Learn about card payments as payment method in the context of Accounting as a Service.
Card payments refer to the traditional payment system issued by financial institutions, such as a bank. The payment method is based on a physical card. The card enables the owner (i.e. the cardholder) to access the funds in the cardholder's designated (bank) account, to make payments by electronic funds transfer.
When working with Accounting as a Service, the following card payment methods are supported:
Instead of using cash when making purchases, a debit card (also known as bank card or check card) can be used. This type of payment card is similar to a credit card, but unlike a credit card, the money is directly debited from the cardholders bank account when performing a transaction. Some cards may store a value that is used to make a payment, while most cards forward a message to the cardholder's bank to withdraw money from a specific payer bank account. Sometimes the primary account number is assigned exclusively for use on the Internet and there is no physical card. In many countries, the use of debit cards is widespread enough that their volume has overtaken or completely replaced checks and, to some extent, cash transactions. Unlike credit cards and charge cards, the development of debit cards has generally been country-specific, resulting in several different systems around the world, often incompatible with each other.
A credit card is a payment card issued to a cardholder to enable them to pay a merchant for goods and services based on the commitment of the cardholder to the card issuer to pay the amounts paid plus other agreed fees. The card issuer (usually a bank) establishes a revolving account and grants the cardholder a line of credit from which the cardholder can borrow money to make payments to a merchant or for cash advances.
In this context, a prepaid credit card can also be used. The prepaid credit card, unlike the normal credit card, cannot be used if there is not enough money on it (the reference account). These cards can be used for payments only if the cardholder has sufficient money on their card. In that case, the cardholder can perform the same actions as with a normal credit card, until funds are depleted.
Accounting as a Service provides a full-fledged 3D Secure solution which is seamlessly integrated and part of the pre-built UI solution. Therefore, for using 3D Secure, you have nothing to do in addition to the pre-built UI integration. This section explains the background of 3D secure.
The term 3DS stands for 3 Domain Server. The technology is named this way because every 3D Secure transaction involves three parties: • The acquirer domain – the merchant’s bank accepting card payments • The issuer domain – the organization that issues the card being used in the online transaction • The interoperability domain – payment systems that act as connectors between an acquirer domain and the issuer domain (card scheme)
A high-level overview of the 3D Secure. 3D Secure ...
Since the introduction of 3D Secure 1 nearly two decades ago, e-commerce has changed dramatically. Mobile and in-app payments are booming, a seamless shopping experience is more important than ever, and security requirements are increasing. For this reason, EMVCo, the global technical body that facilitates worldwide interoperability and acceptance of secure payment transactions, has developed a new standard authentication method for payment card transactions, 3D Secure 2 (3DS2).
This protocol meets the requirements of the second EU Payment Services Directive (PSD 2) for strong Customer Authentication (SCA) for online payments in the European Economic Area (EEA). The 3D Secure 2 workflow remains identical to the 3D Secure 1 workflow. However, 3DS2 introduces the opportunity for frictionless authentication. Thus, 3DS2 transactions can follow either a frictionless or a challenge flow. Based on the data, the issuing bank decides which flow is triggered:
If the issuer does not support 3D Secure 2, an automatic fallback to 3D Secure 1 is initiated.
A high-level overview of the PSD 2. PSD2 ...
PSD 2 comes along with the following main changes:
PSD 2 comes along with the following main goals:
SCA is a security measure relying on two-factor authentication (2FA) to verify the identity of the consumer during a payment transaction. SCA can combine two of the following 3 factors, which must be strictly independent of each other:
SCA needs to be applied where the payer ...
The 2FA shall result in the generation of an Authentication Code (AC). The Authentication Code shall be only accepted once by the PSP when the payer uses the AC to access its payment account online, to initiate an electronic payment transaction or to carry out any action through a remote channel which may imply a risk of payment fraud.
First, as with 3D Secure 1, 3D Secure 2 also protects the merchant from liability in cases of fraud. 3D Secure 2 is the premier authentication method for online card payments, thanks to a series of updates that improve not only the security but also the usability of 3D Secure 1 (3DS1).
3D Secure 2 has been developed, and is supported, by Mastercard, VISA, American Express, UPI, Diners Club, Discover, and JCB.