary to identify the potential consumer base (location and type of consumer) and the estimated cost of the goods or services. Due to the floor limits of credit cards and the cost of shipping and handling individual goods, product selection will play an important role on the business model used.

Action 1:

Select merchants and goods for the pilot. Tourism and locally produced artifacts would be good for a start. Between 2-5 merchants representing the selected category of goods and services will be needed for a start.

• Card Brands: Identify the card brands that will be accepted for credit card processing. Most popular card is VISA (with more than 630 million cards accepted in 247 countries and territories). Other very popular brands are Eurocard/MasterCard and American Express. For maximum coverage, VISA, EuroCard/MasterCard and American Express need to be supported. Diners could also be supported but their service is not excellent.

Action 2:

VISA, Mastercard and AMEX should be supported to cover a wider consumer based. If only one card is to be supported at the initial stage, it should be Visa.

• Acquiring Institutions: Identify card acquiring institutions that support the selected card brands. Determine if the candidate acquiring institutions provide MOTO contracts to merchants and how payment requests from merchants are submitted. Provision of MOTO contracts does not mean that the acquiring institutions accept electronic submission of payment authorization and clearing. For a successful implementation of an EC-DC center in Chile, the acquiring institutions need to accept card authorization and card debit submissions via electronic methods using public or private networks directly from the CSP hosts also connected to this network. This network connection and the associated software and protocol(s) will form the CSP-Acquirer Link.

Action 3:

Select an acquiring institution. The selected institution must be able to provide MOTO contracts for at least Visa brand to merchants in the pilot.

• Supported Currencies: Decide on currencies that will be supported for payments by clients. The currency is bound to the MOTO contract established between the Merchant and the Acquirer. The Acquirers usually establish contracts that are bound to the local currency in the region where they operate. The international clearinghouses take care of the currency conversion and the funds will be deposited to the local bank account in Moroccan Dirham.

Action 4:

It is recommended that the currency used on the online Web catalogue be US Dollars since the target consumer-base will be outside Chile.

• Protocol Supported: For an acquiring institution that provides MOTO contracts and supports online payment submission from the CSP, identity the network or communication protocol used for exchanging payment data with the CSP. The network or communication protocol is a vital component used for establishing the CSP-Acquirer Link. Commonly used protocols (including security) are:
  • SSL: MD5 (128-bit), RC4 (128 bit), 3DES (168-bit), SHA (160-bit), 1024-bit RSA for key distribution. Security based on mutual authentication, encryption, and data integrity
  • IPSEC: MD5 (128-bit), DES-CBC (Cipher Chaining Block) – IETF protocol for IP level security. Might replace SSL for Channel Level security with IPv6 deployment.
  • ISDN: Security based on dedicated connection, caller ID and mutual authentication and CSP/merchant authorization.
  • X.25: Normally no encryption. Mutual authentication and merchant authorization.
  • Frame Relay: Could be used to encapsulate X.25 packets for implementation of X.25 solutions. Widely used in Latin American and US networks in place of X.25.
  • X.400: Symmetric Stream encryption (IDEA) with static key stored on merchant host. Used by EuroPay, Switzerland (for EuroCard/Mastercard transactions) and requires the installation of an X.400 gateway.
  • PSTN: Authentication based on circuit-switched (dedicated) connection, caller ID and mutual authentication and merchant authorization.