In general, PSO requirements include the requirements of the operators of existing and future payment systems such as support for small amounts of money, wide penetration and acceptability of the system, increase revenues and payment volume, etc. The proposed hybrid payment system integrates the existing payment systems and for such an integrated system, we formulate the following requirements in addition to the original PSO requirements:
• minimal changes to their systems; • availability and performance; • scalability;
4.3.1 Minimal changes
PSOs require that the interconnection of their systems is performed such that they need to make minimal changes to their systems.
PSOs prefer that their systems will be interconnected just as they currently function, but if this is not possible, then they accept only minimal changes. These changes should be feasible and achievable for them. This is a hard requirement.
4.3.2 Availability and performance
PSOs require that the availability of the Payment Gateway is very close to 100%, and the performance of the hybrid payment system is comparable to the performance of existing payment systems.
PSOs require the very high availability from the PG because they have contracts with users that want to use the payment system continuously. The PG is the key element in this payment system and its availability determines the availability of our payment system.
PSOs also want to make sure that the overall performance of the hybrid payment system is very high, so it can be really called a hybrid micropayment system, just like the systems they operate. The hybrid payment system must be able to perform millions of payments per day, and the PG must not create a bottleneck in the system.
We consider these requirements less important for the design cycle presented in this thesis.
4.3.3 Scalability
PSOs require a scalable hybrid payment system.
This requirement highlights the fact that the components of the hybrid payment system, i.e., the existing payment systems and the PG must scale if the number of users and the volume of hybrid payments increases. PSOs require this
PAYMENT SYSTEM OPERATORREQUIREMENTS
because they have contracts with customers and/or merchants, which need to be fulfilled even if their systems became part of the hybrid payment system. PSOs built their systems such that these systems will scale if the payment volume of their current customer and merchant base increases up to a certain limit [23]. We expect, however, that the hybrid payment system will put an additional load on current systems because it will have a very large and increas- ing customer and merchant base. This expectation is realistic because we aim at the global acceptability and high penetration of our payment system. Accept- ability is measured by the number of merchants that accept the payments of this system. Penetration is measured by the number of customers that pay using this system. The acceptability and penetration levels of this system show higher rates than those of any individual payment system. This is because our system inherited the end-user base of each individual payment system. New merchants are attracted because there is a significant customer base that will pay them, and vice versa new customers are attracted due to the large merchant base that will provide them products. The idea to expand the user base is shown in Figure 4.2 and can also be found in Metcalfe’s Law. This law states that the value of a communications network is proportional to the square of the size of the network. If we consider our payment system, we can declare that the value of this system is proportional with the square of the size of the user base. Odlyzko, however, claims that this proportion is overestimated and suggests that the value of system of user base n grows like is nlog(n) [24].
Scalability is a hard requirement.
Figure 4.2 Relation between the customer and merchant bases
Merchant Customer
Large merchant base
Large customer base motivation
participation
participation
motivation
4.3.4 Trust
PSOs must trust each other and the operators of the PG in order to participate in the operation of the payment system.
In our payment system, trust has several aspects as described in Sections 4.1.5 and 4.2.4. However, PSOs can only provide trusted payment systems to their end-users, if they trust the operators of the other payment systems and of the PG.
The organizations involved in this payment system should address the issue of trust between each other. One possibility is to include it in their business agree- ments, which are required to assure interoperability between them. However, if each PSO needs to sign an agreement with all other PSOs to ensure trust between them, then they may run into scalability problems. Suppose that there are n PSOs (n > 1), then n x (n-1) agreements are needed. In case n > 100, the establishment of these agreements will be difficult to achieve.
Similarly to the previous trust requirements, trust is not a hard requirement for this design cycle.