Jayati Jani 6905

Priyanka Singh 6906

Hitesh Shah 6907
Dhawni Shah 6910
Taught By
Reshma Mam
The term 'electronic payment' is a collective phrase for
the many different kinds of electronic payment
methods available (also meaning online payment), and
the processing of transactions and their application
within online merchants and ecommerce websites.
E-Payment System (EPS)
How It works
Ease of Automated Processing:
Immediacy of result
Openness and accessibility
Loss of collateral information
Globalization
New business models
Special Features required in EPS
I-Banking
Credit Cards & Debit Cards
Electronic Check (i-check)
Micro payment
Smart Cards
E-Cash
Types Of EPS
A system that allows a person to pay
for goods or services by transmitting a
number from one computer to another.
Like the serial numbers on real
currency notes, the E-cash numbers
are unique.
This is issued by a bank and represents
a specified sum of real money.
It is anonymous and reusable.
E-Cash
Complex cryptographic algorithms
prevent double spending
Anonymity is preserved unless
double spending is attempted
Serial numbers can allow tracing to
prevent money laundering
3
4
2
1
5
Bank
Consumer
Merchant
1. Consumer buys e-cash from Bank
2. Bank sends e-cash bits to
consumer (after charging that
amount plus fee)
3. Consumer sends e-cash to
merchant
4. Merchant checks with Bank that
e-cash is valid (check for forgery or
fraud)
5. Bank verifies that e-cash is valid
6. Parties complete transaction
How E-Cash Works
Currency Server can load currency exchange rate data in a
variety of data formats and transmission protocols,
supporting major official and free data feeds, as well as
commercial and subscription-based services. Automatic
updates of non-exchange rate data (such as currency
names and codes) are also supported, and are covered in
the Currency World Monitor.
E.G: Western Union Money Transfer.
(Used to transfer money from abroad)
Currency Server
Credit card
Used for the majority of Internet
purchases
Has a preset spending limit based on
the users credit history.
Currently most convenient method
Most expensive e-payment
mechanism
MasterCard: $0.29 + 2% of
transaction value
Advantage
Each month user can pay part or all of
the amount owed
Disadvantages
Does not work for small amount
(too expensive)
Does not work for large amount
(too expensive)
Credit & Debit Cards
Debit card
Used for the majority of general
purchases
Has no spending limit
Currently most convenient method
Most non-expensive e-payment
mechanism
Special feature helps to withdraw
from ATM as hard cash
Advantages
Operates like cash or a
personal check
Disadvantages
Money is immediately
deducted from users account
balance
The E-wallet is another payment scheme
that operates like a carrier of e-cash and
other information.
The aim is to give shoppers a single,
simple, and secure way of carrying
currency electronically.
Trust is the basis of the e-wallet as a
form of electronic payment.
Electronic Purses(E-Wallet)
Decide on an online site where you would
like to shop.
Download a wallet from the merchants
website.
Fill out personal information such as your
credit card number, name, address and
phone number, and where merchandise
should be shipped.
When you are ready to buy, click on the
wallet button, the buying process is fully
executed.
Procedure
The development of electronic purses has been driven by
commercial and technological organisations rather than by
demand from consumers.
The organisations operating electronic purse systems gain from
the use of the money stored on the cards. For banks, there are
advantages in reducing the handling of cash and cheques which
have to be transported securely and are labour intensive to
handle. Electronic purses are also seen as a means to protect the
bank and card holder relationship which is perceived to be
important in today's competitive environment.
For the retailer, the advantages are the reduction in handling of
currency and cheques. This includes reducing the delay in
money being credited to the retailer's bank account. Another
advantage is reducing the risk of theft.
Why use an electronic purse?
E Check is like writing a check,
only faster and more secure.
E-check is instruction to financial
institution to pay a given amount
of money to the payee.
It is specially formatted email
message sent over the internet.
It contains same information as
on paper based check.
Why should I use an e Check?
Smart Card
A smart card, is any pocket-sized
card with embedded integrated
circuits which can process data
This implies that it can receive
input which is processed and
delivered as an output
There are Two types
1. Memory
2. Micro-Processor Cards
Smart Card Processing
- Time Saving
- Privacy
- Integrity
- Compatibility
- Acceptability
- Convenience
- Mobility
- Low financial risk
Benefits
High Cost of Transaction.
Need third party Intermediate
Dependent on the Internet Connectivity
Dependent on Electricity
Fraudulent mails
Hackers involving in transactions
Depends completely on electricity
Produces electronic garbage
Business Issues and Implications
You need to register to the institution in order to be authorized to perform money transactions with them. This
involves a username and a password, which implies the need of password protection. You also need to maintain an
account per organization, which can make it bothersome for some of you.
For secure online transactions, the site that hosts your account should follow strict security policies. If the passwords
are susceptible to being hacked, it can mean a serious financial loss for you. Banks or financial institutes, which
maintain your personal information, cannot afford to expose it to hackers. There is a potential risk of your personal
and account details being stolen.
One of the most severe disadvantages of electronic payment systems is that of identity theft. It is important to carry
out money transactions over a secure server.
There is a great risk involves in the theft or the losing of the smart cards. the time between losing the card and
informing the authorities is critical. Unauthorized users may carry out transactions in your name during this period of
time.
Mostly, electronic cash is based on cryptographic systems. The transactions are encoded by means of numeric keys
while the transaction details travel across the net. Though electronic payments are resistant to forgery, the keys are
vulnerable to attack.
This was not to discourage you from taking to electronic payments. It was rather to make you aware of the
disadvantages of electronic payment systems. While we are moving towards a paperless environment, we are inviting
issues related to electronic security.
Legal risk of E-payment system
Use passwords which are at least of 8 characters, consisting
alpha-numeric and one special character.
Do not disclose passwords or PIN no. to anyone.
No easy to guess passwords.
Secure your PC(or wallet) with a good password (so no one else
can see or access your personal information.
Be smart and report immediately in case of loss of Card.
Change the password immediately in case of shared.
Have Reputed firewall and anti-virus at your home PC or Mobile
(please purchase it.)
Dont provide any personnel information via E-mails nor on
phones because its illegal to ask for it in this method.
Risk Management options for EPS
Thank You