CHAPTER 6
Billing and Payment Systems
LEARNING OBJECTIVES
When you complete this chapter you should be able to:
1. Describe the characteristics of payment systems that have been used on the internet.
2. Describe how billing and payment techniques relate to corporate strategy.
3. Identify and describe the emerging electronic bill presentment and payment systems.
4. Describe the advantages and disadvantages of these systems.
5. Evaluate the suitability of billing and payment methods for various ebusiness scenarios.
6. Discuss the trends most likely to prevail in the future.
KEY TERMS
near-field communication (NFC) (p. 129) radio frequency identification (RFID) (p. 128)
Secure Electronic Transaction (SET) protocol (p. 121) SSL/HTTPS protocols (p. 121) value-added network (VAN) (p. 115)
TEACHING OVERVIEW
Billing and Payment Systems is an informative chapter that links the security concept with issues around technological integration as well as business models and strategy. It is important to stress that electronic payment systems really are the issue upon which ebusiness succeeds or fails. Without business and consumer confidence in secured, trustworthy, and private payments systems, there is no web-based commerce.
At present, no one form of payment system is optimal or universal, but credit cards continue to be prominent because they meet many important criteria for electronic payment. Card enhancements like build in security chips are great for in-person purchases, but do little for on-line purchases. Encryption techniques continue to be strengthened, and financial institutions offer Verified by Visa and its MasterCard and American Express counterparts as ways to combat on-line fraud, and to help allay consumer fears over on-line credit card purchases.
The theft of credit card numbers is often raised as an important issue in the development of ecommerce payment systems, and students are aware of the concerns. However, credit card companies have made many changes that improve the usefulness of credit cards for
Copyright © 2013 Pearson Canada Inc. 1
online payments. For example, cardholders of many credit cards have little or no liability for fraudulent charges on their cards, and many cards offer guarantees of receiving what was paid for.
Still, other methods of on-line payments, including Ebay’s Paypal, FSTC’s eCheck, reloadable debit cards like Apple’s iTunes card, and mobile payment systems are discussed in detail in the text. These methods represent alternatives to credit cards, and really are payment system created in response to an electronic market.
The class can discuss or explore other payment types that have been tried, such as Mondex, and others that have failed. Thinking of why these payment forms are no longer around can give insight into what requirements need to be met for success. Some of the billing and payment systems offered by such organizations as Canada Post’s ePost can also be considered from a strategic and operational perspective. We always emphasize the importance of the bank payments systems, through the internet banking facilities, which are growing in importance. Such systems can be used as an example, using the demos on the sites, such as those on the Royal Bank and CIBC websites.
MEDIA GUIDE
Internet Exercises
The Internet exercises and answers are also available in the Companion Website at www.pearsoncanada.ca/trites.
1. Credit Cards
Credit cards are one of the most popular methods of payment on the internet. Visa has implemented a credit card service that is specifically designed for use on the internet. Go to www.visa.ca and search for Verified by VISA. Review the features of this option that is specifically designed for internet-based purchases.
Questions:
1. How does Verified by VISA differ from other payment processes?
Customers create a password to use with their credit card number when making an online purchase.
The merchant’s online sales-system design integrates the Visa payment procedure so that the customer is connected directly with their Visa provider, where payment takes place. The merchant receives confirmation of payment processing but does not collect or view the data (some simpler systems allow the vendor to collect this data). From a fraud or charge-back perspective, the vendor has greater assurance that the customer who is purchasing is the authorized user of the credit card. Online transactions are referred to as card-not-present transactions and these, historically, have had greater fraud risk.
As credit cards have incorporated smart card (chip) technologies, the payment procedure for face-to-face sales is evolving to be similar to the online system. Customers now enter a numeric code into a payment device rather than manually signing a sales slip.
2. Stored Value Cards
The Mondex card is unlike any other card when used on the internet for online purchases. Visit the Mondex site at www.mondex.com and find out what their key difference is. Here’s a clue: Europeans are much more concerned about it than North Americans.
3. Electronic Bill Presentment and Payment
All the big banks in Canada have enabled customers to accept and pay their bills electronically, and Canada Post (www.epost.ca) has done the same. Visit the epost site and compare epost with the services offered by banks.
4. Mobile Payments
An interesting use of new technologies arises when a business wishes to have its employees accept payments from customers when they are in the field. Mobile credit card processing is undergoing an update and can involve the use of smartphones. Read more about this at www.merchantseek.com under “Informative Articles.” A good example is “Mobile credit card processing: The Swipe of the Future.” Note the setup requirements identified in the article.
This short article is a good summary of the organizational structures that must be in place to begin accepting credit card payments:
1. Registration of the business
2. A merchant account or outsourced equivalent
3. Payment gateway
After these steps, the decision becomes how to capture the point-of-sale data. Businesses have moved from paper-based systems to card readers, and now, to the use of smartphones.
Weblinks
Safaricom Kenya www.safaricom.co.ke
Mondex www.mondex.com
PayPal www.paypal.com
Fair Isaac www.fico.com
Speedpass www.speedpass.com
PayPass www.paypass.com
Canada Post’s epost www.epost.ca
Acxsys Corporation www.acxsys.ca
SUGGESTED SOLUTIONS
IN-CHAPTER BOXES
Ebusiness in Global Perspective— M-Pesa
1. What potential is there for further development of M-Pesa in the future?
- There should be great potential. Africa is developing quickly and it seems clear that the M-Pesa has so far only scratched the surface. As the system develops and is able to reach into more areas, and as the international transfers become more known, and perhaps linked with transfer mechanizms such as Interac used in the Western world, M-Pesa should have a bright future.
2. What other cash transactions could M-PESA be used for?
- It could be used for a variety of transfers in business and in the not for profit world. Banks are scarce in many areas of Africa, and land transportation difficult, Yet cash needs to be stored and moved about. For example, churches receive cash from their people and then need to transport it to banks. This is often done by keeping the money in safes and transported when possible. M-Pesa could be used to transfer these funds to a central safer location.
- Also many businesses need to pay their suppliers and M-Pesa would be a good way to do that.
- Banks could use it to transfer funds to and from more remote areas where their services are limited.
- The potential uses of M-Pesa are almost limitless.
New Business Models—Transferring Cash with Visa
1. Is this new service likely to be more successful than previous attempts to develop online payment systems?
It has a lot of potential. Visa is already backed by a number of banks and is extremely widely used.
It isn’t really a payment service though, Rather it is a money transfer service, and so it wouldn’t substitute for an online payment service.
It could supplement any online payments though, since it enhances the purchasing power of the Visa credit cards.
The mobility aspect is a great feature. Being on the move, and being able to accept money into your credit card would be very helpful, convenient and practical.
Copyright © 2013 Pearson Canada Inc. 1
2. Who would be interested in buying this service?
Travellers would find this service of tremendous help when travelling away from home and running short on cash. The service would enable them to refresh their credit cards through the internet without exposing their bank accounts to hacking. Many travelers are reluctant to use the internet for banking when travelling, and this service would reduce the risk. ATMs are often used by travelers, but they don’t offer much flexibility in service for travelers.
Shoppers, students away from home, and people away from home and depending on their credit cards would find this service useful
Estrategy— Layered Security for Credit Cards
1. How effective do you think Verified by Visa and CVV2 are in preventing fraud? What more can be done?"
- The addition of additional security layers undoubtedly adds protection simply bceaue it make use of the credit card more difficult. Thieves need to obtain more information
- The next logical step would be to make use of biometrics. This could include fingerprint scans and retina scans. This could be done online as most computers and smart phones can accommodate scanners that could be used to transmit to the destination.
2. View the webcast at http://www.visa.ca/en/merchant/VbVwebcast2009/index.html. Do you think the idea of layered security is heading in the right direction, as a response to credit card fraud? Why?
- Yes, it would seem to be a logical step. It makes the security more rigorous. Also, it enables more customized security with the additional passwords.
- It will not eliminate fraud, but will make it a lot more difficult for the perpetrators.
- The issue with them is that it also adds steps for the legitimate user, which adds inconvenience. It would be good to devise a method which is not more inconvenient.
- A method that does not use passwords at all, such as biometrics might meet this approach.
- Also, unique password developers that set passwords every minute or so can be effective.
Canadian Snapshots – Telpay Inc
1. What other services could TelPay to utilize current technology?
- It could expand its payment service to a variety of mobile platforms which it doesn’t likely offer now because mobility is expanding so fast.
- It could expand into systems oriented solutions
- It could move into the cloud
2. How do you think TelPay has changed since its founding in 1985?
- It would have changed along with technology. And technology has changed radically since then.
- The last 25 years have seen the introduction of the internet, So telpay would have moved into internet usage.
- Tech has gone from large centralized systems to client server systems and beyond. Telpay would have had to track all those changes.
REVIEW QUESTIONS
The Review questions and answers are also available in the Companion Website at www.pearsoncanada.ca/trites.
1. What are the main characteristics of traditional cash? Why did the ecash online payment systems fail?
Characteristics of cash:
portability
acceptability
anonymity
instant transfer of value
Ecash was an encrypted, anonymous electronic cash payment system that used blind signatures so that, as with physical cash payments, no record of the purchaser could be tracked. Ecash met the last two characteristics of cash—anonymity and instant transfer of value—but failed in portability and acceptability.
2. What is RFID technology and how can it be used for payments?
RFID stands for Radio Frequency Identification. We’ve all seen it in retail—in clothing stores where the buzzer goes off when we leave because the tag hasn’t been removed, or hidden in books at bookstores, or glued to DVD covers. Walmart was one of the first vendors to demand RFID compliance from its suppliers. Now RFID is branching its way into several payment systems. The system works by holding an RFID payment card close to a reader, which then “reads out” the information stored on the card. The distance necessary between the card and the reader varies. Some systems (for example, highway toll collection systems) are designed to read out payment cards in a moving vehicle. Other systems, like Imperial Oil’s SpeedPass key tag, require a distance of no more than a few inches. The future of RFID payment technologies lies in its link to mobile payment systems. As businesses are working to develop combined, secure large and micropayment systems, mobile devices (cellphones) are the platform with the greatest promise. They offer the closest match yet to the above four characteristics of cash.
3. The dominant payment systems on the internet are still traditional systems such as credit cards. Explain why so many of the new and often innovative internet-based systems have failed.
New internet-based payment systems fail for many reasons. The main reason is that none of them ever achieved a critical mass, either in the number of merchants accepting the system or in the number of internet surfers using the system. Often this was due to the added expense a merchant must incur to offer the alternative systems, but another reason was a lack of trust by the consumer. When a consumer has been making purchases safely by credit card for years, why should she change? What benefit does she receive, especially when credit card companies offer redeemable point systems to their customers for continued use?
Small start-up companies that could not offer a level of trust and a sense of security comparable to banks started many of the early payment systems on the internet. Users were simply too afraid to entrust the systems with their money. The lack of interoperability between systems also hurt internet payment systems. Since most online merchants are unwilling to support a large number of online payment systems, they often accept the “common denominator”: traditional credit cards.
4. What are the main advantages of the PayPal system?
Advantages:
PayPal has reached a critical mass of users and participating merchants.
The system enjoys the trust of its users and is backed by a reputable company (eBay).
Users can use PayPal to transfer funds to other users of the system.
Payments can be sent to non-members.
The system is global and supports multiple currencies.
Where earlier currency exchange companies like e-Gold failed, PayPal has succeeded and is endorsed worldwide. PayPal knows who its customers are.
5. What role does the Financial Services Technology Consortium (FSTC) play in payment systems?
The Financial Services Technology Consortium (FSTC) is a powerful organization that comprises several banks and other key financial technology players. By having these influential backers, the FSTC has gained substantial influence in the development of new payment systems and related standards. The role of the FSTC is to initiate projects that are then funded and supported by its members. Affiliate organizations in the electronic business world include Microsoft, PayPal, Intuit, and VeriSign, and member companies such as Visa, MasterCard Worldwide, and Citigroup Inc.
6. How can 900 numbers be used to process online payments? What are the disadvantages of using such a system?
900 numbers can be used to process online payments through the use of a 900 dialler or by prompting the user to manually call a 900 telephone number to add a charge to the telephone bill. 900 numbers have often been abused for fraud, especially through 900 diallers that are installed without the user’s consent. It should therefore be no surprise that 900 numbers have a very poor reputation as a means of processing online payments, and for this reason are rarely used today.
7. What are m-payments?
M-payment (or mobile payment) systems use mobile devices to process payments. Personal Digital Assistants (PDA) and mobile telephones are very attractive as payment
Copyright © 2013 Pearson Canada Inc.
alternatives since most people already have one or both of these devices and carry them most of the time. M-payments can take various forms, with the most prevalent being mobile phones that connect to a central payment clearing system to transfer funds. Mpayment systems are still in their infancy. Which technology will become the predominant system remains to be seen. RFID (radio frequency identification) technology can also be considered to be an m-payment technology. With RFID, the payment information is “read out” of an RFID device through a wireless connection. Mall based retailers are experimenting with “push” systems that can detect the GPS presence of a mobile phone and push money saving coupons to near vicinity clients. Although not a payment system, it is an enticement to pull users into stores to make immediate purchases.
8. Explain the Verified by VISA system. What are its advantages and disadvantages?
The Verified by VISA system adds an additional layer of security to online payments by adding financial institution verification to form a three-tiered client–financial institution–merchant exchange. Users of the system register an online password with Visa. When making an online purchase, the system prompts them for the password and sends the password directly to Visa, not the merchant. This additional tier makes it harder for cyber criminals to use stolen credit card numbers and their expiry date. The system also prevents fraudulent merchants from abusing credit card information, as every transaction must be directly confirmed with Visa.
Advantages:
An additional layer of protection is added.
Protection against fraudulent merchants is increased.
A credit card number that is stolen in the bricks-and-mortar world cannot be used in the online world.
Disadvantages:
Not all online merchants use the system; the information can still be used with merchants that do not participate in the system.
The system can only be used for online payments.
The system still does not check if the physical card is present. Knowledge of the card number, the expiry date, and the password is enough to make a fraudulent purchase.
9. What role does public/private key cryptography play in payment systems?
The main role of public/private key cryptography or encryption is the security of internet connections, which carry payment and transaction information. Key cryptography also can be used as non-repudiation in the event of disputed purchases. This is necessary to ensure the validity and finality of a transaction.
Copyright © 2013 Pearson Canada
10. How are ATM/debit cards used in web-based payment systems?
Customers of financial institutions can use their debit card to log into the website of the institution in their banking system and examine their bank accounts, transfer funds, and pay bills. Generally, the system works by having the customer identify the bills to be paid over the internet. If the billing organization is a participant, the payments can be made online, and the financial institution will forward the payment to the payee to the credit of the individual making the payment. This system of paying bills has become extremely popular, both directly through the hosting bank or financial institution, and through third party payment aggregators like Canada Post’s ePost.
PROBLEMS
Outline of chapter problems:
Problem Number Topic Companies
1 Financial institutions/B2B payment
2 Electronic procurement solutions Edy Japan
3 Person-to-person payments Citigroup/C2it
4 Online bill payment Saks
5 Security breaches, credit cards First Virginia Banks
6 Outsourcing payment services CheckFree
SHORT DISCUSSION QUESTIONS
As an alternative to the longer, more involved Discussion Problems below, we have made available Short Discussion Questions in the Companion Website (www.pearsoncanada.ca/trites). These questions can be used for self-study or in class to facilitate classroom discussion.
PROBLEMS FOR DISCUSSION
The problems (without answers) are also available in the Companion Website at www.pearsoncanada.ca/trites.
Problem 1
A report by a research firm found that many financial institutions still provide inadequate internet-based B2B payment-processing capabilities to their business customers and suppliers. At present, some businesses still use EDI to process payments and other transactions (purchase orders, customer orders, receivables, etc.), which is a costly and inefficient method—but one which has been entrenched in certain industries for decades.
One of the purposes of technology is to reduce costs, and payment processing is a prime area for such cost-cutting activity. However, shifting from EDI to web-based payments is Copyright © 2013 Pearson Canada Inc.
one of the most difficult elements of automation and many businesses have been putting it off. Many organizations made large initial investments in EDI and have since experienced little difficulty with EDI payments. The system paid for itself years ago, so there must be a compelling reason (cost savings, market share, customer service, etc.) to switch.
There is much to gain from moving EDI-based payments to the internet. For the companies adopting it for the first time, there is the chance to process payments fast without high IT infrastructure costs. For the financial institutions, an internet-based EDI service should increase the financial institution’s involvement in the procurement process and inspire higher transaction volumes along with an increase in fee-based revenues. Moreover, B2B payments can help everyone get a clearer picture of the receivables, thereby allowing better credit decisions.
Internet-based B2B payments would be a logical next step for financial institutions that want to support ebusiness. They already have a payment-related relationship with many clients, but if they don’t make the investment in web technologies soon, they could lose those clients to an internet-literate competitor. Software vendors such as HighJump, Web Edi, and Covalentworks all offer web-based EDI solutions for business.
Questions:
a. Discuss the infrastructure changes that would be required to move EDI payment systems to the internet.
Several changes in infrastructure are required. First, companies have to change the existing interfaces between their internal systems and EDI to web interfaces. There are also additional requirements for security. Since most EDI transactions were handled through value-added networks (VANs), security was less of a concern. But with the public internet, security measures such as firewalls, encryption, and virtual private networks (VPNs) must be taken to ensure the integrity and confidentiality of the data.
Major issues:
The role of banks in the process will increase.
Using the internet poses additional security concerns that need to be addressed.
It is not enough for a company to simply switch to web-based payments. The company’s customers, suppliers, and banks must also be included in the process.
Existing information systems must be changed to accommodate web-based payments.
b. What are the major issues of such a move? What are the advantages and disadvantages of moving EDI to the internet?
Advantages:
lower costs
wider reach in operations
no dependency on VAN providers
Disadvantages:
implementation can be a challenge
security concerns
once banks dominate the web-based payments market, they may use their position to command higher fees
c. Where does XML fit into the EDI picture?
XML (eXtensible Markup Language) is a web-based scripting language and file format that defines data elements with user defined tags. A customer could agree on tag names with its suppliers, and use XML and the internet, transfer data between systems without an EDI requirement. Where EDI uses predefined file formats such as X12 and UN/EDIFACT, XML does not. For this reason an EDI transmission may be shorter in length because it is less verbose and design to be machine readable, as opposed to an XML format where data is more user defined. Many EDI vendors propose that EDI and XML co-exist, but some believe XML represents a newer format for B2B exchanges, whereas EDI is more of a system for B2B exchange.
Problem 2
Launched in 2004, Edy (Euro Dollar Yen) is a prepaid rechargeable contactless smart card in Japan, based on Sony’s wireless smart card technology. Currently, Edy only works with yen, but major Japanese cellphone carriers (DOCOMO, Softbank) provide their customers phones that can be used like an Edy card for purchases and for recharging Edy accounts.
As of 2010, Edy was accepted in more than 200 000 stores, including 7-Eleven, McDonald’s Japan, and FamilyMart.
Edy is an ecash system which is used as an add-on to credit cards. Partnerships with restaurants, convenience stores and other merchants have strengthened Edy’s position as an ecash payment system in Japan.
A benefit to Edy is its ability to handle both online and offline payments. Digital cash can be stored in the phone itself, so that if a customer cannot get a wireless carrier connection, purchases can still be made with the stored cash. In this way, Edy’s ecash payment systems are a part of DOCOMO’s wallet phone concept.
Edy is operated by bitWallet Inc., a consortium of banks, telecommunications companies, and technology vendors.
Questions:
a. Discuss the major advantages and disadvantages of the Edy ecash system.
Advantages:
No new device is required; most people already have a cellphone.
The system can be used to pay for purchases at nationwide vendors.
The system can be used for both online and offline wireless transactions.
Disadvantages:
The only supported currency is the yen.
Edy is not (yet) available for global transactions with different currencies.
b. Do you think the Edy system could become competition for credit card companies?
The system can also be used for offline transactions such as purchases in a store. A customer would simply use the ecash wallet stored on his or her mobile telephone to pay for the purchase. No credit card is necessary to complete the purchase since the user is effectively paying with cash. In this sense, it could compete with credit card companies, but Japanese shoppers tend to pay cash for everyday purchases anyway, unlike their North American counterparts.
c. What are the advantages of the online payments option for customers as well as merchants?
Advantages for merchants:
The payment can be processed immediately.
Assuming that the user of the phone is also the owner, the service can be used to authenticate users.
Advantages for users:
No sensitive information is sent over the internet.
It is a cashless system that can be used only up to the maximum amount charged to the Edy card system.
Problem 3
The Bank of Montreal offers a service for ebusinesses, called Procure2Pay, that is run by the bank’s electronic banking services division. Procure2Pay is a web-based service that Copyright © 2013 Pearson Canada Inc.
allows orders and payments to be processed online, reconciled, and integrated into a customer’s enterprise resource planning (ERP) system.
Procure2Pay gives BMO’s clients a way to connect a catalogue of items that they purchase from a variety of vendors to a payment system. With the system, companies are able to eliminate paper ordering, to electronically settle payments, and to assume greater control over the list of approved vendors. In addition, BMO promotes it as being easier to use because companies can get correct prices on specific items using a standard interface. The common interface offers a significant advantage over each supplier operating their own procurement and payment system.
Before Procure2Pay was available, each customer had to use a paper-based purchasing manual for the ordering process. When the bank introduced Procure2Pay, customers no longer needed to worry about such piles of paper. Companies gained better control over their vendors and were able to link Procure2Pay data directly into their finance systems. The Procure2Pay system integrates with ERP applications such as PeopleSoft, SAP, and Commerce One. BMO has a special unit to help customers implement the linkage.
Companies typically customize their general ledger applications, and when a company develops an EDI file, it isn’t standardized to anything else. The challenge for BMO’s integration unit is to send files to different leasing, finance, and banking companies, while linking with the bank’s own payment-clearing system. In addition, the bank says that under the new system, suppliers that have traditionally waited 30 days for payment can now be paid for orders as soon as they are shipped.
As of 2011, BMO has extended their B2B procurement offerings with the announcement of BMO FlexPort. This new platform enables buyers and suppliers to electronically process purchase orders and then settle payments in the formats of their choice, while fitting seamlessly with enterprise resource planning (ERP) systems. BMO FlexPort combines electronic purchase and payment instructions such as order delivery, acknowledgement and shipping notification, multiple payment methods, and advanced reporting.
FlexPort complements BMO ePurchasing’s suite of web-based components, which includes Procure2Pay. With FlexPort, users can now take advantage of another BMO web-based component delivered from a single end-to-end procurement source. This helps achieve an automated and integrated corporate purchasing environment.
Questions:
a. What are the advantages of having a bank payment system that integrates with an ERP system?
There is no need for double data entry into the bank payment system and into the ERP system.
ERP systems are so powerful because they provide up-to-date information. By integrating an ERP system with a bank payment system, the ERP system will be even more useful and current.
The integration of the system allows a company to (eventually) make all of its payments electronically. This substantially reduces the effort required and the cost associated with processing payments the old-fashioned way.
By processing payments electronically through the ERP system, there may be the opportunity to reduce working capital, since payments can be made just in time.
b. What challenges would be expected in implementing such a system?
There are many challenges associated with implementing such a system. ERP systems are very complex and it is quite difficult to interface with them. Since there are many parties involved in such a system (banks, customers, suppliers), everyone needs to be on the same page and compatibility must be ensured. There are also non-technical challenges. The new system allows companies to pay for purchases as soon as they are received. This may not be such an attractive feature after all, since many companies consider the time between the receipt of a good and the payment as an interest-free loan. Another issue is whether companies are willing to join the Bank of Montreal system, which is not an open system. A supplier that deals with a different bank might not be willing to join the Bank of Montreal system.
c. What real-world problems does BMO FlexPort actually solve?
The Walmart supply chain is famous for its success. But that success comes with enforcing format standards on all its suppliers. The conversion to different formats for different customers can be costly and time consuming for suppliers, but it limits their ability to properly service their customers. FlexPort acts as a gateway that translates file formats, allowing both buyers and sellers to use their preferred format. The suppliers concentrate on filling the orders rather than on how they are going to customize their data for the buyers.
Problem 4
In 2001, First Virginia Banks Inc. (now a part of BB&T) had to notify 500 of its customers that files containing their card numbers and expiration dates, phone numbers, and addresses had been compromised by a hacker attack. Several other banks in the area had to do the same thing with their customers. Riggs Bank of Washington, D.C., had to send letters to 3000 of their customers informing them that a local online merchant’s customer database containing their Visa debit card numbers had been hacked and compromised.
All of the customers had made purchases from an online merchant in the Washington area. It was not clear whether the data was taken directly from the merchant’s system or from one of the many companies that process electronic payments between online
Another random document with no related content on Scribd:
If the second copy is also defective, you may demand a refund in writing without further opportunities to fix the problem.
1.F.4. Except for the limited right of replacement or refund set forth in paragraph 1.F.3, this work is provided to you ‘AS-IS’, WITH NO OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.
1.F.5. Some states do not allow disclaimers of certain implied warranties or the exclusion or limitation of certain types of damages. If any disclaimer or limitation set forth in this agreement violates the law of the state applicable to this agreement, the agreement shall be interpreted to make the maximum disclaimer or limitation permitted by the applicable state law. The invalidity or unenforceability of any provision of this agreement shall not void the remaining provisions.
1.F.6. INDEMNITY - You agree to indemnify and hold the Foundation, the trademark owner, any agent or employee of the Foundation, anyone providing copies of Project Gutenberg™ electronic works in accordance with this agreement, and any volunteers associated with the production, promotion and distribution of Project Gutenberg™ electronic works, harmless from all liability, costs and expenses, including legal fees, that arise directly or indirectly from any of the following which you do or cause to occur: (a) distribution of this or any Project Gutenberg™ work, (b) alteration, modification, or additions or deletions to any Project Gutenberg™ work, and (c) any Defect you cause.
Section 2. Information about the Mission of
Project Gutenberg™ is synonymous with the free distribution of electronic works in formats readable by the widest variety of computers including obsolete, old, middle-aged and new computers. It exists because of the efforts of hundreds of volunteers and donations from people in all walks of life.
Volunteers and financial support to provide volunteers with the assistance they need are critical to reaching Project Gutenberg™’s goals and ensuring that the Project Gutenberg™ collection will remain freely available for generations to come. In 2001, the Project Gutenberg Literary Archive Foundation was created to provide a secure and permanent future for Project Gutenberg™ and future generations. To learn more about the Project Gutenberg Literary Archive Foundation and how your efforts and donations can help, see Sections 3 and 4 and the Foundation information page at www.gutenberg.org.
Section 3. Information about the Project
