Expt No.

5
A study on Online Payment Methods
Aim- To do study on online payment methods

Theory
Identify various online payment methods
PayPal
Amazon Pay
Google Pay
American Express
Apple Pay

Compare these methods on the following parameters

Paypal
Convenience of Use
PayPal is easy to use – it's very a straightforward way to send money to friends and family.
Paying with PayPal gives you an extra level of security and fraud prevention. ... PayPal encrypts
your bank or credit card information, keeping that information safe. No fees for sending money
to friends and family.

Potential Threats
The risks included the following: Potential use of payment system for illegal purposes, such as
fraud, money laundering and offshore gambling. Disputes between buyers and sellers.
Unauthorized use of credit cards.

Cost of service
The current fees for PayPal Payments Pro are 2.9% + $0.30 per transaction for US transactions.
For international transactions, they're 4.4% + a fixed fee
Amazon Pay
Convenience of Use
The use of Amazon Pay means consumers don't have to take out their credit cards and type in
the details to complete a purchase. The service removes unnecessary friction in the checkout
process by eliminating the need to create accounts on multiple websites.

Potential Threats
One of the biggest threats to Amazon’s success is the increasing concern over online shopping
because of identity theft and hacking which leaves its consumer data exposed. Therefore,
Amazon has to move quickly to allay consumer concerns over its site and ensure that online
privacy and security are guaranteed.Because of its aggressive pricing strategies, the company
has had to face lawsuits from publishers and rivals in the retailing industry. The obsessive focus
on cost leadership that Amazon follows has become a source of trouble for the company
because of the competitors being upset with Amazon taking away the business from them.

Cost of service
Amazon Pay fees are transaction-based and have a processing and authorization component.
The transaction fee is composed of a domestic processing fee and an authorization fee, plus tax
where applicable, charged when the purchase is successfully authorized and processed.

Google Pay
Convenience of Use
Fast and easy purchases wherever they buy: In stores, customers speed through checkout when
they use Google Pay on their mobile device to tap and pay. No cost: Google Pay is a free mobile
app available in the Google Play Store. Customers don't pay extra transaction fees when they
use Google Pay to make purchases.

Potential Threats
This alert contains where the transaction occurred along with the merchant's name and the
amount of the payment or refund. If you misplace your phone you can use Android Device
Manager to either lock your device or perform a remote factory reset to prevent further Google
Pay transactions being processed.
Cost of service
Google Payment Corp. charges merchants no fees for accepting Google Pay. Note that when
Google Pay is used in a physical store, card networks consider Google Pay payments to be card-
present transactions. When used within an Android app, Google Pay payments are considered
card-not-present transactions.

American Express
Convenience of Use
Contactless cards are great facilitators for your everyday purchases and are fast being adopted
by both consumers and businesses. You can swipe your card or digital device at the point of
sale to complete your payment.

Potential Threats
Rivals
While Americans are a pioneer in their field of activities, they are not the only ones. In the
water, there is many enormous fish that are eager to gain market share. Staying ahead of
competitors is a task and a risk.
Business Nature
The very nature of America Express’s business creates a threat. The system is subject to
collapse due to volatile economic situations and financial insecurities. Government rules have
hurdled many enterprises and it is a challenge to stay highly productive

Cost of service
American Express charges between 2.5% to 3.5%.

Apple Pay
Convenience of Use
The attraction of Apple Pay is the convenience of already having your credit card details on your
device. Your customers are also already familiar with spending money on their Apple devices
(even if it's just via iTunes or the App Store).

Potential Threats
Apple Pay uses several layers of encryption to protect your information and they do not store
your full account number. This means a fraudster cannot access your credit card number using
Apple Pay—even if they were somehow able to access your account or an Apple Server (which
is almost impossible).

Cost of service
Apple also makes money off of Apple Pay Cash. The service is free to use when sending money
with a debit card, but it charges a 3 percent fee for any funds sent using a credit card. Cost:
Three percent of any funds sent using Apple Pay Cash tied to a credit card.

Payment Gateways
Identify the key technologies behind payment gateways.
A payment gateway is a technology used by merchants to accept debit or credit card purchases
from customers. The term includes not only the physical card-reading devices found in brick-
and-mortar retail stores but also the payment processing portals found in online stores.
However, brick-and-mortar payment gateways in recent years have begun accepting phone-
based payments using QR codes or Near Field Communication (NFC) technology.

What are the Payment Gateways available in India?

Razorpay
Instamojo
Paypal
Paytm
Cashfree
Net Banking
Identify various Net Banking options available in India.
National Electronic Fund Transfer (NEFT)
Real Time Gross Settlement (RTGS)
Electronic Clearing System (ECS)
Immediate Payment Service (IMPS)

Identify key characteristics of the below net banking options and compare them.
NEFT
Saves time and effort
With NEFT payments, all a sender must do is log into their net banking account and select the
right beneficiary.
Payments occur electronically
Payments occur over a secure mode
Transaction fee
NEFT operating hours

RTGS
Realtime online fund transfer.
Used for high value transactions.
Safe and secure.
Reliable and backed by the RBI.
Immediate clearing.
Funds credited on a one-on-one basis.
Transactions executed on an individual and gross basis.

IMPS
Transfering funds through IMPS is as safe as NEFT and RTGS.
The facility can be easily used on any phone or smart device with an internet connection.
It is one of the fastest ways for intra-bank fund transfer.
The amount is credited instantly without any delays.

UPI
One-time Mandate. Customers can now pre-authorize a transaction and pay on a later date
with UPI mandate feature.
Invoice Verification. The new UPI 2.0 features dispatch of online invoice to the customer from
the merchant.
Link an Overdraft Account.
Additional Security through Signed Intent and Q

USSD
A USSD message can be upto 182 alphanumeric characters in length
Unlike SMS, USSD is a session oriented service
Simple and easy to send. No need to go into any menus and options. Just directly entered on
the default mobile screen.
USSD works on all GSM handsets of Phase II or later.
There will not be any latency in request and responce as we experience in SMS based services
The functionality will be the same even while roaming as the USSD messages always routed
back to Home HLR.
USSD is supported by WAP, SIM Application Toolkit and CAMEL enabling scope for many
applciations.
Works in two modes: pull mode and push mode.

E-WALLET Technologies
Analyze the advantages and disadvantages of following E-Wallet Technologies.
PAYTM
Advantages
It is quick and safe.
Widely accepted today.
Paid bill payment, recharge book ticket, and lots more in a single application and keep track of
everything under order history.
Good wallet limits.
Easy and automatic refund to Paytm wallet in case of product cancellation at partners store.
When you need money, simply return it to the same bank.
Paytm also offers free bank-to-bank transfers through UPI, such as Phonepe BHIM or Google
Pay.
Get cash back on most of the stores using Paytm wallet.
Use your credit cards to load money in your Paytm wallet and earn reward points.
If you don’t have enough money, you can use Paytm to pay with the card.
Avail Paytm postpaid if you have a good history with Paytm same as credit card and pay later.

Disadvantages
Currently unavailable on at least all prominent websites such as Amazon and Flipkart.
It will charge the merchant in the future to accept payment from customers, as nothing comes
for free in this world.
You could be charged up to 4% for transferring money from Paytm to your bank account.
Since it isn’t available in most big online and offline retailers, you’ll need to keep your
debit/credit card on hand if you want to shop there.
Due to security concerns, a lower monthly cap, or the desire to make black money, a few
merchants have refused to accept Paytm money.
Sometimes the application doesn’t work properly as it comes with the loss of services combined
in a single app.
If you lose your phone, you can lose your Paytm cash because they don’t have email id
authentication.
Using the internet to pay for things rather than using cash or a credit card.
Worse customers support in case you need help while shopping/cancelling/returning items.
It can take up to 7 days for the money to be credited to the bank account if you return products
on Paytm, but it is free always.

GooglePay
Advantages
It is faster to pay for things
Most importantly It is very secure
There are no extra charges for using the service.
It is easy to use.
Fast and secure mobile payment.
It eliminates the need for certain people to bring a wallet around with them.
Money can be sent and received quickly and easily.
This app allows you to pay your utility bills, recharge your phone, and shop online.
Google uses encryption and several layers of authentication to protect transactions.
Benefits from a variety of cashback and incentive programs

Disadvantages
It doesn’t work with some credit cards
It is not usable at every single store
Poor customer services
The support center is not able to assist you.
To pay for stuff, one will have to take out his or her phone more often.
Moreover, the virtual money source will allow people to spend more money than they have. As
a result, People are more likely to look over and steal your pin number if you have a virtual
money source.
PhonePe
Advantages of
PhonePe is a convenient tool for business users. Payment of utility bills, payment of wages, and
a payment request from clients can all be done through this app.
You can easily set all the utility bill payments like electricity, postpaid mobile bill, landline bill,
water tax, house tax, the Insurance premium.
This app supports both English and Hindi languages as well as Marathi, Tamil, and Bengali. This
makes the app more usable and friendly to operate for all the native who speaks any of that
language.
Phonepe gives consumers a variety of payment choices to choose from. UPI, bank accounts,
credit cards, and debit cards can all be connected to the app, making it a versatile payment
system that ensures each source is working properly.
The app also offers a much quicker and more reliable form of transaction. The direct transfer of
funds from the user’s account to the phone wallet eliminates the need for an account or card
linking.
Phonepe is a single app that also offers a variety of other services on its website. With the
switch option, you can quickly and easily access your favourite apps and services.

Disadvantages
Because when you tap on the PhonePe app on your mobile, the dashboard opens without any
authentication. It neither ask your PIN nor password to open.
When you pay with the app, it will appear that processing is still in progress. And it lasts for a
long time. Due to technical problems, it can take up to 3 days.
It also happens when you pay to a merchant, the message is displayed, payment successful.
Your account is also debited for that number, but the receiver account is creditless. In certain
cases, credit processing can take up to 24 hours. It frequently causes you emotional distress.
The ticket should be booked through the phone app the problem arises when there is a refund
issue of the cancelled ticket.
Phonepe does not give you interest in your wallet deposit. Other UPI apps that have wallet
facilities do not give interest as well.

AmazonPay
Advantages
Very secure
Very easy shopping
Customer support is great
Sending money is easy

Disadvantages
Card selection easier before buying
Could have more people who use it
Faster pay-outs when collecting payments

4) CRYPTO CURRENCIES: Bitcoin

Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing
transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is
open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.
Through many of its unique properties, Bitcoin allows exciting uses that could not be covered
by any previous payment system.

Conclusion-Online payment methods were studied successfully.