ELECTRONIC PAYMENT SYSTEM

AMIT KUMAR NAYAK

Roll no:29401
Regd no:1005105001

PRESENTATION FLOW

Introduction.
Working principle.
Conventional vs. Electronic payment system
Requirements of Electronic payment system
Types of Electronic payment system
E-cash
E-wallet
E-check
Smart cards
Credit & debit cards
Protocol
Risk management option
Conclusion .
References.

INTRODUCTION
The term Electronic Payment is a financial exchange that
takes place online between buyers and sellers. The content of
this exchange is usually some form of digital financial
instrument (such as encrypted credit card numbers, electronic
cheques or digital cash) that is backed by a bank or an
intermediary, or by a legal tender.

WORKING PRINCIPLE

CONVENTIONAL VS. ELECTRONIC

PAYMENT SYSTEM
Conventional payment system Electronic Payment system

It requires a buyer's withdrawals

form his/her bank account.
A transfer of cash to the seller,
and the Sellers deposit of
payment to his/her account.
Non-cash payment mechanisms
are settled by adjusting

is developed based on an
electronic payment protocol
which supports a series of
payment transactions using
electronic tokens or coins issued
by a third party.
Electronic cash would increase
the vulnerability of the national
financial system

REQUIERMENTS OF ELECTRONIC
PAYMENT SYSTEM

Digital money
Security
Scalability
Efficient and effective
Simple and low cost
Ease of Automated Processing
Immediacy of result
Globalization
Non-repudiation

TYPES OF ELECTRONIC PAYMENT

SYSTEM

E-cash
E- wallets
E-cheques
Smart card
Credit & Debit cards

E-CASH
How E-Cash Works
How E-cash works?

These are Digital forms of value

storage and value exchange
that
MERCHA
have limited convertibilityNT
into
5
other forms
of value and require
intermediaries4 to convert.
BANK

3
1

1.

Consumer buys e-cash from Bank

2.

Bank sends e-cash bits to consumer

(aft
charging that amount plus fee)
3.

Consumer sends e-cash to merchant

4.

Merchant checks with Bank that e-cash is valid

5.

Bank verifies that e-cash is valid

6.

Parties complete transaction

2
CONSUM
ER

E-WALLET
Procedure
1.

The E-wallet is another

payment scheme that
operates like a carrier of ecash and other information.
likes credit card, owner
identification ,address and
etc..

2.
3.

4.

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.

E-CHECK
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.

State
ment

SMART CARDS

A card, is embedded with

integrated circuits
Which can receive input
process and delivered as an
output
There are Two types
Memory
Micro-Processor Cards

CREDIT & DEBIT CARDS

Credit card
Used for the majority of Internet
purchases
Has a preset spending limit based
on the users credit history.
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)

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

PROTOCOL
Secure Electronic
Transaction (SET) Protocol

Jointly designed by MasterCard and

Visa with backing of Microsoft,
Netscape, IBM, GTE, SAIC, and
others
Designed to provide security for
card payments.
SET specification
Uses public key cryptography and
digital certificates for validating
both consumers and merchants
Provides privacy, data integrity,
user and merchant authentication,
and consumer no repudiation

RISK MANAGEMENT OPTION

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.
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.

CONCLUSION
EPS is a process to protect multiple spending.
Token forgery can be prevented .
It requires digital signature for authorization

REFERENCE
1.http://www.scribd.com/doc/13419829/electronic payment
system.pdf
2. http://seminar.basicknowledge.co.in/seminar-reports/epayment.html
3. http://pdf-ebooks.org/ebooks/online payments-pdf.pdf
4. http://www.encyclopedia.com/doc/1O11seminars.smart+cards.html

THANK YOU