IT430 E-Commerce Assignment 3 Solution Fall 2013

Read the following scenario carefully and answer the questions with suitable answers. Long details are not required.

Let say that MrUsman is a merchant and has his own website through which he sells the goods containing different items like articles / journals / music and much more.

Mr. Mehmood is a buyer and wants to purchase few items from internet through Virtual Pin payment system.Mr. Mehmood uses first virtual for buying goods.

Mr. Usman and Mr. Mehmood have to register with the FV (First Virtual) to make the whole process of transaction and delivery of goods.


Question No.1

How does Mr. Mehmood get the Virtual PIN? Which kind of information he has to provide to register him.

Solution: Mr. Mehmood registering with FV forwards his or her credit card details and email address to FV and in exchange receives a pass phrase called, Virtual PIN.

Mr. Mehmood  browses the web server where FV registered merchant is selling goods. Mr. Mehmood is asked to enter his/her Virtual PIN by the merchant site.

Question No.2

Before the establishment of a link between Virtual PIN and the credit card number, the credit card number is given to FV. How Mr. Mehmood will provide his credit card number to FV?

bY telephone call.

Question No.3

After successfully registering with FV Mr. Usman (Merchant) will request for payment processing. Which processing system is responsible for connecting different banks? i.e. the banks of buyer and Merchant

 Solution: Automated Clearing House (ACH) SYSTEM.

Question No.4

How does e-mail play role in the whole processes of selling and buying in Virtual PIN Payment system?

 Solution: If Virtual PIN is not blacklisted, the merchant may acknowledge this fact to the buyer by email and sends the goods, and also sends transaction details to FV. FVIPSS or simply FV server sends email to the buyer if the goods were satisfactory.

Question No.5

After the goods have been selected and Virtual PIN has been accepted, which kind of actions is taken by FV server and the merchant?

Solution:   Virtual PIN payment system is one of the earliest credit card base systems launched for the internet in 1994 by a company ‘first Virtual Holding, inc. company’. Virtual pin system does not involve the use of encryption. Payment is made through the credit card in this system. The objective was to allow the selling of low value information items without the use of any special client software or hardware.
Both merchants and buyers are required to register with First Virtual. The transfer takes place with the help of automated clearing house (ACH) service. Note that ACH is a centralized system to which different banks are electronically connected forming a network for clearing payments requests. At the end the payments proceeds from the credit card issuer bank to the account of the merchant with acquire bank (merchant bank) through ACH, After First Virtual deducts a pre-transaction for its services