Cyber Cash Model : 

Basic:- To take advantage of the Internet with a complete E-Commerce solution, a merchant's website must be able to accept and process secure online payments. In order to take credit card payments online, merchants need to have an Internet Payment Service and a Merchant Credit Card Account.

1. The Internet Payment Service, such as CyberCash, enables the merchant to accept online payments from their customers and securely processes these payments from a Merchant's Web storefront through the existing system of financial institutions and credit card processors

2. The Merchant's financial institution provides the merchant with a bank account that enables them to accept, process, and deposit payments from their customers, and delivers regular reporting based on these transactions

CyberCash / CyberCoin : CyberCash’s Secure Internet Service delivers a safe, real-time solution for merchant processing of  payments over the Internet. It accepts both credit card payments and cash/coin transactions. The Credit Card Service lets any consumer buy from any ‘CyberCash enabled merchant’.

CyberCash is a system that allows customers to pay by a credit card without revealing the credit card number to the merchant. To achieve this, a credit card number is sent to the merchant in an encrypted form.

Designed to integrate fully with existing transaction processing systems used by banks and other financial institutions, the service provides automated and instantaneous authentication, enabling order processing to traverse the Internet 24 hours a day, 7 days a week.

Consumers Benefits:

●      Safe, private and easy to use. Protected by the highest allowed levels of Internet encryption with assured authentication.

●      Use existing Visa, MasterCard, American Express or Discover. No special credit cards are necessary.

●      Complete on-line payments

Merchant Benefits:

●      Real-time authorization and settlement

●      Receive payments instantly and secure

●      No need to maintain expensive phone or fax operations

●      Open 24 hours a day

Note: CyberCash is a system which uses public-key cryptography to leverage credit cards onto the Internet, and CyberCoin is an extension of CyberCash to allow small-value transactions.

How? CyberCash gives customers a “digital Wallet”. The consumer downloads the CyberCash digital wallet software, and enrolls their credit card with the wallet, and with CyberCash; they may also open a CyberCoin account and move some money into it.

When the consumer approves a transaction, an encrypted payment order is sent to the merchant, who adds some payment information, signs the order, and forwards it to the CyberCash gateway. The merchant never sees the consumer's credit card number.

In Detail:

●      When the purchase was initiated, the CyberCash wallet displayed the amount, the merchant's name, and other information. Then the customer completes the purchase by clicking on the cyber cash PAY button of a merchant’s World Wide Web site, an encrypted payment order was sent to the merchant.

●      The merchant’s CyberCash software verifies that neither the order nor the ‘encrypted payment information’ have been modified during transmission. The merchant could decrypt some of the information in the order, such as the product list, the address, etc., but not the other (such as the credit card information). Then merchant's software would add its own payment information to the order, digitally sign it, and then send it to the CyberCash gateway.

●      The CyberCash gateway verifies that no modification have been made to it during transmit and would decrypt the information. The order would be checked for duplicate requests. The gateway would verify that the customer's and the merchant's order information match (i.e. no fraud was committed on either side). Then it would perform the money transfer and send the approval message to the merchant.

Once approval is received by the merchant’s server it notifies the customer. The whole process; from the customer initiating the payment to getting approval, takes less than 20 seconds.

The digital wallet initially supported only credit cards, but now also does ‘small dollar amounts’ for products and services that are too expensive to justify using a credit card. Cyber coin money is placed in to an account at cyber cash and as while making cyber coin transactions money is pulled out from your wallet and sent to the cyber coin merchant’s wallet. In a sense cyber cash process electronically presents your credit card payments to the merchant in the process just like the last time we physically pulled the card out of our wallet and presented it to a merchant.

CyberCash's CashRegister System:- Firstly CyberCash's CashRegister software is needed that offers three methods for authorizing consumer purchases and actually billing the consumer's credit card: online capturing, post-authorization capturing, and batch capturing.

[Basic of Classification: The processing method a merchant uses is dictated by how products are delivered to consumers. Merchants selling products or services that are being delivered online or that are guaranteed to ship the same day will use online capturing. On the other hand, because of mail order laws, merchants selling products that are shipped after the order is taken may choose post-authorization capturing or batch capturing. ]

Classifying the 3 methods for customer purchase authorization:

●      Online Capture: here transactions are captured and charged to the consumer's credit card as soon as they are authorized. This method is appropriate for merchants selling on-line services, information, or software that is being delivered immediately to the consumer over the Internet. It also appropriate for merchants who can guarantee shipment of material goods on the same day that they are ordered.

●      Post-Authorization Capture: With post-authorization capturing, the merchant uses CashRegister's administrative server to capture individual transactions using a post-authorization message that is sent to the processing bank. This message tells the bank to capture the transaction and charge the transaction to the consumer's credit card. This method is appropriate for merchants shipping merchandise more than a day after the consumer has ordered it.

●      Batch Capture: Batch capturing is a variant of post-authorization capturing. The merchant uses the CashRegister administrative server to capture transactions using a batch capture model where the merchant saves up the authorizations and submits them in a batch to the processing bank. The batch data contains all of the authorized transactions that the bank needs to reconcile your merchant account and transfer funds. If a merchant is processing a lot of orders, this procedure is probably more efficient than using post-authorization capture for each transaction.