New Rules for E-commerce – A SPN Exclusive Article Part 2

ecommerceWhen the Internet was conceived, it was developed as an ‘information highway.’ It has evolved into an e-commerce solution that is a mandatory component for every business. However, the Rules of E-commerce have changed.

In this article we introduce the new rules and how they impact online Merchants.

• In Part 1, we discussed how the new rules impact consumers.
• In Part 3 we will discuss how the new rules impact web hosting companies.
• In Part 4 we will discuss how the new rules impact shopping cart developers.
• In Part 5 we will discuss how the new rules impact smart phone application developers.
• In Part 6 we will discuss how the new rules impact smart phone banking applications.

How the PPOS Operates

The new PPOS is not a storage device, but rather a payment application. None of the data entered on the application is saved or stored within the application. All saved and stored data resides in a cloud computing service, which is usually owned and operated by the bank or the company that issued the credit cards.

Consumers concerned about identity theft need to know that the new digital wallets equipped with a PPOS are guaranteed to protect your identity. The safest place to store your credit card details is with the bank or institution that issues your credit card. The second safest place to store your profile and card data is in one of the cloud computing services designed specifically for that purpose. After all, they already have this information.

When the PPOS is initially launched, you are presented with data collection forms to create your profile and enter your card details. The submit function uploads the profile to the gateway server that encrypts the data, returns an unlock key, and then stores the encrypted file with the appropriate cloud. The returned unlock key is stored within the PPOS, along with a description of the card, but not the card details. For example, the stored description might read Capital One MC Platinum.

New Rules Protect Merchants

The prime concern of all online merchants is cost. The PPOS will be treated as a card-present sale, so its use will reduce discount rates, lower incidents of charge backs and help to fight fraud. In addition, merchants will no longer need to purchase SSL Certificates, additional firewalls, or secure Payment Card Industry (PCI) compliance. The average online merchant, with 150 transactions per month at $86 each, will save over $2000 per year.

Once implemented, the PPOS will be the basic building block for the further enhancement of a merchant’s advertising and marketing efforts, as more merchants turn to the deployment of smartphone applications tied to the PPOS to promote sales and build customer loyalty.

In summary, here is an overview of how the PPOS processes online purchases. A consumer visits a website, selects the items he/she wants to purchase and adds the items to the shopping cart. When the consumer selects the check out feature, he/she proceeds to the payment area of the website where he/she is presented with a number of payment options.

When the consumer selects the CQRpay button:

1. The shopping cart software generates and uploads to the processing gateway, a file containing the merchant identification, as well as the invoice details.
2. The shopping cart software receives confirmation from the gateway that the transaction was received, displays a transaction number, and then closes the invoice.

At this point the merchant has an open unpaid invoice with no knowledge of the consumer’s identity.

3. The consumer then opens the PPOS and retrieves the transaction number.
4. The PPOS displays the identity of the merchant, the invoice number and the invoice details, as well as a number of payment options.
5. The consumer selects the payment option and processes the payment.

Once the transaction is processed:

6. The PPOS displays the authorization number and saves a record of the transaction.
7. The gateway then sends the authorization to the merchant to complete the transaction.
8. The merchant may choose to send an e-mail confirmation to the consumer.

The same file, passed to the transaction processor, can also be read by the smartphone application specific to the needs of the merchant. For example, consider how a hypothetical grocery chain might take advantage of the methodology employed with the PPOS. Assume the retailer provides a smartphone application and offers a loyalty card. The invoice file passed to the consumer at the time of purchase could include additional information, including the ability to alert consumers of upcoming events, specials, coupon offers, etc.

Let us assume this grocer includes a meal planner as part of their smartphone application. The consumer can plan meals for the week, select main course items based on the grocer’s advertised specials, and receive suggestions regarding additional ingredients such as seasonings, vegetables for the meal, etc. The app may then offer recipes, appetizer suggestions, beverages to include, and perhaps a dessert selection. Over time, the app could track shopping habits and remind the consumer of purchases made in the past, such as milk or sugar, or whatever the household has purchased on a regular basis.

To register as a merchant and to download the application programming interface (API), click HERE.


The digital wallet will protect the cardholder’s identity and will provide a new and convenient way to make purchases, both online and on multiple hardware platforms.

The PPOS digital wallet will be a welcome solution for merchants who wish to save costs on card-not-present sales, chargebacks and fraud attempts. With its ease of implementation for merchants and the inherent acceptance by consumers, merchants will benefit by using CQRPay.

Victor Arcuri is a Canadian businessman who, for greater than 10 years, has operated CQRPAY, Inc., a secure gateway for credit card processing for Internet-based merchants. Our independent gateway service is unique in that it is the only application that connects to every merchant account provider and every bank in Canada and the USA.

Our platform enables merchants to use the service regardless of any affiliation they may enjoy with a merchant account provider, bank, POS device supplier or shopping cart software developer.

We invite your questions by phone 403-234-0844 or e-mail.

For more information visit:

About the author


Victor Arcuri

1 Comment

Click here to post a comment