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► Payment Processing Service – connects merchants, customers, and banks through secure online transactions.
► Gateway – the secure pipe between the banks and the processor
PayPal Shopping Cart Software
.
6
Settlement Process
Payment Processing
Service
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Processor
7 3 4 Customer’s
issuing bank
5
Merchant’s
6
acquiring bank
.
4
The Payment Network Provides Processes and Services
Processes
► Authorization – the process of verifying a customer’s credit card
Services
► Settlement – the process of collecting funds from the customer’s account
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2
The PayPal Opportunity
PayPal is the safer, easier way to get paid by online shoppers around the world.
Introduction to PayPal Payment Solutions
.
PayPal Helps Bring You New Customers
Drivers of Consumer Demand for PayPal
PayPal is:
Secure
Simple Fast
Opportunities for Merchants
► Merchant’s Acquiring Bank – provides internet merchant account
► Processor – authorizes credit card transactions and settles funds for merchants
PayPal Shopping Cart Software
PayPal Growth
► 141M accounts ► 31% yoy volume growth ► 190 countries ► 70+ currencies ► 1000s of merchants add
PayPal every year
PayPal
helps you grow your business
.
3
Understanding the Payment Processing Network
Individuals
► Merchant – seller of goods
► Customer – buyer of goods
Institutions
► Customer’s Issuing Bank – provides customer’s credit card information and verification
1. Merchant informs the payment processing service to settle transactions 2. Payment processing service sends transaction information to the processor 3. Processor checks the information and forwards settled transaction information to the issuing bank 4. Issuing bank transfers funds to the processor 5. Processor routes funds to the acquiring bank 6. Acquiring bank credits merchant’s bank account 7. Issuing bank includes merchant’s charge on customer’s credit card account
PayPal Shopping Cart Software
.
5
Authorization Process
Payment Processing
Service
27
Merchant
8
3
6
45
Customer’s issuing bank
Customer 1
Processor
1. Customer decides to make an online purchase and inputs credit card information 2. Merchant’s website receives customer information and sends it to a payment processing service 3. Payment processing service routes information to processor 4. Processor routes information to bank that issued customer’s credit card (issuing bank) 5. Issuing bank sends authorization (or declination) to processor 6. Processor routes transaction results to payment processing service 7. Payment processing service sends results to merchant 8. Merchant decides to accept or reject purchase