2.7 Summary
3.1.6 Payment Transaction
Definition 3.6 (Payment transaction) A payment transaction P T is de- fined as a set of actions ACT regarding fund transfer performed by engaging parties in G over a set of communication networks N. P T can be represented as the following:
P T ={G, D, ACT, N} (3.8) In other words, from the equations 3.2 and 3.8, it can be seen that the payment transaction P T can be represented by a number of actions in ACT regarding payment token transfer in the communication environmentCE.
P T ={CE, ACT} (3.9)
ACT is defined as the following set,
where,P O stands forPayment Ordering, DB stands for Debit, CD stands forCredit, and P C stands for Payment Clearing.
Payment Ordering P O is the interaction between C and M in that C requests to purchase goods or services from M. P O can be represented as follows:
P O |=¬(payment-order(C, M, TC)↔payment-order(M, C, TC)) (3.11) where,
• payment-order(C, M, TC): C requests M to purchase goods or services with the amount TC, whereTC is the payment token requested byC. • payment-order(M, C, TC): M responses C’s request regarding the order
with the amount TC.
Note that the above function does not contain the information about goods descriptions because we focus only on money transfer. However, it is not hard to add goods descriptions as one of the variables of the above function.
Debit DB is the interaction between I (through P SP) and C regarding the deduction of the payment tokenTC requested by C fromC’s account. TC will later be paid to the corresponding merchant M. DB can be represented as the following:
DB |=¬(debit(C, I, TC)↔debit(I, C, TC)) (3.12) where,
• debit(C, I, TC): C requests I (through P SP) to deduct the amount TC from C’s account. P SP will later forward the request to I which is located under a banking private network.
• debit(I, C, TC): I (through P SP) deducts or commits to deduct the amount TC from C’s account.
Note that from the Definition 3.2, I communicates with C through P SP. However, as stated in the Definition 3.5,P IC must be known only toC and I. Thus, it is possible to replaceI withP SP in equation 3.12 with the condition that P IC must not be revealed to P SP.
DB |=¬(debit(C, P SP, TC)↔debit(P SP, C, TC)) (3.13)
Note also that the money deduction process varies among payment sys- tems. For example, in prepaid payment system, the value of C’s payment token is deducted from C’s account before C is eligible to make the payment to M, whereas in postpaid one, C is notified that she will be deducted after the completion of the transaction.
Credit CD is the interaction between A (through P SP) and M in order to transfer the payment tokenTM toM’s account. CD can be represented as the following:
CR |=¬(credit(M, A, TM)↔credit(A, M, TM)) (3.14) where,
• credit(M, A, TM): M requestsA (through P SP) to transfer the amount TM toM’s account. P SP later forwards the request to A.
• credit(A, M, TM): A(throughP SP) transfers or commits to transfer the amount TM to M’s account. It is considered as a confirmation that M will receive the money after the completion of the transaction.
As A communicates with M through P SP (from the Definition 3.2), it is possible to replaceA withP SP in the equation 3.14. However,P IM must not be revealed toP SP according to the Definition 3.5.
CR|=¬(credit(M, P SP, TM)↔credit(P SP, M, TM)) (3.15)
Payment Clearing P C is the interaction between I and A to transfer the amount requested byC andM between their accounts. Normally, this type of transaction is performed under a banking private network. P C is represented by the following function:
payment-clearing(I, A, C, M, TC, TM)
where TC ≥ TM. According to the above function, the amount TC is transferred fromC’s account to M’s account by I and A. P C can be derived from the following formula:
debit(I, C, TC)∧credit(A, M, TM)
→payment-clearing(I, A, C, M, TC, TM) (3.16)
From the above statement, Payment Clearing will complete if I has de- ducted the payment tokenTC fromC, andA has transferred the token TM to M. Moreover, it can be seen that I and A in this statement can be replaced byP SP under the same condition as that of the formulae 3.13 and 3.15:
debit(P SP, C, TC)∧credit(P SP, M, TM)
Figure 3.2 demonstrates the directions of payment token transfer. Payment Ordering represents payment token transfer from C to M, even though, in fact, the actual transfer of payment token is processed fromI toAinPayment Clearing. Debit represents the deduction of the value of the payment token fromC toI, although, in fact, this action is performed atI itself because C’s account has been established withI. Credit represents money deposit from A toM even though, actually, this action is performed atAitself becauseM has an account established with A.
Payment
Clearing
I
A
PSP
C
Payment
M
Ordering
Debit
Credit
Figure 3.2: Payment transaction
Note that, from Figure 3.2, the arrows represent the directions of actual transactions. As P SP acts as a medium between C-M and I-A, all actual transactions relevant to Debit and Credit are performed through P SP. The broken arrows represent the directions of actions performed by originators of the actions to their intended recipients.