Online Payments Security Part. II

The strong authentication devices: 3D Secure e-Card ...

Thus, in order to identify the owners of cards, but also and especially to strengthen the security of online payments, some banks have introduced single-use maps (such as e-Carte Bleue) from 2002. Electronic clone a credit card, they provide a single use code generated by the user on the site of his bank card from her real. Once payment is made with this code, it is no longer usable for any other purchases. But this type of solution prolongs the act of buying and makes it less suitable for repeated payments of small amounts (news article, listening to the unit ...). It also represents a considerable cost both to the bank and for the user, and has been poorly received by the public.

Therefore, some banks have decided to implement the system in 2008 "3D Secure". Any buyer must take on a secure page on the bank a secret code known only to him, as well as authenticating the cardholder. The debate remains about the nature of this code. Used to launch 3DS, date of birth as the user PIN is gradually put aside in favor of an SMS sent by the bank, the most popular solution among Internet users, or a code transmitted by a "token “.  It remains to weigh the cost of these solutions, which can range from 0.5 to over 10 € per cardholder per year.

Unfortunately, this system proved to be confusing in practice much more than expected to the Internet. Very little communication was made to holders of cards, whether through banks or online shopping sites, most buyers were confused and even frightened at the appearance of a separate page asking them for such as their date of birth, and that at the most critical of the act of purchase: payment. Many of them have therefore preferred to abandon their purchases for fear of attempted fraud or phishing ... Consequently; a large number of sites selling online immediately contacted their banks to exit the 3D Secure system, after finding a reduction in sales volume up to 20%.

The challenge is therefore to secure adequate payments to deter fraudsters, without complicating the process of payment and impacting end of the chain volume of sales.

Online Payments Security Part. I

The credit card is by far the payment method preferred by two third of the people in the world by using the Internet regularly to access their purchases directly on the Internet. But it is also the use of the card that is increasingly threatened by fraud. Indeed, the total amount of fraudulent transactions on the Internet is growing much larger than the amount of fraud carried out by other channels (using a stolen use card number to purchase by mail order over the phone etc.).

This observation, which is not new, had led banks and systems vendors to offer more secure during the 2000s. The generalization of SSL (Secure Socket Layer) has limited the flight card numbers during data transfers between bank buyer, seller, and their respective banks. Adding a cipher text security "arbitrary" helped to stem the proliferation of generating fraudulent card numbers with valid 16 digits (which follow a very specific algorithm). Sellers have also limited the storage of this information in their databases, to prevent intrusion attempts in their massive e-commerce platforms. Finally, the payment terminal are masking a part of the card number on the invoice slips and allows the payer to introduce its own map without intervention by the cashier, which limits data retrieval via the retail channel. But other fraud techniques have over taken it.

The major risk lies in failure to identify the buyer as the rightful holder of the card that is a strong authentication. It leaves the door open to other techniques for recovering the coordinates, such as "phishing" (to believe that a cardholder is for an interlocutor trusted by mail or through a fake website) particularly popular in recent years.

Certainly, if the buyer is not the rightful holder, then the genuine holder may challenge the transaction as the law allows it and then be reimbursed free of transaction amount. But this leads to increasing costs for banks and continues to fuel some psychological barriers among potential users of e-commerce.

Heavy charges on the Credit Cards

The latest survey conducted in France points out the lack of transparency in the banking community regarding fees and charges levied by them on credit card transactions. Sense of opacity and injustice are the two main feelings expressed by the artisans and traders surveyed by the   on the commissions charged by banks on credit card transactions
According to the latest survey , commissions  weigh heavy for these entrepreneurs. Between 0.5% and 1% of their turnover for the three quarters of them, plus a set fee from the rental payment terminal at the telephone terminal via the contribution for those offering financial payments on credit.
 Over 40% prefer to limit their costs by denying the CB below a minimum purchase, while nearly half say they are aware that these practices adversely affect their turnover business.

The banker did not explain how the amount of commission or the default interest is arrived; entrepreneurs are forced to do their own calculations and analysis more over variation as a function of turnover for some of the industry for others, even the client's head for 28%!

For artisans and traders surveyed by the Team, the solution lies in greater transparency of bank with one hand, the average rate of release that would allow them to play competition and, secondly, the provision of summary of fees charged. In contrast, only 20% considering Government  intervention, with setting a maximum charge of credit card transaction or incremental costs of commission.

The term loans

Banks may grant loans to businesses in the short medium and long term which is called as term loans. When talking about the term loans they are defined according to the duration of the loan. The term of a loan is important; the conditions for long-term loan are not the same as that of the short term loan. In real estate, loans given out are most long-term loans that is the repayments spread over a period of more than 7 years. For the short-term credit, it is a credit whose duration does not exceed 2 years. Most of the short term loans are given out for the consumer products. Generally 70% of the maximum net amount of investment will be given as term loan and the additional 30% need to be raised by the borrower himself.

Though each bank shall fix their own lending rate of interest, the interest rates for the short term loans will be more than the long term loans. The duration for the short term will be less than two years. The term for the medium term loan is between 2 to 7 years and for the long term loan it is between 7 and 15 years which depend upon the nature of investment and the repayment capacity of the company.

The short-term loan is a loan whose term is less than 2 years. The medium-term loan is a loan whose duration is between 2 and 7 years. The long term loan is a loan whose duration is between 7 and 15 years (especially for commercial property). Depending on the nature of investments and the repayment ability of the company, a grace is possible. Apart from the interest, the borrower has to pay one time processing fee or the administrative fee and yearly recurring insurance premium against which the loan is raised.

Impact of the Japanese Earthquake on US Treasury Bills

Will  the natural disaster  bring Japanese to sell out  their holdings of U.S Treasury bills?  Which will  lead to higher interest rates and therefore a fall in housing markets?  Historically, the Japanese are major buyers of U.S. debt since the beginning of 2010 and they are the top most too. With a good earning population and a high level of savings, the Japanese bought lots of US Treasury bills through their pension funds and insurance in particular.
          The Treasury bonds of United States hold by Japan is around 768.8 billion dollars, and Japan  is ahead China(755.4 Billion dollars) in 2010.After the disaster, it is necessary to rebuild the nation which  will become a first and foremost  priority for Japanese.

     Following the massive damage that occurred in Japan due to the earthquake and tsunami, they will have to reconstruct their country. For the reconstruction they have to raise huge fund and The Japanese has to finance this reconstruction by selling the U.S. Treasury bonds they hold with them.  Selling Treasury bills could cause a financial collapse or at best to raise the rate at which the U.S. Treasury borrows.
     For he will return more attractive to buyers. By rising interest rates on treasury bills, the bank will raise the interest rates, subsequently it will make difficult for investors and companies wanting to make money, threatening to raise unemployment and reduce business investment in the European countries. Higher rate of interest will show a heavy impact on real estate market and the hence real-estate market will be in down trend throughout the world.

     If the withdrawal of Japanese investments in U.S.  would take place, that would entail a high risk of rising interest rates and therefore higher rates of real estate financing that might make it impossible for many European countries and the borrowing will be minimum to the real estate purchase.  Perhaps the rise of oil with petro-dollars will offset the withdrawal of Japanese assets in U.S.?