Transcript
Electronic Payment SystemElectronic Payment System
~Objectives~About E-Payment SystemsAdvantages E-CashE-Cheque Payment SystemE-WalletModes of E-Payment SystemCredit Card Payment SystemDebit Card Payment SystemElectronic Clearing System
E-Payment SystemsFinancial Exchange that takes place between buyers and sellers in the form of some digital financial instrument that is backed by a bank or an intermediary or by a legal tender.
Factors To Use This System:
Decreasing Technology Cost
Reduced Operational & Processing Cost
Increasing Online Commerce
ComparisonProblems with
Traditional Payment Systems
Advantages Of E-Payment Systems
» Lack of convenience » Lack of security» Lack of coverage» Lack of Eligibility» Lack of Support for
micro-transactions
» Increased Sales» Decreased Costs
Conceptual View
Issuers Customers Merchants or Traders Regulators
E-CashFounded in 1995, e-Cash is a computer generated internet based system which allows funds to be transferred and items to be purchased by online payment.
Transaction Stages
Account Setup Purchase Authentication
E-Cash Payment System Model
The E-Cheque System
A form of payment made via the internet that is designed to perform the same function as a conventional paper cheque .
Because the cheque is in electronic format , it can be processed in a fewer steps and has more security features like:i. Authentication ii. Public-Key Cryptographyiii. Digital Signatures iv. Encryption etc.than a conventional paper cheque.
Benefits :No physical movement of
cheques , hence no loss of cheque.
Quicker clearance.Decreased errors and
frauds.Serve corporate markets –
Firms can use them in more cost effective manner.
Reduce processing costs up to 60%.
Drawbacks :• The problems come when
your merchants does not accept e-cheques.
• When there can be more than 1 signer or endorser.
E-CHEQUE PAYMENT SYSTEM
E-WALLET
Any device or software that allows the user to store money , personal information & other data associated for an online transaction.
Features
All ID information in 1 location. Current balance can be stored and read. Universal access. Cannot be duplicated. Firewall encrypted security logic. No separate card reader is required to
access e-Wallet.
Modes of E-Payment Systems
Modes of E-
Payment Systems
ECS
Debit Cards
Credit Cards
Credit CardsEssentially a credit card allows you to:
Purchase products or services whenever or wherever you want , without cash , and paying them at a later date.
Have an option of paying only a part of total expenses. The balance amount can be carried forward , with an interest charged.
Enjoying a credit limit without any charges for a limited period (mostly 20 to 50 days).
A credit card is a small plastic card issued to users as a system of payment.It allows its holders to buy goods & services based on the holder’s promise to pay for these goods & services.
Sequence of steps for secure transaction :
1. Customer presents card to the merchants.2. Merchant validates customer’s identity as the owner
of the card.3. Merchant relays credit card charge & signature to its
bank.4. Bank relays this information to customer’s bank for
authorization approval.5. Customer’s bank returns authentication &
authorization to the merchant.
Debit Cards
Debit cards are plastic cards, which look like credit cards but are electronically connected to a card holder’s depository institution account. Money is automatically withdrawn from the designated account when a purchase is made . Debit cards can be used when there is not enough money in the account , which will result in a non- sufficient fund fee.
Electronic Clearing Systems Refers to the Electronic Fund Transfer mode
from 1 bank account to another to using the services of a clearing house.
Used for bulk transfers – i) Making payments like: distribution of dividend, interest, salary, pension ii) Payments to Utility Companies :
telephone, electricity, loan instalments etc.
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