Fraud-free payment for internet purchases

In a system for conducting secure e-commerce including a customer computer, a merchant computer or merchant website, a customer's bank's computer or a customer's bank's website, and a pay code payment gateway system, which are connected to each other by one or more communication channels for sending transaction instruction and receiving a payment authorization instruction for a transaction, the method comprising:

• buying via on-line banking, telephone banking or automated teller machine from a client system that interacts with the pay code payment gateway system, a pay code having a customer selected payment value, and wherein the pay code is used by the customer for making purchases over the internet and wherein the pay code is reloadable;
• establishing communication between a customer's computer and a merchant computer or merchant website via one or more communication channels;
• receiving products and services data from the merchant's computer or web site at the customer's computer;
• selecting products or services to purchase by the customer and sending transaction data to the merchant's computer or merchant website for processing;
• processing the customer's transaction data at the merchant's computer or website and sending the customer's transaction data and merchant data to the pay code payment gateway system for authorization of payment;
• processing the customer and merchant transaction data at the pay code payment gateway system and the pay code payment gateway system requesting that the customer enter a secret password and a pay code at the pay code payment gateway system;
• entering of the secret password and the pay code in the secure payment gateway system by the customer;
• sending of the secret password and the pay code by the pay code payment gateway system to the customer's bank to seek verification and authorization for payment;
• checking and verifying the secret password and the pay code by the customer's bank and sending status of whether the transaction is approved or not approved by the customer's bank computer system;
• wherein the sending of transaction status is sent to the customer by the pay code payment gateway system;
• and
• sending from the pay code payment gateway system, payment approval to the merchant and the merchant ships the goods or services to the customer in response to the approval.