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Seminar Report 2012-13 E-Wallet

INTRODUCTION

A digital wallet is a software component that allows a user to make an electronic


payment with a financial instrument (such as a credit card or a digital coin), and hides the
low-level details of executing the payment protocol that is used to make the payment.
A digital wallet, functions much like a physical wallet. The digital wallet was first
conceived as a method of storing various forms of electronic money (e-cash), but with little
popularity of such e-cash services, the digital wallet has evolved into a service that provides
internet users with a convenient way to store and use online shopping information.
A digital wallet has both a software and information component. The software
provides security and encryption for the personal information and for the actual transaction.
Typically, digital wallets are stored on the client side and are easily self-maintained and fully
compatible with most e-commerce Web sites. A server-side digital wallet, also known as a
thin wallet, is one that an organization creates for and about you and maintains on its servers.
Server-side digital wallets are gaining popularity among major retailers due to the security,
efficiency, and added utility it provides to the end-user, which increases their enjoyment of
their overall purchase.
The information component is basically a database of user-inputted information. This
information consists of your shipping address, billing address, payment methods (including
credit card numbers, expiry dates, and security numbers), and other information.
A digital wallet is a software component that provides a client with instrument
management and protocol management services. A digital wallet is linked into an end-user,
bank, or vendor application and provides the application with instrument management and
protocol management services. The digital wallets that are linked into vendor and bank
applications provide these management services in the same way that end-user digital wallets
do.

Dept. Of CHM 1 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

EVOLUTION

Digital wallets first emerged in the mid-1990s with a great deal of hype, but to a
lukewarm public reception. The earliest wallets required customers to download the digital
wallet vendor's (one who sells) software and store it on their desktops. This method largely
inhibited customers from warming to the technology. Downloads generally were viewed with
some skepticism by analysts, since they tend to limit overall distribution. Slow connection
speeds exacerbated the problem, since customers tend to grow frustrated and abort downloads
if they take an excessively long time to complete. In addition, any time the vendor updated its
digital wallet software, customers had to download all over again. Moreover, once the
software was downloaded, the digital wallet was stored on the computer's hard drive,
requiring the customer to make all purchases from that computer. This lack of flexibility
became increasingly problematic as more Internet shoppers roamed from one place to another
and used multiple computers for surfing and shopping.
Another impediment to digital wallet penetration was customer awareness.
In 1999, according to the research firm Bizrate.com, only 58 percent of online
purchasers were even familiar with digital wallets, while only one-fourth understood their
capabilities. In addition, the sheer glut of digital wallet offerings in the late 1990s—issued by
merchants, software vendors, credit card firms, banks, and other outfits—led to customer
confusion, not to mention frustration stemming from the lack of compatibility between all
these wallet packages. With no standardized payment system, customers were reluctant to fill
up their hard drives with mutually exclusive digital wallets, nor maintain contracts with
various firms.
In 2000, Forrester Research released the results of a survey of online merchants. The
merchants were asked why digital wallets had failed to attain prominence. Sixty-two percent
of U.S. e-merchants felt there simply was too little customer demand, while 54 percent
reported that digital wallets weren't a priority. Twenty-seven percent thought the market was
too immature, another 27 percent couldn't see any benefits in adopting the technology, and 19
percent thought that digital wallets would result in the loss of customer relationships.

Dept. Of CHM 2 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

The Electronic Commerce Modeling Language (ECML) was conceived as a


mechanism to clearly define a format for online order forms that could incorporate digital
wallet technology from any vendor. To adopt ECML, merchants need only reorganize their
existing online order forms so that the fields correspond to those set forth in the ECML
standard. No licensing or usage fees apply, and ECML requires no additional software or
hardware, according to Catalog Age. The first digital wallet to comply with ECML was IBM's
Consumer Wallet 2.1, which was that company's second shot at digital wallet technology.
Meanwhile, ECML standardized the format in which the various fields were stored in digital
wallets.
By the early 2000s, digital wallets were undergoing a mild renaissance. The models
developed at that time abandoned software downloads altogether, opting instead for digital
wallet systems that worked directly with ISPs and other telecommunications firms. In other
words they involved server-side (or "thin"), rather than client-side ("fat"), technology.

Dept. Of CHM 3 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

E-WALLET

The main objective of e-Wallet is to make paperless money transaction easier. The
electronic wallet (e-Wallet) is just like a leather wallet as it does the same, in terms of e-cash.
In today’s life where monetary value and security both, go hand in hand, it is difficult to
satisfy customers using the routine cards. The main idea behind this paper is to bring in a
cheaper, more versatile and much more easily usable kind of a card.

Salient features of e-Wallet are :-


* More than 40 years of data retention
* Firewall encrypted security logic
* Compatible with many supporting hardware.
* No separate card reader is required to access our card.
* Polarity reversal indicator is pre-built in our card.
* Reusability of our card is unlimited.
* Multiple card features are incorporated in the same card.
* External complexities are less.

Dept. Of CHM 4 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

CHARACTERISTICS
The digital wallets should be :-

Extensible :-
A wallet should be able to accommodate all of the users different payment
instruments, and inter-operate with multiple payment protocols. For example, a digital
wallet should be able to hold a users credit cards and digital coins, and be able to make
payments with either of them, perhaps using SET in the case of the credit card, and by
using a digital coin payment protocol in the latter case. As banks and vendors develop
new financial instruments, a digital wallet should be capable of holding new financial
instruments and make payments with these instruments. For instance, vendors should be
able to develop electronic coupons that offer discounts on products without requiring that
users install a new wallet to hold these coupons and make payments with them.

Client-Driven :-
The interaction between the wallet and the vendor, we believe, should be driven by
the client (i.e., the customer). Vendors should not be capable of invoking the clients
digital wallet to do anything that the end-user may resent or consider an annoyance. For
example, a vendor should not be able to automatically launch a clients digital wallet
application every time the user visits a web page that offers the opportunity to buy a
product. Imagine what life would be like if, simply by walking into someones store, the
store owner had the right to reach into your pocket, pull out your wallet, hold it in front of
you, and ask you if you wanted to buy something from him! A client-driven approach for
building a digital wallet is important because software which customers consider intrusive
will hinder the success of electronic commerce for all participants involved.

Dept. Of CHM 5 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

Symmetric :-
Vendors and banks run software analogous to wallets, which manages their end of
the financial operations. Since the functionality is so similar, it makes sense to re-use,
whenever possible, the same infrastructure and interfaces within wallets, vendors, and
banks. For example, the component that manages financial instruments (recording for
instance account balances, authorized uses) can be shared across these different
participants in the financial operations. If the wallet components that are re-used are
extensible, then we automatically get extensibility at the bank or vendor. So, for instance,
an extensible instrument manager will allow the bank or vendor to easily use new
instruments as they become available.

Generalized or Non –Web-Centric :-


Interfaces should be similar regardless of what type of device or computer that the
wallet, bank, or vendor application is running on. A digital wallet running on an
alternative device, such as a personal digital assistant (PDA) or a smart card, for example,
has substantial functionality in common with a digital wallet built as an extension to a web
browser. Thus, a digital wallet in these two environments should re-use the same
instrument and protocol management interfaces.

Dept. Of CHM 6 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

TRANSACTION PROCEDURE

* The A customer places order on website by pressing the 'Submit Order' or


equivalent button.

* The customer's web browser encrypts the information to be sent between the
browser & the merchant's webserver. This is done via SSL (Secure Socket Layer)
encryption.

* The merchant then forwards the transaction details to their payment gateway. This
is another SSL encrypted connection to the payment server hosted by the payment
gateway.

* The payment gateway forwards the transaction information to the payment


processor used by the merchant's acquiring bank.

* The payment processor forwards the response to the payment gateway.

* The payment gateway receives the response, and forwards it on to the website.

* The entire process typically takes 2–3 seconds.

* The merchant submits all their approved authorizations, in a "batch", to


their acquiring bank for settlement via their processor.

* The acquiring bank deposits the total of the approved funds in to the merchant's
nominated account. This could be an account with the acquiring bank if the merchant does
their banking with the same bank, or an account with another bank..

Dept. Of CHM 7 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

Dept. Of CHM 8 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

TECHNOLOGY USED

* An E-Wallet has both a software & information component.

* The software provides security & encryption for the personal information & for the
actual transaction.

* The information component is basically a database of user-inputted information.


This information consists of your shipping address, billing address, payment methods
(including user name, password & security questions), & other information.

Dept. Of CHM 9 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

SETUP & USE

Client-Side E-Wallet :-

* Some people prefer to access the Internet using one machine (e.g. those who stay
home most of the time or access sites from their work PC only). A Client-side e-wallet is
more suitable for these kinds of people. The client-side e-wallet is an appli-cation running
on the client PC that holds e-coin information.

* Fig. 1 shows how a vendor application server debits e-coins from the client- side e-
wallet. When buying an article content a customer clicks the title of the article on the web
browser (1) and then the web server sends the request to the vendor application server (2).
The vendor application server sends the price of the article to the e-wallet application (3)
and then the e-wallet application returns the e-coins, paying for the content to the vendor
application server (4-5).

Dept. Of CHM 10 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet
* Customers can buy article content using the client-side e-wallet at different news-
paper sites without the need to log in after the e-wallet application is downloaded to their
PC. Their e-coins are resident on their own PC and so access to them is never lost due to
network outages to one vendor. The e-coin debiting time is slower for a client- side e-
wallet than the server-side e-wallet due to the extra communication be-tween vendor
application server and customer PC’s e-wallet application.

Server-Side E-Wallet :-

* Some people prefer to access the Internet from multiple computers (e.g. a business
person who often travels around). A Server-side hosted e-wallet is suitable for these
people. The server-side e- wallet is stored on the vendor server and is transferred from the
broker to each vendor when required.

* Fig. 2 shows how a vendor application server debits e-coins from the server -side
e-wallet. When a customer clicks title of an article on his/her browser (1), the web server
sends the request to the vendor application server (2), which then debits e-coins from the
customer’s e-wallet (3) paying for the content. Customers can buy articles using the
server-side e-wallet anywhere in the world and the e-coin debiting time is very fast on the
server-side e-wallet system. However customers are required to remember e-coin IDs and
password in order to log into a newspaper site when changing vendor. When a customer
moves from one vendor to another, their e-wallet contents must be passed from the
previous vendor site to the new one. If the first vendor site becomes unavailable, the
customer temporarily does not have access to their e-wallet.

Dept. Of CHM 11 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

FEATURES OF E–WALLET

* Refillable
* Infinite lifetime
* Current balance can be stored and read
* User authentication is provided
* Universal access
* Maximum possible cash
* Cannot be duplicated

Dept. Of CHM 12 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

ADVANTAGES OF E-WALLET

Ease of use :-
* Withdraw or deposit value by telephone
* Pay the exact amount, no fiddling for change
* No signature required
* Immediate payment
In the future, access points may include mobile phones

Accessibility and convenience :-


* Cash machines and telephones give more access points to funds in bank account
* Available 24 hours / 365 days
* Cash machines and telephones cannot run out of electronic cash

Flexibility:
* Transfer value by telephone
* Pay person to person
* For low or high values
* Multi-currency capability

Dept. Of CHM 13 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet
* No age limit, so suitable for all the family

Safety and control:


* Spend only what you have
* Read your balance
* Load value at home
* Lock your card or wallet
* Keep track of what you have spent and where
* Customer is traceable if a lost card is found

DISADVANTAGES OF E-WALLET

* Users must download the wallet form and software, after the download is
complete, the wallet is installed as a plug-in or ActiveX control which is within a browser
that must also be install browser.

* Digital wallets and peer-to-peer (P-to-P) payment systems have failed to attract
meaningful adoption for business-toconsumer (B-to-C) transactions. However, P-to-P
payments have become common for consumer auctions, renewing hope that other
payment-related offerings might yet succeed.

Dept. Of CHM 14 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

FUTURE CHALLENGES

Key Challenges :-
There are three key challenges that must be overcome first.

1. Mass Market Appeal :-


Ensuring a mass market appeal for the digital wallet is important to leverage scale
economies and the network externality effect1. One way to increase the mass market
appeal is to make the digital wallet usable for all day-to-day transactions. Hence it is
important to support both point of sale transactions and peer-to-peer transactions between
individuals. Both of these require support from financial institutions, retailers and
government bodies : coordinating .Utility of the digital wallet is influenced by one’s social
network. If a majority of the participants in a person’s network are not digital wallet ready,
then one has to still use cash for monetary exchange these stake holders is a real challenge.
It should be noted that the Korean and Japanese methods to increase mass market appeal
may not work in Singapore due to differences in industrial organization and cultural
preferences.

Dept. Of CHM 15 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet
2. Stake Holder Dynamics :-
Any successful digital wallet deployment will need the Cooperation of multiple
stake holders such as banks, retailers, regulatory bodies, and consumer. This is a challenge
because satisfying the business and strategic goals of multiple stake holders is difficult.
For example, bank A may choose not to be a part of a consortium where competing banks
play a leading role. In addition some stake holders may have already invested in
alternative technologies and may not be in a position to make further investments.
Achieving buy-in from all stake holders may require the support of the government and
regulatory bodies. Fortunately the Singaporean government is receptive towards digital
wallet-type integration efforts.

3. Compelling user experience :-


The third challenge is designing a digital wallet that consumers want to use. This
requires a usable interface, and support for all financial transactions that a user may want
to perform. We plan to reuse some of the user interfaces and design principles developed
in Japan and South Korea. However there are many important features that still need to be
created. These include comprehensive backup and restore solutions, integration of a large
number of monetary and identification implements, and support for peer-to-peer cash
transactions. For example, this is the most common payment mode when paying for taxi
rides and when paying for food and drink. As such, consumers would resist using a digital
wallet if they still had to carry a conventional wallet for cash transactions.

Dept. Of CHM 16 M.P.T.C. Mala, Kallettumkara


Seminar Report 2012-13 E-Wallet

CONCLUSION

In today’s fast moving world where people live very stress full life, this approach
and innovativeness in wallet making would provide some help to people while shopping,
traveling etc as it is very easy to use. It also have tracking device which would provide
safety to your cards and ultimately to money. So people should buy this wallet because of
the safety purpose, easy to use and good quality.

Dept. Of CHM 17 M.P.T.C. Mala, Kallettumkara


REFERENCES

* http://en.wikipedia.org/wiki/Digital_wallet

* http://www.webopedia.com/TERM/D/digital_wallet.html

* http://www.luminous-landscape.com/reviews/digital_wallet.shtml

* http://ecommerce.hostip.info/pages/330/Digital-Wallet-Technology.html
ABSTRACT

The main objective of e-Wallet is to make paperless money transaction easier. The
main idea behind this paper is to bring in a cheaper, more versatile and much more easily
usable kind of a card. Using this e-Wallet the transaction procedure can be as simple as:
the customer goes to the point of sale (POS), does the purchasing and when it comes to the
payment, the customer submits his e-Wallet to vender who connects it to his terminal
(PC).The vender displays the billing information to the customer who finalizes it. The
amount in the e-Wallet is updated accordingly. Later at periodic intervals, the vender
intimates the bank (in case of credit cards) which transfers the amount from the
customer’(s) account to his.
The advantages of e-Wallet are its ease of use (doesn’t require a separate card
reader), ease of maintenance, flexibility, safety, being the primary ones. The designing of
the card is similar to any other embedded card. The designing cost of the card (e-Wallet)
being as low as the price of a pizza. There are ample enhancements to this application
from credit cards to televoice cards. Unlike traditional cards which are application
oriented, all the applications’ software can be embedded into this e-Wallet which provides
multi-functionality.
CONTENTS

1. INTRODUCTION 1

2. EVOLUTION 2

3. E-WALLET 4

4. CHARACTERISTICS 5

5. TRANSACTION PROCEDURE 7

6. TECHNOLOGY USED 9

7. SETUP&USE 10

8. FEATURES OF E-WALLET 12

9. ADVANTAGES OF E-WALLET 13

10. DISADVANTAGES OF E-WALLET 14

11. FUTURE CHALLENGES 15

12. CONCLUSION 17

13. REFERENCES 18

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