Payment switches for open networks

Abstract

We describe the first operational Internet payment switch that provides real-time authorization suitable for direct use by merchant servers. A payment switch is a server that creates digital representations of conventional financial instruments and forwards authentic payment orders on these instruments to their corresponding conventional financial networks and institutions. Our payment switch provides support for time-based and item-based pricing, implements switch based authorization and settlement aggregation for micro-payments, and includes an extensive customer support system in order to provide a high level of customer confidence in electronic commerce. Fraud control is based on a transaction-specific multi-level security model that accommodates existing Internet browsers. Multiple authentication technologies are applied to every transaction.