The next step in the evolution was the use of gold and silver, which became the most commonly used commodity money, and are still used today by our government and banks to run our financial systems. The central banks have replaced the gold and silver with banknotes (cash and cheques), which are backed by deposits of gold and silver.

A payment falls under what is called a legal tender and the current banknotes are legal tender. With the introduction of computer systems, the movement of funds was done electronically. Credit cards were introduced in the 1970s, and they evolved into e-payments.

E-payment begins and ends with banks, which sit at the very front, middle, and end of any payment, maintaining buyers' and sellers' accounts and creating proprietary networks for facilitating access points, such as ATM, IVR (phone banking), branch banking, POS, and virtual banking. Security has always been an issue when it comes to payment methods.

Cash and banknotes are the least secure: it is up to the individual owner to protect them. Banks were created to protect large amounts of funds, using a sophisticated safe and alarm system. But that never stopped criminals from trying to steal. With e-payment new security measures were required to protect a cardholder when using a credit card to make a purchases.

The security check was originally done face to face, making the merchant responsible for verifying the customer. As processes became more automated, payment networks were developed which allowed merchants to swipe a customer's card for a purchase.

These networks were created with some early warning systems incorporated, such as blacklists. If a card was on the blacklist, the merchant was instructed through the POS to obtain the card from the customers and destroy it. Internet credit cards have become the de facto payment standard for consumer transactions, because credit card transactions can still be processed without customer and merchant authentication.

Banks are able to leverage the existing infrastructure for credit cards, and are willing to use it to process more and more transactions, and therefore to derive more revenue from their customers. Although credit card risks are changing, customers understand the credit card product, and banks and customers are protected ahead of merchants.

To help Internet merchant to protect themselves against fraud, new solutions have been introduced, such as Verified by Visa and MasterCard SPA, which authenticate parties in the transaction. Verified by Visa and MasterCard SPA are being marketed to online merchants by Internet payment gateways and acquirers.

There will probably never be an "ultimate weapon" against fraud: this is a war with no end. With all the software and hardware solutions that been introduced, we are only a few steps ahead of the bad guys, because systems are designed by humans and there is always someone who can figure out how it works and how to take advantage of it.

In payment networks, the merchant has always been less protected than banks and customers when a fraud takes place. The merchant will pay a chargeback fee, on top of the interchange fee, and will lose the merchandise if the percentage of chargeback is more than 2%-4% of the total transaction; the merchant is warned and may lose his right to process a specific card schema. To protect against fraud, the merchant acquirers build security services, which they sell to the merchants, and the merchants have to pay an additional fee per transaction.

But there is hope for the merchants with a new development that promises to protect banks, merchants, and consumers against fraud, and give merchants some peace of mind. Person-to-business (P2B) is a direct debit service that utilizes a bank's Internet banking system to allow a customer to make a purchase at an online merchant. With P2B direct debit services, funds do not leave the banking system; instead, they are settled through the bank's traditional clearing systems.

How It Works
When a consumer makes a purchase at an online merchant's website, the consumer is give an option to pay with P2B at checkout. By selecting P2B the customer is given the option of selecting the bank of the account to be used for the purchase. The customer logs onto the Internet and is presented with a receipt of the purchase: when he or she accepts the purchase, the transaction is completed.

In the background, the banking system debits the customer's accounts and moves the money to a suspense account. The merchant receives a confirmation of the purchase and the payment via e-mail. The merchant requires that the customer have an Internet banking account in order to be able to accept the payment. To receive the payment, the merchant employee responsible for payments clicks the link in the email, and is taken to the merchant Internet bank login page.

The employee logs in, and is presented with the payment request. The funds are accepted, and they move from the customer's suspense account to the merchant's suspense account. The merchant has immediate access to the funds, and at the end of the day the funds are cleared through the traditional banking system.

For brick-and-mortar merchants, the same system can be used with minimal upgrades to their systems By utilizing mobile devices fitted with bluetooth or rfid, purchases can be made at any physical location which accepts this payment method.

For the P2B payment service to be widely accepted, banks, merchants, and mobile operators need to participate in an open network which offers payment services for all participants. With the savings from collaborating on the P2B payment services, banks, merchants, and mobile operators can focus on the real value of their business and not worry about how they going to manage payments.