Finance Project

A strategic overview of e-payment in Indian business
CHAPTER l
INTRODUCTION
`1.1 OVERVIEW OF E-PAYMENT

1.2 MEANING AND DEFINITION OF E-PAYMENT
1.3 E-PAYMENT – A BRIEF HISTORY
1.4 CHARACTERISTICS OF E-PAYMENT
1.5 ADVANTAGES OF E-PAYMENT
1.6 DISADVANTAGES OF E-PAYMENT
1.7 IMPORTANCE OF E-PAYMENT
1.8 TYPES OF E-PAYMENT
1.9 ISSUES AND CHALLENGES OF E-PAYMENT
1.10 OVERCOME OF PROBLEM IN E-PAYMENT
1.11 E-COMMERCE
Sydenham college of commerce and economics 1

CHAPTER I
INTRODUCTION
1.1 Overview of e-payment
In today’s digital era the usage of the internet has increased drastically. All
counts of age are consuming and producing loads of data each second. Many
organizations are analysing and altering based on the study that they been able
to capture from the consumer analysis. With the ease of smart phones and virtual
accessibility of products, services and payments online have boosted the way
people are shopping and making payments online. The ecommerce industry
initially started with the Cash on Delivery basis for the people to get the feel of
the new online industry and also to build up their trust. After the customers are
well versed with the organization ns, the company started introducing various
platforms of the online payments. E-Payment has given access to various
financial platforms like debit card, credit card, net banking, digital wallets, etc.
Cash has become a less common mode of transaction as the appearance of e-
payments has allowed consumers and buyers with greater convenience, but at
the same time it has raised a doubt or a threat as there has always been increasing
issues regarding the fraud and privacy concern that has been the top fear in the
minds of internet users.
We all have witnessed that the traditional payment modes have been
replaced by various types of e-payments that are quick and efficient. In e-
payment process both buyer and seller uses digital modes to send or receive
money, it is an automatic process where seller and the buyer can avoid visiting
their bank. It eliminates the physical cash that is risky to handle at times. Today
consumers can make payment through electronic modes by using cards and
other platforms that are made available through all types of smart devices. The
acceptance of particular payments by sellers and businesses has an important
influence on the purchases made by their clients, as the availability of the
various modes help the consumer to choose that is suitable or available to them
as well. Past few years’ smart phones are having a tremendous growth due to
accessibility and availability of the internet. The mobile wallet providers like

Paytm, PayPal, Mobikwik, etc. with the payback schemes also attracting many
consumers to use E-payment modes aiding the organizations with significant
growth. The digital wallets are further enabling economies to a cashless society.
Electronic wallets and mobile wallets are moreover digital version of the
hard cash in physical wallet with more features and functions. E-payments
wallets reduce cost of cash holding and handling for the retailers. Retailers on
online platform have introduced lucrative discounts and cash back offers to get
payment orders for all the cashless payments. The online platform retailers have
encouraged more customers to choose a payment mode other than Cash on
Delivery, it also helps a business to retain their customer. Consumers will return
to the same website where his or her details are stored for making payments,
this way the transaction process reduces making the online shopping smoother.
1.2 MEANING AND DEFINITION OF E-PAYMENT

An e-payment system is a way of making transactions or paying for goods and
services through an electronic medium, without the use of checks or cash. It’s
also called an electronic payment system or online payment system.
1.2.1 Definition of E-Payment

In the last two decades, electronic payment systems (EPS) have attracted much
attention from researchers and information system designers due to their vital
role in modern electronic commerce. This led to wide and in-depth researches
that produced different perspectives on e-payment definitions among others.
These definitions were mainly viewed from different perspectives ranging from
scholars in the field of accounting and finance, business technology to those in
information systems. For instance, Dennis (2004) defines e-payment system as
a form of financial commitment that involves the buyer and the seller facilitated
via the use of electronic communications. Also, Briggs and Brooks (2011) sees
e-payment as a form of inter-connections between organizations and individuals
aided by banks and inter-switch houses that enables monetary exchange
electronically.

In another perspective, Peter and Babatunde (2012) viewed e-payment system

as any form of fund transfer via the internet. Similarly, according to Adeoti and
Osotimehin (2012), electronic payment system refers to an electronic means of
making payments for goods and services procured online or in supermarkets
and shopping malls. Another definition suggests that e-payment systems are
payments made in electronic commerce environment in the form of money
exchange through electronic means (Kaur & Pathak, 2015).
Furthermore, kalakota and whinstone (1997), sees electronic payment as a

financial exchange that take place online between the seller and the buyer .
Moreover, Humphrey and Hancock (1997) are in the opinion that electronic
payments refer to cash and associated transactions implemented using
electronic means. E-payment is also defined as payment by electronic transfer
of credit card details, direct credit or other electronic means other than
payment by cheque and cash (Agimo, 2004).
Antwi, Hamza, and Bavoh (2015) defined e-payment as a payer’s transfer of a

monetary claim on a party acceptable to the beneficially. Lin and Nguyen (2001)
define e-payment as payments made via the automated clearing house,
commercial card systems and electronic transfers. Shon and Swatman (1998)
define e-payment as any exchange of funds initiated via an electronic
communication channel. Gans and Scheelings (1999) define e-payment as
payments made through electronic signals linked directly to deposit or credit
accounts. Hord (2005) also sees e-payment as any kind of non-cash payment
that does not involve a paper cheque.
Also, Teoh, Chong, Lin, and Chua (2013) viewed e-payment as any transfer of
an electronic value of payment from a payer to payee through an e-payment
channel that allows customers to remotely access and manage their bank
accounts and transactions over an electronic network. In a nutshell, going by the
above definitions, e-payment system can simply be defined as a collection of
components and processes that enables two or more parties to transact and
exchange monetary value via electronic means.

1.3 E-PAYMENT – A BRIEF HISTORY
Electronic payments have their roots in the 1870s, when Western Union debuted
the electronic fund transfer (EFT) in 1871. Since then, people have been
enamored with the idea of sending money to pay for goods and services without
necessarily having to be physically present at the point-of-sale. Technology has
been a driving factor in the development of electronic payments. Today, making
a purchase is as easy as tapping a button on your smartphone. Work with
streamlining payment methods has been hard-won.
From the 1870s until the late 1960s, payments underwent a slow but gradual
transformation. In the 1910s, the Federal Reserve of America began using the
telegraph to transfer money. In the 1950s, Diner’s Club International established
itself as the first independent credit card company, soon followed by American
Express. In 1959, American Express introduced the world to the first plastic
card for electronic payments.
Entering the 1970s, people became more reliant on computers as part of the
buying process. In 1972, the Automated Clearing House (ACH) was developed
to batch process large volumes of transactions. NACHA established operating
rules for ACH payments just two years later.
The World Wide Web

Then along came the Internet. In the 1960s, ARPANET, a precursor to the
modern Web, was built as a military network to improve communication. In the
1990s, online internet banking services were offered to bank customers. Those
first online payment systems were anything but user-friendly users had to have
specific encryption knowledge and use data transfer protocols.
Soon, development across the Web, and the eventual invention of Web 2.0, set
the stage for online sites to participate in what’s now known as e-commerce. In
1994, Amazon, one of the pioneers of E-commerce, was founded, along with a
slew of other websites that we know and love to purchase on.

Payment acceptance and securing payments has been a specific challenge for e-
merchants and payment processors. In the early days of electronic payment
processing, you needed special equipment and software to send a payment for
goods. Now, payment acceptance can be integrated into websites, mobile
platforms, and at the point-of-sale for scalability amongst merchants big and
small.
Keeping Your Private Data Safe

As technology changes at an increasingly rapid pace, however, keeping your
data safe has been at the forefront of most merchant’s minds. It’s easy to see
why. Data breaches can have long-reaching financial and systematic impacts
for businesses, and can damage the reputation of long-standing organizations.
What’s more, breaches can also spell financial ruin for companies without the
financial, legal and logistical bandwidth to weather the storms of a hack.
Regulations by both NACHA and PCI standardize how payment data is
received, stored, transmitted and processed for each transaction, and help reduce
the likelihood of an attack. However it’s important that payment processors who
offer PCI compliance programs stay ahead of those who wish to do harm to
hardworking business owners by hacking their systems.
For point-of-sale transactions, EMV-enabled (also known as “chip card”)
transactions add another level of encryption to your sales when performing card-
present sales. End-to-end encryption, like what Forte offers, provides a level of
security to your entire payment processing system from terminal to payment
acceptance and beyond. When accepting payments online, SSL webpages and
other methods of data encryption help ease the worry of consumers and take
some of the burden off merchants to remain PCI-compliant.
What’s Next for Electronic Payments?

In a recent study by the Federal Reserve System, electronic payments now
exceed two-thirds of all non-cash payments, and more than 64 million
households pay at least one bill online. Offering consumers more ways to
efficiently pay bills and purchase the things they want should be a key objective
for all modern business owners.

Hot-button technologies like cryptocurrency and blockchain could be another

way payment processing gets another technological push into a new era. After
all, some cryptocurrency contenders aim to revolutionize the processing time
for electronic payments, and if successful, can completely change the game for
the payments industry. But in the interim, new trends like PIN on Glass
acceptance to allow customers to use their PIN for mobile point-of-sale
transactions, as well as contactless payments, same-day ACH and
advancements in payment APIs all are geared towards making payment
processing simpler, faster and more efficient.
For the last century and a half, the world of electronic payments has seen several
notable technological shifts. As we speed through the industrial advances that
the payment industry currently faces, we will only see a payment processing
scheme that is safer, faster and operates how consumers and merchants need.

1.4 Characteristics of E- payment system:
1) Security
Since payments involve actual money, payment systems will be a prime target
for criminals. Since Internet services are provided today on networks that are
relatively open, the infrastructure supporting electronic commerce must be
usable and resistant to attack in an environment where eavesdropping and
modification of messages is easy.
2) Scalability
As commercial use of the Internet grows, the demands placed on payment

servers will grow too. The payment infrastructure as a whole must be able to
handle the addition of users and merchants without suffering a noticeable loss
of performance. The existence of central servers through which all transactions
must be processed will limit the scale of the system. The payment infrastructure
must support multiple servers, distributed across the network.
3) Anonymity
For some transactions, the identity of the parties to the transaction should be
protected it should not be possible to monitor an individual's spending patterns,
nor determine one's source of income. An individual is traceable in traditional
payment systems such as checks and credit cards. Where anonymity is
important, the cost of tracking a transaction should outweigh the value of the
information that can be obtained by doing so.
4) Acceptability
The usefulness of a payment mechanisms is dependent upon what one can buy
with it. Thus, a payment instrument must be accepted widely. Where payment
mechanisms are supported by multiple servers, users of one server must be able
to transact business with users of other servers.
5) Customer base
The acceptability of a payment mechanism is affected by the size of the

customer base, i.e. the number of users able to make payments using the

mechanism. Merchants want to sell products, and without a large enough base
of customers using a payment mechanism, it is often not worth the extra effort
for a merchant to accept the mechanism.
6) Flexibility
Alternative forms of payment are needed, depending on the guarantees needed

by the parties to a transaction, the timing of the payment itself, requirements for
auditability, performance requirements, and the amount of the payment. The
payment infrastructure should support several payment methods including
instruments analogous to credit cards, personal checks, cashier's checks, and
even anonymous electronic cash. These instruments should be integrated into a
common framework.
7) Convertibility
Users of the Internet will select financial instruments that best suit their needs
for a given transaction. It is likely that several forms of payment will emerge,
providing different tradeoffs with respect to the characteristics just described.
In such an environment it is important that funds represented by one mechanism
be easily convertible into funds represented by others.
8) Efficiency
Royalties for access to information may generate frequent payments for small
amounts. Applications must be able to make these "micropayments" without
noticeable performance degradation. The cost per transaction of using the
infrastructure must be small enough that it is insignificant even for transaction
amounts on the order of pennies.
9) Ease of use
Users should not be constantly interrupted to provide payment information and

most payments should occur automatically. However, users should be able to
limit their losses. Payments beyond a certain threshold should require approval.
Users should be able to monitor their spending without going out of their way
to do so.

1.5 ADVANTAGES OF E-PAYMENT SYSTEM
E-payments have several advantages, which were never available through the
traditional modes of payment. Some of the most important are:
1) Time savings
Money transfer between virtual accounts usually takes a few minutes, while a
wire transfer or a postal one may take several days. Also, you will not waste
your time waiting in lines at a bank or post office.
2) Expenses control
Even if someone is eager to bring his disbursements under control, it is

necessary to be patient enough to write down all the petty expenses, which often
takes a large part of the total amount of disbursements. The virtual account
contains the history of all transactions indicating the store and the amount you
spent. And you can check it anytime you want. This advantage of electronic
payment system is pretty important in this case.
3) Reduced risk of loss and theft
You cannot forget your virtual wallet somewhere and it cannot be taken away
by robbers. Although in cyberspace there are many scammers, in one of the
previous articles we described in detail how to make your e-currency account
secure.
4) Low commissions
If you pay for internet service provider or a mobile account replenishment

through the UPT (unattended payment terminal), you will encounter high fees.
As for the electronic payment system: a fee of this kind of operations consists
of 1% of the total amount, and this is a considerable advantage.
5) User-friendly

Usually every service is designed to reach the widest possible audience, so it

has the intuitively understandable user interface. In addition, there is always the
opportunity to submit a question to a support team, which often works 24/7.
6) Convenience
All the transfers can be performed at anytime, anywhere. It's enough to have an
access to the Internet. Individuals can pay their bills and make purchases at
unconventional locations 24 hours a day, 7 days a week, 365 days a year. There
is no waiting for a merchant or business to open. Debit cards and online bill
payments allow immediate transfer of funds from an individual's personal
account to a business's account regardless the designated place (around the
globe) by few clicks without any actual paper transfer of money.
1.6 DISADVANTAGE OF E-PAYMENT SYSTEM
1) Authentication/Fraud:
There is no way to authenticate or verify that the individual entering the

information online is who they say they are. There is no request for picture
identification or even a signature. Therefore, an unauthorized user may carry
out transactions in your name before you have time to alert authorities the
information has been taken. Because no identifying information is provided at
the time of the online payment, an individual may have an extremely hard time
disputing a charge later. Further, given the benefits of convenience and speed
that come along with e-payments, this creates the perfect opportunity for
fraudulent credit card transactions.
2) Restrictions :
Each payment system has its limits regarding the maximum amount in the
account, the number of transactions per day and the amount of output.
3) Hacking :
If you follow the security rules the threat is minimal, it can be compared to the
risk of something like a robbery. The worse situation when the system of

processing company has been broken, because it leads to the leak of personal
data on cards and its owners. Even if the electronic payment system does not
launch plastic cards, it can be involved in scandals regarding the Identity theft.
4) Transferring money between different payment systems:
Usually the majority of electronic payment systems do not cooperate with each
other. In this case, you have to use the services of e-currency exchange, and it
can be time-consuming if you still do not have a trusted service for this purpose.
5) The lack of anonymity:
The information about all the transactions, including the amount, time and
recipient are stored in the database of the payment system. And it means the
intelligence agency has an access to this information.
6) Internet access:
If Internet connection fails, you cannot get to your online account. There is also
a pressing issue regarding the technology involved in electronic cash suchpower
failures, internet connection failure, loss of records and undependable software.
These often cause a major setback in promoting the technology.
1.7 IMPORTANCE OF E-PAYMENT SYSTEM
1) Easy to set up:

The first benefit of online payment systems is that they are easy to incorporate
into your business software and workflow. The integration process is more or
less the same for every online payment provider and requires your company to
register for an account. The registration process is quick, without a ton of
required paperwork. You can start accepting payments online within a few
minutes.
2) Affordable for every business:
Most providers have zero setup fees and, compared to e-banking systems, they
offer lower transaction fees. Some online payment gateways also have a minimum

amount per year that is transaction fee-free! Above a certain amount of payments,
online payment providers often give a discount. Therefore, your cost remains low even
when business is going well!
3) Quality customer experience:
The benefits of online payments for your business extend to your clients too. They will
immediately appreciate you having an online payments option to finish their purchase
online. This is also true if you’re a freelancer offering some sort of services to
companies. In both cases, giving your clients the ability to pay you with their credit or
debit card online is a huge advantage. Imagine making them do all the work themselves
via the banking system, or worse, in person with cash. In a completely secure and easy
to navigate environment, your customers can pay off outstanding invoices.
4) Secured payments:
One of the most important benefits of online payments for your business is that your
and your clients’ money are safe. Online payment gateways are obliged to
apply multiple security layers for transactions so that the clients’ card details are not
stolen from scammers. Respectively, your money is transferred to your account safely.
You also get notified for payments automatically via email, so you can do your cross-
checking.
5) Quick transactions clearing:
Security is obviously quite important, but getting your money on time is crucial to your
cash flow! Online payments are usually cleared in one or two working days, depending
on the traffic. Τhis way you are able to have a better estimation of your liquidity
and accurately plan your next moves.
6) Manage subscriptions:
Put the hassle of payment reminders behind you and let the online payments system
do the work for you. Online payment gateways offer a recurring billing option,
which automates the whole process for collecting subscriptions on time. This feature
doesn’t require any action on the client’s part.
7) Gain impulse buyers:
Among the benefits of the online payment system for e-shops is that buyers are
more likely to purchase if the payment process is instant. Accepting credit cards is

important to increase your revenues while not having to deal with the actual billing
process yourself.
8) No banking account needed:
One of the most important benefits of accepting payments online is that it doesn’t
require your company to have a bank account for those transactions. Receiving
payments outside the traditional banking system has plenty of advantages, first being
avoiding filling out needless paperwork. In countries with capital controls in place,
businesses gain a competitive advantage while their sales operations remain intact
regardless of the capital restrictions.
9) Mobile payments:
Online payments can be carried through mobile devices just as easily and from
anywhere, as long as there is an active internet connection. Buyers increasingly use
their phones to purchase items online and the process needs to be as simple as possible.
Online payments providers offer intuitive interfaces that enhance the customer
experience even more! Probably, modern, user-friendly payment gateways are the
reasons that there are so many advantages of online payment!
10) Buyers are accustomed to paying online:

It has been a long and slow process for customers to realize that the internet,
and especially submitting their card details online, is safe after all (well, most
of the time). Actually, your credibility as a merchant can be questioned if you
lack this payment option. Especially if you run your business online. Be smart
and integrate an online payment system for your reputation’s sake!

1.8 Types of E-payment system
1) Credit cards:-
A Credit card is a piece of plastic, 3-1/8inches by 2-1/8 inches in size, that
carries information that allow you to make purchase now pay for them later .
Credit cards from visa maser card or any other network allow you to pay for
purchase or services by borrowing from the credit card company. To purchase
goods from merchant who accept credit card such as merchant has credit card
reader to purchase the payment transaction to withdraw cash from ATM. You
then repay by making monthly payment toward the amount borrowed ,that is
you don’t have to repay the whole borrowed amount in fill at one go.
2) Debit Card:-
Debit card is a prepaid card and also known as ATM card. An individual has to
open an account with the issuing bank which gives debit card with a personal id
number, when he makes a purchase he enter his pin number on shop pin pad.
When the card is slurped through the electronic terminal it dial the acquire a
banking system either master card or visa card that validate the pin and finds
out from the issuing bank whether to accept or decline the transaction the
customer can never overspend because the system reject any transaction which
exceeds the balance in his account the bank never face a default because the
amount spent is debited immediately from the customer account With almost
every bank account you are issued a debit card.
3) Smart card:-
Smart card was first introduce in Europe most of these method are known as
stored value card .A smart card is about the size of a credit card, made of a
plastic with an embedded microprocessor chip that holds important financial
and personal information. The microprocessor chip is loaded with the relevant
information and periodically recharged. In addition to these pieces of
information, systems have been developed to store cash onto the chip. The

money on the card is saved in an encrypted form and is protected by a password

to ensure the security of the smart card solution. In order to pay via smart credit
is necessary to introduce the card into a hardware terminal. The device requires
a special key from the issuing bank to start a money transfer in either direction.
Smart cards can be disposable or rechargeable.
4) Digital Wallet (Electronic wallet):-
Electronic wallets being very useful for frequent online shoppers are
commercially available for pocket, palm-sized, handheld, and desktop PCs.
They offer a secure, convenient, and portable tool for online shopping. They
store personal and financial information such as credit cards, passwords, PINs,
and much more .To facilitate the credit-card order process, many companies are
introducing electronic wallet services. E-wallets allow you to keep track of your
billing and shipping information so that it can be entered with one click at
participating merchants' sites. E-wallets can also store e-checks, e-cash and your
credit-card information for multiple cards .
5) Electronic Cheque:-
Electronic cheque is messages that contain all the information that is found on
an ordinary Cheque but it uses digital signature for signing and endorsing and
has digital certificate to authenticate bank account. There are many websites
that accept Electronic Cheque. An electronic payment process that resembles
the function of paper cheques but offers great security and more feature.
Electronic checks are typically used in orders processed online and are governed
by the same laws that apply to paper checks. Electronic checks offer protective
measures such as aunthentification and digital signatures to safeguard digital
transactions.
6) Electronic cash:-
Similar to regular cash, e-cash enables transactions between customers without

the need for banks or other third parties. When used, e-cash is transferred
directly and immediately to the participating merchants and vending machines.
Electronic cashes a secure and convenient alternative to bills and coins. E-cash
usually operates on a smartcard, which includes an embedded microprocessor

chip. The microprocessor chip stores cash value and the security features that
make electronic transactions secure. when e cash created by one bank is
accepted by other reconciliation must occur without any problem cash must be
storable and receivable. Most E-cash is transferred directly from the customer's
desktop to the merchant's site. Therefore, e-cash transactions usually require no
remote authorization or personal identification number (PIN) codes at the point
of sales.
1.9 Method of e-payment
• A one-time customer-to-vendor payment is commonly used when you shop

online at an e-commerce site, such as Amazon. You click on the shopping cart
icon, type in your credit card information and click on the checkout button. The
site processes your credit card information and sends you an e-mail notifiying
you that your payment was received. On some Web sites, you can use an e-
check instead of a credit card. To pay by e-check, you type in your account
number and your bank's routing number. The vendor authorizes payment
through the customer's bank, which then either initiates an electronic funds
transfer(EFT) or prints a check and mails it to the vendor.
• You make a recurring customer-to-vendor payment when you pay a bill through
a regularly scheduled direct debit from your checking account or an automatic
charge to your credit card. This type of payment plan is commonly offered by
car insurance companies, phone companies and loan management companies.
Some long-term contracts (like those at gyms or fitness centers) require this type
of automated payment schedule.
• To use automatic bank-to-vendor payment, your bank must offer a service
called online bill pay. You log on to your bank's Web site, enter the vendor's
information and authorize your bank to electronically transfer money from your
account to pay your bill. In most cases, you can choose whether to do this
manually for each billing cycle or have your bills automatically paid on the same
day each month.

1.10 Issues and Challenges Regarding Electronic Payment

System
1) Lack of Usability
Electronic payment system requires large amount of information from end

users or make transactions more difficult by using complex elaborated websites
interfaces. For example credit card payments through a website are not easiest
way to pay as this system requires large amount of personal data and contact
details in web form.
2) Lack of Security
Online payment systems for the internet are an easy target for stealing money
and personal information. Customers have to provide credit card and payment
account details and other personal information online. This data is sometimes
transmitted in an un-secured way, Providing these details by mail or over the
telephone also entails security risks.
3) Issues with e-Cash
The main problem of e-cash is that it is not universally accepted because it is

necessary that the commercial establishment accept it as payment method.
Another problem is that when we makes payment by using e-cash, the client
and the salesman have accounts in the same bank which issue e-cash. The
payment is not valid in other banks.
4) Lack of Trust
Electronic payments have a long history of fraud, misuse and low reliability as
well as it is new system without established positive reputation. Potential
customers often mention this risk as the key reason why they do not trust a
payment services and therefore do not make internet purchases.
5) Lack of Awareness

Making online payment is not an easy task. Even educated people also face
problems in making online payments. Therefore, they always prefer traditional
way of shopping instead of online shopping. Sometimes there is a technical
problem in server customers tried to do online payments but they fails to do. As
a result they avoid it.
6) Online Payments are not Feasible in Rural Areas
The population of rural areas is not very literate and they are also not able to
operate computers. As they are unaware about technological innovations, they
are not interested in online payments. So the online payment systems are not
feasible for villagers.
7) Highly Expensive and Time Consuming
Electronic payment system are highly expensive because it includes set up cost,
machine cost, management cost etc. and this mode of payment will take more
time than the physical mode of payment.
1.11 Overcomes of Problems in Electronic Payment

Systems
1) Encryption
Online shopping are very sensitive to notion that e-commerce is insecure,

particularly when it comes to online payments. Most online payment systems
use an encryption system to add security to the transmission of personal and
payment details. There are various encryption schemes in use to prevent from
frauds of online payments.
2) Digital Signatures
The parties involved in online payments, transactions should use digital

signatures in order to ensure authentication of transactions.
3) Check Whether the Country is a “High Risk” Country
Always require closer inspection for orders that being shipped to an

international address. Pay more attention if the card or the shipping address is

in an area prone to credit card fraud. According to a Clear Commerce® survey,

the top 12 international sources for online fraud are Ukraine, Indonesia,
Yugoslavia, Lithuania, Egypt, Romania, Bulgaria, Turkey, Russia, Pakistan,
Malaysia, and Israel. The same survey also showed that the 12 countries with
the lowest fraud rates are Austria, New Zealand, Taiwan, Norway, Spain, Japan,
Switzerland, South Africa, Hong Kong, the UK, France, and Australia. It is
helpful in maintaining the authentication in online payments.
4) Firewalls
A firewall is an integrated collection of security measures designed to prevent

unauthorized electronic access to a networked computer system to protect
private network and individuals machines from the dangers of the greater
internet, a firewall can be employ to filter incoming or outgoing traffic based on
a predefined set of rules called firewalls policies. There are 3 policy actions of
firewalls: Accepted: Permitted through the firewall.
5) Call the credit card issuing bank to verify the validity of credit card
`If online merchants have any suspicions about an order and need to confirm
the details of the order, they can call the issuing bank and ask to confirm the
general account details. This is to make sure that the card is not stolen. The
issuing bank phone number is based on the first 6 digits of credit card number
known as the Bank Identification Number (BIN).
6) Request more identification in case of doubts
While consumers value their privacy and require quick web site ordering
facilities, it is important to gather sufficient customer identity details during the
ordering process. The customers’ name, credit card number and expiry date is
not enough. Merchants should call them for verification through phone or
request a photo ID to be faxed if they have any doubts

1.12 E-COMMERCE
E-commerce or can say electronic commerce can be defined as a term which

describes the selling and purchasing of any good over the Internet, like, buying
the clothes, shoes, apparel or anything on an online platform, in simple words,
e-commerce is a process where the businesses and the consumers sell and
purchase goods via an electronic medium. E-commerce includes online
marketing, supply chain system, online transactions, mobile marketing and so
many transfers of data through an electronic path which helps the business to
run and grow.
Modern electronic commerce typically uses the World Wide Web for at least
one part of the transaction's life cycle although it may also use other
technologies such as e-mail. Typical e-commerce transactions include the
purchase of online books (such as Amazon) and music purchases (music
download in the form of digital distribution such as (iTunes Store), and to a less
extent, customized online liquor store inventory services. There are three areas
of e-commerce: online retailing, electronic markets, and online auctions. E-
commerce is supported by electronic business.
E-commerce businesses may also employ some or all of the followings:
• Online shopping for retail sales direct to consumers via Web

sites and mobile apps, and conversational commerce via live chat, chatbots,
and voice assistants
• Providing or participating in online marketplaces, which process third-
party business-to-consumer (B2C) or consumer-to-consumer (C2C) sales
• Business-to-business (B2B) buying and selling;

• Gathering and using demographic data through web contacts and social
media
• Business-to-business (B2B) electronic data interchange
• Marketing to prospective and established customers by e-mail or fax (for
example, with newsletters)
• Online financial exchanges for currency exchanges or trading purposes.

CHAPTER II
RESEARCH METHODOLOGY
2.1 DEFINITION
2.2 TYPES OF RESEARCH
2.3 RESEARCH DESIGN
2.4 RESEARCH INSTRUMENT
2.5 SAMPLING TECHNIQUE
2.6 SOURCES OF DATA COLLECTION
2.7 OBJECTIVE OF THE STUDY
2.8 LIMITATION OF THE STUDY
2.9 FUTURE SCOPE

CHAPTER II
RESEARCH METHODOLOGY
Research Methods are the tools and techniques for doing research. Research is
a term used liberally for any kind of investigation that is intended to uncover
interesting or new facts. As with all activities, the rigor with which this activity
is carried out will be reflected in the quality of the results.
Research methods are a range of tools that are used for different types of enquiry,
just as a variety of tools are used for doing different practical jobs, for example,
a pick for breaking up the ground or a rake for clearing leaves. In all cases, it is
necessary to know what the correct tools are for doing the job, and how to use
them to best effect.
2.1 Definition
William C. Emory, in his book ‘Business Research Methods’ defines Research

Methodology as “Any organized enquiry designed and carried out to provide
information for solving problem.”
V. Clover and H. Balsley defined it as “The process of systematically obtaining

accurate answers to significant and pertinent questions by use of scientific
method gathering and interpreting information.”
2.2 TYPES OF RESEARCH
1. Applied and Fundamental:
Research can either be applied (or action) research or fundamental (to basic or
pure) research. Applied research aims at finding a solution for an immediate
problem facing a society or an industrial/business organization, whereas
fundamental research is mainly concerned with generalizations and with the
formulation of a theory. “Gathering knowledge for knowledge’s sake is termed
‘pure’ or ‘basic’ research.”4 Research concerning some natural phenomenon or

relating to pure mathematics are examples of fundamental research. Similarly,

research studies, concerning human behaviour carried on with a view to make
generalizations about human behaviour, are also examples of fundamental
research, but research aimed at certain conclusions (say, a solution) facing a
concrete social or business problem is an example of applied research. Research
to identify social, economic or political trends that may affect a particular
institution or the copy research (research to find out whether certain
communications will be read and understood) or the marketing research or
evaluation research are examples of applied research. Thus, the central aim of
applied research is to discover a solution for some pressing practical problem,
whereas basic research is directed towards finding information that has a broad
base of applications and thus, adds to the already existing organized body of
scientific knowledge.
2. Descriptive and Analytical Research:
Descriptive research includes surveys and fact-finding enquiries of different

kinds. The major purpose of descriptive research is description of the state of
affairs as it exists at present. In social science and business research we quite
often use Research Methodology: An Introduction 3 the term Ex post facto
research for descriptive research studies. The main characteristic of this method
is that the researcher has no control over the variables; he can only report what
has happened or what is happening. Most ex post facto research projects are
used for descriptive studies in which the researcher seeks to measure such items
as, for example, frequency of shopping, preferences of people, or similar data.
Ex post facto studies also include attempts by researchers to discover causes
even when they cannot control the variables. The methods of research utilized
in descriptive research are survey methods of all kinds, including comparative
and correlational methods. In analytical research, on the other hand, the
researcher has to use facts or information already available, and analyze these
to make a critical evaluation of the material.
3. Quantitative and Qualitative:
Quantitative research is based on the measurement of quantity or amount. It is

applicable to phenomena that can be expressed in terms of quantity. Qualitative

research, on the other hand, is concerned with qualitative phenomenon, i.e.,

phenomena relating to or involving quality or kind. For instance, when we are
interested in investigating the reasons for human behavior (i.e., why people
think or do certain things), we quite often talk of ‘Motivation Research’, an
important type of qualitative research. This type of research aims at discovering
the underlying motives and desires, using in depth interviews for the purpose.
Other techniques of such research are word association tests, sentence
completion tests, story completion tests and similar other projective techniques.
Attitude or opinion research i.e., research designed to find out how people feel
or what they think about a particular subject or institution is also qualitative
research. Qualitative research is especially important in the behavioral sciences
where the aim is to discover the underlying motives of human behavior.
Through such research we can analyze the various factors which motivate
people to behave in a particular manner or which make people like or dislike a
particular thing. It may be stated, however, that to apply qualitative research in
practice is relatively a difficult job and therefore, while doing such research,
one should seek guidance from experimental psychologists.
4. Conceptual and empirical research:
Conceptual research is that related to some abstract idea(s) or theory. It is

generally used by philosophers and thinkers to develop new concepts or to
reinterpret existing ones. On the other hand, empirical research relies on
experience or observation alone, often without due regard for system and theory.
It is data-based research, coming up with conclusions which are capable of
being verified by observation or experiment. We can also call it as experimental
type of research. In such a research it is necessary to get at facts firsthand, at
their source, and actively to go about doing certain things to stimulate the
production of desired information. In such a research, the researcher must first
provide himself with a working hypothesis or guess as to the probable results.
He then works to get enough facts (data) to prove or disprove his hypothesis.
He then sets up experimental designs which he thinks will manipulate the
persons or the materials concerned so as to bring forth the desired information.
Such research is thus characterized by the experimenter’s control over the
variables under study and his deliberate manipulation of one of them to study

its effects. Empirical research is appropriate when proof is sought that certain
variables affect other variables in some way. Evidence gathered through
experiments or empirical studies is today considered to be the most powerful
support possible for a given hypothesis. The present study is based upon applied
research.
5. Others:
All other types of research are variations of one or more of the above stated
approaches, based on either the purpose of research, or the time required to
accomplish research, on the environment in which research is done, or on the
basis of some other similar factor. Form the point of view of time, we can think
have research either as one-time research or longitudinal research. In the former
case the research is confined to a single time-period, whereas in the latter case
the research is carried on over several time-periods. Research can be field-
setting research or laboratory research or simulation research, depending upon
the environment in which it is to be carried out. Research can as well be
understood as clinical or diagnostic research. Such research follow case-study
methods or in-depth approaches to reach the basic causal relations. Such studies
usually go deep into the causes of things or events that interest us, using very
small samples and very deep probing data gathering devices. The research may
be exploratory or it may be formalized. The objective of exploratory research is
the development of hypotheses rather than their testing, whereas formalized
research studies are those with substantial structure and with specific
hypotheses to be tested. Historical research is that which utilizes historical
sources like documents, remains, etc. to study events or ideas of the past,
including the philosophy of persons and groups at any remote point of time.
Research can also be classified as conclusion-oriented and decision-oriented.
While doing conclusion oriented research, a researcher is free to pick up a
problem, redesign the enquiry as he proceeds and is prepared to conceptualize
as he wishes. Decision-oriented research is always for the need of a decision
maker and the researcher in this case is not free to embark upon research
according to his own inclination. Operations research is an example of decision
oriented research since it is a scientific method of providing executive

departments with a quantitative basis for decisions regarding operations under

their control.
2.3 Research Design
The conceptual structure within which research would be conducted. The

preparation of such a design facilitates research to be as efficient as possible
yielding maximal information. In other words, the function of research design
is to provide for the collection of relevant evidence with minimal expenditure
of effort, time and money. But how all these can be achieved depends mainly
on the research purpose. Research purposes may be grouped into four categories,
viz.,
1. Exploration
2. Description
3. Diagnosis
4. Experimentation.
A flexible research design which provides opportunity for considering many

different aspects of a problem is considered appropriate if the purpose of the
research study is that of exploration. But when the purpose happens to be an
accurate description of a situation or of an association between variables, the
suitable design will be one that minimizes bias and maximizes the reliability of
the data collected and analyzed.
There are several research designs, such as, experimental and non-experimental
hypothesis testing. Experimental designs can be either informal designs (such
as beforeand-after without control, after-only with control, before-and-after
with control) or formal designs (such as completely randomized design,
randomized block design, Latin square design, simple and complex factorial
designs), out of which the researcher must select one for his own project. The
preparation of the research design, appropriate for a particular research problem,
involves usually the consideration of the following:

1. The means of obtaining the information
2. The availability and skills of the researcher and his staff (if any)
3. Explanation of the way in which selected means of obtaining information will

be organized and the reasoning leading to the selection
4. The time available for research
5. The cost factor relating to research, i.e., the finance available for the purpose.
2.4 Research Instruments
Research Instruments are measurement tools (for example, questionnaires or

scales) designed to obtain data on the research subject. There are four main
types of research data instruments available to market researchers:
1.Questionnaires or Surveys:
For gathering primary research data, surveys are the most commonly used of
the instruments. Although the survey instrument is flexible and relatively
inexpensive, it requires careful attention during development. All surveys
should be pilot tested, at least to some degree, before they are released and
administered to a target sample. The forms that the questions take should be
carefully considered to ensure they perform as expected and that they fit well
into the survey document as a whole. Developing survey questions is both an
art and a science.
2.Psychological Tools:
Three commonly used psychological tools used to collect primary data are
laddering questions techniques, in-depth interviews, and Rorschach-like tests.
3.Mechanical Devices:
Mechanical devices are sometimes used to measure the physiological responses

of research participants to product attributes or advertisements. Generally, what
is measured is interest or emotions in response to what is seen, heard, felt, or
smelled. Mechanical devices used in primary research data collection include

Galvanometers, eye cameras, eye gaze recorders, audiometers, and

tachistoscopes that show an image or ad for a brief flash.
4.Qualitative Measures:
Qualitative measures are becoming more common in primary research as

advanced in technology support different approaches, such as online surveys
enabled by Survey Monkey. Consumers are being turned loose with
sophisticated technology on which they can record their impressions of product
or aspects of their consumer experience.
2.5 Sampling Technique
1. Deliberate sampling
Deliberate sampling is also known as purposive or non-probability sampling.

This sampling method involves purposive or deliberate selection of particular
units of the universe for constituting a sample which represents the universe.
When population elements are selected for inclusion in the sample based on the
ease of access, it can be called convenience sampling. If a researcher wishes to
secure data from, say, gasoline buyers, he may select a fixed number of petrol
stations and may conduct interviews at these stations. This would be an example
of convenience sample of gasoline buyers. At times such a procedure may give
very biased results particularly when the population is not homogeneous. On
the other hand, in judgement sampling the researcher’s judgement is used for
selecting items which he considers as representative of the population. For
example, a judgement sample of college students might be taken to secure
reactions to a new method of teaching. Judgement sampling is used quite
frequently in qualitative research where the desire happens to be to develop
hypotheses rather than to generalise to larger populations.
2. Simple random sampling

This type of sampling is also known as chance sampling or probability sampling
where each and every item in the population has an equal chance of inclusion
in the sample and each one of the possible samples, in case of finite universe,
has the same probability of being selected. For example, if we have to select a

sample of 300 items from a universe of 15,000 items, then we can put the names
or numbers of all the 15,000 items on slips of paper and conduct a lottery. Using
the random number tables is another method of random sampling. To select the
sample, each item is assigned a number from 1 to 15,000. Then, 300 five digit
random numbers are selected from the table. To do this we select some random
starting point and then a systematic pattern is used in proceeding through the
table. We might start in the 4th row, second column and proceed down the
column to the bottom of the table and then move to the top of the next column
to the right. When a number exceeds the limit of the numbers in the frame, in
our case over 15,000, it is simply passed over and the next number selected that
does fall within the relevant range. Since the numbers were placed in the table
in a completely random fashion, the resulting sample is random. This procedure
gives each item an equal probability of being selected. In case of infinite
population, the selection of each item in a random sample is controlled by the
same probability and that successive selections are independent of one another.
3. Systematic sampling
In some instances the most practical way of sampling is to select every 15th
name on a list, every 10th house on one side of a street and so on. Sampling of
this type is known as systematic sampling. An element of randomness is usually
introduced into this kind of sampling by using random numbers to pick up the
unit with which to start. This procedure is useful when sampling frame is
available in the form of a list. In such a design the selection process starts by
picking some random point in the list and then every nth element is selected
until the desired number is secured.
4. Stratified sampling
If the population from which a sample is to be drawn does not constitute a

homogeneous group, then stratified sampling technique is applied so as to
obtain a representative sample. In this technique, the population is stratified into
a number of non overlapping subpopulations or strata and sample items are
selected from each stratum. If the items selected from each stratum is based on
simple random sampling the entire procedure, first stratification and then simple
random sampling, is known as stratified random sampling.

5. Quota sampling
In stratified sampling the cost of taking random samples from individual strata
is often so expensive that interviewers are simply given quota to be filled from
different strata, the actual selection of items for sample being left to the
interviewer’s judgement. This is called quota sampling. The size of the quota
for each stratum is generally proportionate to the size of that stratum in the
population. Quota sampling is thus an important form of non-probability
sampling. Quota samples generally happen to be judgement samples rather than
random samples.
6. Cluster sampling and area sampling
Cluster sampling involves grouping the population and then selecting the groups
or the clusters rather than individual elements for inclusion in the sample.
Suppose some departmental store wishes to sample its credit card holders. It has
issued its cards to 15,000 customers. The sample size is to be kept say 450. For
cluster sampling this list of 15,000 card holders could be formed into 100
clusters of 150 card holders each. Three clusters might then be selected for the
sample randomly. The sample size must often be larger than the simple random
sample to ensure the same level of accuracy because is cluster sampling
procedural potential for order bias and other sources of error is usually
accentuated. The clustering approach can, however, make the sampling
procedure relatively easier and increase the efficiency of field work, especially
in the case of personal interviews. Area sampling is quite close to cluster
sampling and is often talked about when the total geographical area of interest
happens to be big one. Under area sampling we first divide the total area into a
number of smaller non-overlapping areas, generally called geographical clusters,
then a number of these smaller areas are randomly selected, and all units in these
small areas are included in the sample. Area sampling is especially helpful
where we do not have the list of the population concerned. It also makes the
field interviewing more efficient since interviewer can do many interviews at
each location.
7. Multi-stage sampling

This is a further development of the idea of cluster sampling. This technique is

meant for big inquiries extending to a considerably large geographical area like
an entire country. Under multi-stage sampling the first stage may be to select
large primary sampling units such as states, then districts, then towns and finally
certain families within towns. If the technique of random-sampling is applied at
all stages, the sampling procedure is described as multi-stage random sampling.
8. Sequential sampling
This is somewhat a complex sample design where the ultimate size of the
sample is not fixed in advance but is determined according to mathematical
decisions on the basis of information yielded as survey progresses. This design
is usually adopted under acceptance sampling plan in the context of statistical
quality control.
2.6 Sources of data collection
There are two sources of data collection- Primary and Secondary. These
collection methods are explained below-
Primary Data
Primary data are information collected by a researcher specifically for a research

assignment. In other words, primary data are information that a company must
gather because no one has compiled and published the information in a forum
accessible to the public. Companies generally take the time and allocate the
resources required to gather primary data only when a question, issue or
problem presents itself that is sufficiently important or unique that it warrants
the expenditure necessary to gather the primary data. Primary data are original
in nature and directly related to the issue or problem and current data. Primary
data are the data which the researcher collects through various methods like
interviews, surveys, questionnaires etc. The primary data have own advantages
and disadvantages:
Advantages of primary data:
Advantages of primary data are as follows:

1. The primary data are original and relevant to the topic of the research study
so the degree of accuracy is very high.
2. Primary data is that it can be collected from a number of ways like interviews,
telephone surveys, focus groups etc.
3. It can be also collected across the national borders through emails and posts.
4. It can include a large population and wide geographical coverage.
5. Moreover, primary data is current and it can better give a realistic view to the
researcher about the topic under consideration.
6. Reliability of primary data is very high because these are collected by the
concerned and reliable party.
Disadvantages of primary data:
1. For collection of primary data where interview is to be conducted the

coverage is limited and for wider coverage a more number of researchers are
required.
2. A lot of time and efforts are required for data collection. By the time the data
collected, analysed and report is ready the problem of the research becomes very
serious or out dated. So the purpose of the research may be defeated.
3. It has design problems like how to design the surveys. The questions must be
simple to understand and respond.
4. Some respondents do not give timely responses. Sometimes, the respondents

may give fake, socially acceptable and sweet answers and try to cover up the
realities.
5. With more people, time and efforts involvement the cost of the data collection
goes high. The importance of the research may go down.
6. In some primary data collection methods there is no control over the data
collection. Incomplete questionnaire always give a negative impact on research.

7. Trained persons are required for data collection. Inexperienced person in data
collection may give inadequate data of the research.
Secondary Data
Secondary data are the data collected by a party not related to the research study
but collected these data for some other purpose and at different time in the past.
If the researcher uses these data then these become secondary data for the
current users. These may be available in written, typed or in electronic forms.
A variety of secondary information sources is available to the researcher
gathering data on an industry, potential product applications and the market
place. Secondary data is also used to gain initial insight into the research
problem. Secondary data is classified in terms of its source – either internal or
external. Internal, or in-house data, is secondary information acquired within
the organization where research is being carried out. External secondary data is
obtained from outside sources. There are various advantages and disadvantages
of using secondary data.
Advantages of Secondary Data:
1. The primary advantage of secondary data is that it is cheaper and faster to

access.
2. It provides a way to access the work of the best scholars all over the world.
3. It gives a frame of mind to the researcher that in which direction he/she should
go for the specific research.
4. It saves time, efforts and money and add to the value of the research.
Disadvantages of Secondary data:
1. The data collected by the third party may not be a reliable party so the
reliability and accuracy of data go down.
2. Data collected in one location may not be suitable for the other one due
variable environmental factor.

3. With the passage of time the data becomes obsolete and very old.
4. Secondary data collected can distort the results of the research. For using
secondary data a special care is required to amend or modify for use.
5. Secondary data can also raise issues of authenticity and copyright.
2.7 Objectives of the study
1. To understand the frequency of usage and the problem faced while using e-
payment.
2. To know the opportunities and challenges of e-payment system in India.
3. To identify how online payment system work.
4. To know the different modes of e-payment.
5. To fulfil the financial requirements of the business.
6. To find out whether India going cashless has helped our citizen.
7. To analyse the impact of customers education on usage of e-payment.
2.8 Limitation of the study
➢ The sample size was limited to 100 respondents.
➢ The sample was taken from the population residing in Mumbai only. The
results are not applicable to the whole world.
➢ The paucity of time and resources was a major constraint.

➢ My research is biased towards citizens in the metropolitan and urban region

and not the rural areas.
➢ The class of people is limited as it does not include people from the lower
income level.
➢ The limited knowledge of the respondents regarding the topic may hamper
the true conclusion of the study.
➢ Being an opinion survey, a lot of subjectivity is involved in the study.
2.9 Future scope
Throughout our experience researching online payment systems we have

learned about many recent trends and new technologies involving these systems,
such as using PayPal, or using Safety Pay’s Online Cash Payment Platform.
We have researched and discovered that credit and debit cards will become
obsolete, because we see the increasing development of mobile technology and
the internet industry.

CHAPTER III
REVIEW OF LITERATURE
Mohammad Auwal Kabir, Siti Zabedah Saidin, Aidi Ahmi School of

Accountancy, University Utara Malaysia(2016)1, E-payment system is
increasingly becoming a daring means of payments in today’s business world.
This is due to its efficiency, convenience and timeliness. It is a payment system
that is continuously being embraced and adopted in the financial system of both
developed and developing countries with a view to simplify and ease payments
in business transactions. As a result, many studies were conducted around the
globe by scholars on e-payment adoption. It is based on this that this research
paper looks at the available past literature on e-payment adoption across the
world, with a view to highlight the scope, methodology and Information System
(IS) models used by previous researchers so as to identify research gaps and
recommend such for future studies. The study employed an extensive literature
search on e-payment adoption with the aid of Google Scholar for those recent
studies between the years 2010-2015. To facilitate the understanding of the
issue under study, previous studies were analysed based on scope-geographical
location of the study, theories/models adopted and methodology used. Finally,
the paper has identified the patterns of previous researches with regards to these
three items and further highlights and recommends key areas in which future
research should delve on.
Jansen-Vullers, and Reijers (2004)2, Expressed that little research focused on

the relationship between business process and successful adoption of electronic
commerce by using credit cards and it was this seamless integration that would
help in growth of e-commerce. A powerful yet user friendly ecommerce system
blended with business process would work wonders.
Muddassir Masihuddin, Burhan Ul Islam Khan2, M. Mueen Ul Islam

Mattoo and Rashidah F. Olanrewaju (2016)3, his paper is aimed at

investigating and increasing awareness about various concepts related to

Electronic Payment Systems (EPS) including its advantages, challenges and
security considerations. The proposed study also evaluates the adoption of e-
payment systems and the resulting impact on economy of a nation.
Methods/Statistical Analysis: In this paper, a comprehensive survey on all the
aspects of electronic payment was conducted after analysis of several research
studies on online payment systems. The most recent references and information
have been explored in order to gain significant information about electronic
payments systems. Findings: From the study conducted, it can be elucidated that
despite various issues that usage of electronic payment systems pose, these are
identified as a positive step towards the economic development of a nation.
Nevertheless, its full potential can be realized only by raising its awareness
among people. Applications/Improvements: With the advancement in
technology and popularity of Internet, the perception of making online
transactions is bound to gain momentum. In the future, the payment modes
currently used and supported shall see a declining trend owing to the numerous
benefits offered by electronic payment systems.
Rochet and Tirole (2003)4 They did analysis about factors affecting growth of
business which hold good for online business industry also and business in the
perspective of two-sided platform market where buyers and sellers interacted
through a common platform. Success for new platform entrants was determined
by getting both sides of the market to participate - the traditional chickenand-
egg problem. New entrants might also adopt a variety of pricing strategies and
pricing levels to optimize revenues and these might also determine uptake and
structure of the new payment system. Furthermore, there could be resistance to
change in the supporting infrastructure network because large, long-term
investments and sunk costs were necessary for a stable and reliable
infrastructure.
Mantel and McHugh (2001)5 , Discussed some of the drivers and impediments
to the development of new online payment systems. Three different approaches

could be taken to the development of consumer online payment markets. One

approach emphasized that there were significant institutional, design,
competition and/or customer irrationality challenges that might require public
sector involvement. A second suggested that market forces would allow
development of an optimal payment market as long as efficient solutions were
identified by consumers, merchants and financial providers and steps towards
their implementation clearly planned, i.e. efficient co-ordination among all
market participants was necessary which was also discussed by Caskey and
Sellon (1994). A third approach argued that markets were efficient and that as
a consequence optimal results could be achieved even without co-ordination,
despite network effect.
Laudon & Traver (2002)6, According to Laudon & Traver e-commerce

enriched business-to- business relationships, eliminating inventory, operational
and distributional costs that indirectly provide customers with lower prices. E-
commerce could help businesses to increase production flexibility by ensuring
timely availability of components from suppliers, to improve quality of the
products by increasing cooperation between buyers and sellers and reducing
quality issues, to increase opportunities for collaborating with suppliers and
distributors, and to create greater price transparency — the ability to see the
actual prices on the market. In this way e-commerce responded to the customer
demand of lower prices and greater convenience.
Tarandeep K. Singh, N. Supriya, M. S. P. Joshna (2016)7, E-commerce

(electronic commerce or EC) is the buying and selling of goods and services, or
the transmitting of funds or data, over an electronic network, primarily the
Internet. These business transactions occur business-to-business, business-to-
consumer, consumer-to-consumer or consumer-to-business. The success of
electronic commerce depends upon effective electronic payment systems. The
Internet and on-line businesses are growing exponentially. Due to this explosive
growth, electronic commerce on the Internet uses various electronic payment
mechanisms that can cater for much diversity of applications. Electronic
payments are financial transactions made without the use of paper documents

such as cheques. Electronic payments include debit card, credit card, smart card,
e-wallet, e-cash, electronic cheques etc. E-payment systems have received
different acceptance level throughout the world; some methods of electronic
payments are highly adopted while others are relatively low. The present paper
is focused on the issues and challenges in e payment and to examine the
problems faced by consumers during e -payments.
Abrazhevich (2001)8 , He pointed out many factors which determine the

success of electronic payment system. In his effort to classify and describe the
requirements and characteristics of payment systems, he observed that the main
features an electronic payment system should possess are reliability, efficiency,
scalability, security, multi-currency, privacy, interoperability, authorization
type, applicability, convertibility, traceability, as well as trust and usability.
With the aim of reducing long bank queues, increasing efficiency and
convenience of financial transactions, electronic payment system has been
integrated into various types of electronic cards.
Malek and Ferguson (2015)9, They have addressed the problems of perception
of technological innovations in e-payment systems. Although information
technology has had a positive effect on e-payment system growth, it has left
considerable security and usability problems to be solved in order to render it
more effective and reliable.
Krantee Jamdaade, Hetal Champaneri(2015), In this paper we review a

secure e-payment system for online transaction. The e-payment system is to be
securing fore-transaction included participants such as Payment gateway, Bank
and Merchant. Electronic payment system is the online processing of
exchanging information between included participants. Basically the main goal
of e-payment system is to perform transaction from anyway as well as for fast
processing rather than manual. The electronic payment process gives a way to
do online transaction for doing activities such as placing order, money transfer,

etc.
Khairul Rijal (2018), he best achievement of zakat institutions in carrying out

their duties as an organization is strongly influenced by several strategies of use
in the latest technology in the current era. This statement is supported when we
see some information dissemination, with various types of payment tools that
can convert manual systems into online and electronic systems. Payment is the
heart of business. For online businesses, electronic payments (E-payments) play
an important role to accelerate every transaction of institutions. As we all know
that there are various types of electronic payment systems available to facilitate
online buying and selling transactions. This research will describe the current
performance status of the National Zakat Agency website (BAZNAS) as well
as identify several factors that contribute to improvement through analysis of
survey results. The development website process often faces many difficulties
that need to be addressed. Various important elements must be discussed to
serve input that is useful for the webmaster as well as the institution itself so
that it will make the website more effective as expected by the provider and
recipient of information. Then this study tries to identify the type of electronic
payment system in BAZNAS one of the Islamic philanthropic institutions in
Indonesia and focuses on some background of the development of BAZNAS
institutions, which have been preceded by an explanation of the duties and
responsibilities of this zakat institution as the coordinator of zakat institutions
in Indonesia. Then analyze the performance of electronic payments at the
institution. The results of this study are expected to contribute to the body of
knowledge, especially in terms of information technology and performance
measurement in Islamic philanthropic institutions.
Niousha Dehbini, Masoud Birjandi, Hamid Birjandi (2015), Many factors

affect the way that information technology is used in societies and organizations.
In this research, the researcher has aimed to analyze the factors affecting the
adoption of electronic payment cards in urban micro-payments. This research is
based on six hypothesis, analyzing the relationship between the adoption of
electronic payments cards andsome factors such as satisfaction, compulsion,

ease of use, usefulness, norms and network externality. Data analysis has been
done by the SPSS software. In this research, researcher has used non-probability
random sampling, the means of this research was the questionnaire, after
interviewing with the citizens, factors affected the adoption of electronic
payment cards in urban micro-payments were explained. The questionnaire
included close-ended questions based on Likert scale with 5 sets of 28 questions.
The reliability and validity of the questionnaire showed that the questionnaire
has acceptable reliability and validity. From 450 questionnaires,421 of them
were returned back to the researcher. Data analysis has been done on two levels
of descriptive and inferential analysis. The participants were citizens of shiraz
who were over eighteen years old and who use this card in their payments. The
results of this research revealed that all of these 6 factors on the acceptance of
electronic payment cards in urban micro-payments are a significant impact on
the citizens payments. Prioritization of these factors is as follows: usefulness,
ease of use, satisfaction, compulsion, network externality and norms. Key w
ords: adoption, electronic payments cards, micropayments.
Sajad Cheraghi, Abdolla Mahmoodi, Hassan Nazari(2015), The purpose of

this study was to examine the relationship between perceived risks of customers
in electronic payment method and e-commerce in the Agricultural Bank of West
Azerbaijan. For this purpose, the perception of risk clients is considered
according to Peter and Tarpi theory (2007) in five dimensions as (physical risk,
performance risk, psychological sociological risk, financial risk and the risk of
wasting time) and the electronic commerce was operationally definite in 10
indexes based on the theory of Vladislav& et al (2010). Research population
consists of customers with Mehr account in Agricultural Bank of West
Azerbaijan which is 33600 persons. A sample size of 384 was selected based on
Cochran formula. Data collection tool was a researcher-made questionnaire
consisted of 15 questions about customers' risk perceptions and 10 questions of
e-business. The validity and reliability, and ensuring were placed in the
sample.Statistical analysis of collected data is done by using statistical
descriptive method and Kolmogorov-Smirnov test is used for normality of
statistical society, also the correlation coefficient is used to investigate the

correlation, and finally multivariate and one-variable regression models were

used to test values of hypothesis. The results suggest the relationship between
perceived risk of customers in electronic payment method, physical risk,
performance risk, psycho sociological risk, financial risk and the risk of wasting
time with e-commerce in the Agricultural Bank of West Azerbaijan. Keywords
perception of risk, electronic commerce, operational risk, financial risks.
Anshu Premchand, Anurag Choudhry (2015) In the modern society, no

economic activity is possible without payments and settlements. In this sense,
it could probably be said that payment systems are one of the most imperative
and significant social infrastructures that we have. E-Payments are an
increasingly important part of payment systems. They allow for quick
international connectivity in the payments world. E-Payment can be looked as
a panacea for most ills in payment world, if not all - financial inclusivity for
unbanked, fast across the world transactions, safety and security of payments
and cost savings over traditional payment systems. In this paper, we look at e-
Payments, what they entail and basic payments infrastructure. We also look at
the future of e-Payments as well as challenges and recommendations for e-
Payment systems of tomorrow. In the next paper we will deep dive into the
recommendations for e-Payments.
The authors S. Kowsalya, Swetha Krishnan, R, Sowmya, (2017), In this

paper ‘A Study on the Perception of Customers towards E-Commerce and E-
Payments in local Survey’. mentioned that the trust in Ecommerce mainly
depends upon the online payment system which allows a customer to make
payment to the online merchant or service provider. Consumers are becoming
more and more comfortable in making online transactions and are concerned
about conducting electronic business transactions and the risks involved that
have a vital impact on the transition of electronic business. Increasingly more
consumers are migrating to e-commerce to make electronic bill payments, to
pay for information online, to purchase products, services. According to the
authors E-Payments refers to the technological breakthrough that enables us to

perform financial transactions online, thus avoiding hindrances and other

hassles. E-Payments provides greater freedom to individuals in paying their
taxes, licenses, fees, fines and purchases at unconventional locations and at
whichever time of the day, & 365 days of the year. The authors found that credit
and debit cards will become obsolete, because they saw the increasing
development of mobile technology and the internet industry.
Ashutosh Pathak (2015), Mentioned that the reliable and cashless payment
system offers immunity against theft of paper and e-money, and adopting e-
payment solutions or systems for different reasons. In addition to cost reduction,
reference was made to a number of other benefits, including improved customer
service, improved working capital, increased operational efficiencies and cycle
times, processing efficiencies and enhanced compliance to organizational
policies and procedures. This study also states that online e-payment provides
greater reach to customers. Personal attention can be given by bank to customer
also quality service can be served. Various strengths of e-payment systems such
as quality customer service, greater reach, time saving customer loyalty, easy
access to information, 24 hours access, reduce paper work, no need to carry cash
easy online applications etc.
From this paper ‘The Future of the Mobile Payment as Electronic Payment
System’ the author Zlatko Bezhovse (2016), states that with all the security
and convenience provided by mobile electronic payment method, we can expect
further growth of mobile payments worldwide even surpassing payments made
by credit and debit cards. However, there are several barriers identified to the
adoption of this payment method; so certain measures should be taken to grant
this industry a promising future ahead. This study finds that customers are
increasingly using mobile payment methods for their routine online purchases
and for their on-site purchases as well. With growing advanced technology that
supports mobile transactions and makes them transparent and more convenient,
consumers have developed their trust and habits on using mobile payment

systems. Enhancing the compatibility with a wide range of users, the use of
latest technology and establishment of common standards for various service
providers, and overcoming the security and privacy issues could help in
facilitating faster adoption of electronic payment methods and advance the
rising market of mobile payments.
CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
4.1 Profile of respondents
4.2 Analysis of questionnaire

CHAPTER lV
Question 1: What is your age ?
Table 4.1
AGE NUMBER OF RESPONDENT
18-29 years 94
30-39 years 5
40-49 years 1
50-59 years 0
60 years and above 0
Chart 4.1

NO OF RESPONDENTS
0%
5% 1%
0%
18-29 YEARS
30-39 YEARS
40-49 YEARS
50-59 YEARS
60 YEARS AND ABOVE
94%
Analysis:
Most of the respondents who were surveyed are in the age group of 18-29
years (94%), followed by respondents in the age group of 30-39 years (5%) .
The least percentage of respondents are in the age group of 40-49 years (1%).
Question 2 : what is your educational qualification?
Table 4.2
EDUCATIONAL QUALIFICATION NO OF RESPONDENT
Under graduate 68
Only graduate 22
Post graduate 8
Sessional qualification 2
Other 0
Chart 4.2

NUMBER OF RESPONDENTS
0%
8% 2% under graduate
only graduate
22%
post graduate
sessional qualification
68%
other
Analysis :
Out of 100 respondent 68% are undergraduates ,followed by the respondent in

only graduate are 22% and in post graduate there are 8%.The least percentage
of educational qualification is other with 2%.
Question 3 : what is your employment?
Table 4.3
EMPLOYMENT NUMBER OF RESPONDENT
Student 72
Self employed 18
private organisation 7
government organisation 1
Homemaker 1
Other 1
Chart 4.3

NO OF RESPONDENTS
Student
Self employed
1%
1%
1%
16%
Employed in a private
organisation
16% Employed in a government
65% organisation
Home maker
Other
Analysis:
majority of the respondents are students (72%), it signifies how the youth is
concerned about e-payment and managing their money seriously. Following
closely are respondents belonging to a self employed (18%) and employed in a
private organisation(7%). Least percentage of respondents are employed in
government organisation, homemaker, and other (3%).
Question 4: what is your income?
Table 4.4
INCOME NUMBER OF RESPONDENT
Under Rs5 Lakhs p.a 56
Rs5-10 Lakhs p.a 33
Rs10-20 Lakhs p.a 8
Rs20-30 Lakhs p.a 2
Rs30 Lakhs and above 1

Chart 4.4
NO OF RESPONDENTS
1%
8% 2% Under Rs 5 Lakhs p.a
RS 5-10 Lakhs p.a
RS 10-20 Lakhs p.a
33% 56%
RS 20-30 Lakhs p.a
RS 30 Lakhs and above
Analysis:
Majority of the respondents earn an income of under 5 lakhs p.a. (56%),

followed by incomes by other is (33%) and 5-10 lakhs p.a. (8%). Least
percentage of respondents earn an income between 20-30 lakhs p.a. (2%) and
above 30 lakhs p.a. (1%).
Question 5: How often do you use cash ?
Table 4.5
PARTICULAR NUMBER OF RESPONDENT
Daily 65
Weekly 17
Monthly 14
Yearly 3
Never 1

Chart 4.5
NO OF RESPONDENTS
7%2% 19% Daily

Weekly
33% Monthly
Yearly
39% Never
Analysis:
Majority of the respondent use cash (65%) on daily basis whereas (14%) of
Respondents use cash on monthly basis, followed by (17%) of respondents use
cash on weekly basis. (1%) of respondents use cash on yearly basis whereas
(3%) of respondents has never use cash.
Question 6: What is your go-to payment option ?
Table 4.6
PARTICULAR NO OF RESPONDENT
Card 15
Cash 57
Cheque 3
Electronic bank transfer 3
Mobile payment 18

Paypal 0
Other 4
Chart 4.6
Column1
Card
4% 9%
0%
Cash
20%
Cheque
3% Electronic bank transfer

3%
Mobile payment
61% Paypal
other
Analysis:
Majority of the respondents make payments by cash (57%) ,followed by (18%)

of respondents make payments by mobile payment app and (15%) of
respondents make payments by card . The least percentage of respondents make
payments by cheque, electronic bank transfer and others .
Question 7: What are the reason for choosing e-payment system ?
Chart 4.7

Chart Title
63
45
23
8 10 4
CONVENIENCE SAFE AND LOW SERVICE PRIVACY EASY TO OTHER

SECURE CHARGE MAINTAIN E-
PAYMENT
TRANSACTION
NO OF RESPONDENTS Column1 Series 3
Analysis:
Out of 100 respondents , (63%) respondents choose e-payment because of

convenience , (45%) respondents choose because of safe and secure, (23%)
respondents choose e-payment because it is easy to maintain e-payment
transaction, (10%) respondents feels that it is private . Whereas (8%)
respondents choose e-payment system because it has low service charge.
Question 8 : E-payment system saves your time and money ?

Table 4.7
Agree 56
Strongly agree 30
Neutral 6
Disagree 8
Strongly disagree 0
Chart 4.8
NO OF RESPONDENTS
8%0%
6% Agree
Strongly agree
Neutral
30% 56%
Disagree
Strongly disagree
Analysis :
Out of 100 respondents (56%) respondents agree that e-payment saves time and
money and (30%) respondents strongly agree to it . Whereas (8%) respondents
disagree that e-payment saves time and money . (6%) respondents are neutral.
Question 9: E-payment system can be easily understood and readily

adopted ?

Table 4.8
Agree 65
Strongly agree 14
Neutral 12
Disagree 9
Strongly disagree 0
Chart 4.9
9%0%
Agree
12%
Strongly agree
Neutral
14%
65% Disagree
Strongly Disagree
Analysis:
Majority of the respondents (65%) agrees the e-payment system can be easily
understood and readily adopted and (14%) respondents strongly agree to it.
Whereas (12%) respondents are neutral about it. (9%) respondents disagree that
e-payment system can be easily understood and readily adopted.
Question 10 : If you are trying to avoid unnecessary spending in general,

which of the following payment method would you avoid using?

Table 4.9
Cash 34
Debit card 28
Credit card 19
Mobile payment app 17
Other 2
Chart 4.10
2%
17% Cash
34% Debit card
Credit card
19%
Mobile payment app
Other
28%
Analysis:
Out of 100 respondents , 34 respondents will avoid using cash , 28 respondents

will avoid using debit cards, 19 respondents will avoid using credit card , 17
respondents will avoid using mobile payment app and 2 respondents will avoid
using other methods.

Question 11 : what are the major barriers of e-payment ?
Chart 4.11
Chart Title
43
21
18
13 12
5 8
NO BARRIERS DON'T TRUST DON'T LIKE FINDING INCONVIENT DOES NOT OTHER
BANK TO ENTER TECHNOLOGY PROVIDE ALL
SECURITIES DATA DIFFICULT SERVICE
DIGITALLY
NO OF RESPONDENT Column1 Column2
Analysis :
Around 100 people asked to fill the questionnaire out of which majority of
respondents (43%) feels that there is no barriers in e-payment, (21%)
respondents feels that they don't like to enter data digitally, (18%) respondents
do not trust bank security , (12%) respondents feels that e-payment system does
not provide all service (example cheque deposit). Whereas (5%) respondents
feels that e-payment is inconvenient.

Question 12: what are the security measures that could secure you against,
various kinds of e-payment attacks?
Chart 4.12
Chart Title
58
29
24
19 20
5
SELF INSTALLING LIMITING USER UPDATING OTHERS

AWARENESS IN ANTI- ONLINE EDUCATION LEVEL OF
SECURITY MALICIOUS ACTIVITIES ONLINE
SOFTWARE BANKING
SECURITIES
NO OF RESPONDENTS Column2 Column1
Analysis:
Out of 100 respondents ,(58%) respondents thinks that self awareness in

security Can secure from e-payment attacks, followed by (29%) respondents
feels that user education, (24%) respondents believe in updating level of
banking securities . Whereas (20%) and (19%) respondents thinks that limiting
online activities and installing anti-malicious software can secure against e-
payment attacks.

Question 13 : E-payment offers a greater choice for consumer and

merchant in the way they send and receive payment ?
Table 4.10
Agree 65
Strongly agree 12
Neutral 12
Disagree 10
Strongly disagree 1
Chart 4.13
NO OF RESPONDENTS
10%1% Agree
12% Strongly agree
Neutral
12%
65% Disagree
Strongly Disagree
Analysis:
Majority of the respondents (65%) agrees that e-payment offers a greater choice
and (12%) respondents strongly agree to it. whereas (12%) respondents are
neutral and (10%) respondents disagree to it . The least percentage of
respondents (1%) strongly disagree that e-payment offers a greater choice.

Question 14 : What is your biggest concern about e-payment?
Table 4.11
Security 56
Poor internet 14
Merchant acceptance 12
Cost 10
Lack of technology know how 7
Others 1
Chart 4.13
NO OF RESPONDENTS
7%1% Security
10% Poor Internet
Merchant acceptance
12%
56% Cost
14% Lack of technology know how

Other
Analysis:
Majority of the respondent (56%) feels that security is the biggest concern about
e-payment, (14%) respondents thinks that poor internet, (12%) respondent
thinks that merchant acceptance. while (10%) respondent feels that lack of

technology know-how is the biggest concern about e-payment. whereas (10%)

respondent thinks that cost is the biggest concern.
Question 15 : Do you conduct personal financial transactions online such

as household bills, purchases or service online?
Table 4.12
PARTICULARS NUMBER OF RESPONDENT
Not at all 13
A little 47
Somewhat 20
A lot 20
Chart 4.14
NO OF RESPONDENT
20% 13%
Not at all
A little
Somewhat
20%
47% A lot
Analysis:

Majority of respondent (47%) conduct personal financial transaction online,

followed by (20%) respondents conduct a lot and somewhat personal financial
transactions. Whereas (13%) respondents do not conduct financial transactions
online.

CHAPTER V
FINDINGS, CONCLUSION AND SUGGESTIONS
5.1 FINDING OF THE STUDY

5.2 CONCLUSION OF THE STUDY
5.3 SUGGESTIONS OF THE STUDY

FINDINGS
• The findings can be drawn on the basis of data analysis as following :-

• The usage of no-frill cashless instrument debit cards should be
encouraged. In order to educate people on the advantages of debits cards
over cash. RBI should organize focused financial education campaigns
among merchants and cardless.
• The government may also consider promoting card based cashless
payments by reducing VAT imposed on consume who pay through pay
cards.
• Given the cost and risks involved in handling cash, bank, need to
favdurably price electronic products and a situation where electronic
products are costlier than paper products should not rise. Thus, to glide
through from cash based to card based products our analysis suggests
the debit card payment.
• There is a need for RBI to subsidize switch charges, to promote cashless
payments.
• The path to cashless has three important and basic (MIN, henceforth)
components –mandatory, incentives and networks.
• The role of the Government is prominent in all the three cases. It can
make certain nature of payments to be made by cashless instruments
mandatory.
• These can be easily achieved for instruments that involves paying
directly to the Government for certain goods and services (say Passport
fees, tax payment, payment to railways, PDS, State electricity Boards or
to National airlines etc) or where the Government pays (salaries, various
schemes like MNREGS, other cash transfer schemes). However, given
that enforcing such mandatory requirements are difficult for transactions
that involve two private parties (say household and retailers), an
incentive scheme will work better. These incentives need to be given to

one party to carry the cashless transactions. Finally, for a cashless

system to be a long run equilibrium, a critical size of the network.
• It is important to note that the bottlenecks identified so far has two
prominent things. One is the lack of acceptability and the other is high
transaction costs. Therefore, our recommendations must keep these two
facets and should be consistent in removing at least one constraint for
each consumption sector.
• it is worthwhile to note that, even if these two constraints were to be
removed, cashless transactions will not be automatic. For example, let
us construct an extreme scenario. Say, in city X, the Government decides
to incentivize a group of retail outlets to accept cashless payments as
well as removes all transaction costs. Even in this scenario, cashless
transactions may not readily pick up as individuals may not want to keep
financial footprints of their transactions if done cashless. This is
primarily because, some amount of tax avoidance is possible if the
transaction has no footprints. Therefore, apart from ensuring
acceptability and low cost, it is vital that the need to address the issue of
financial footprints is taken. Our recommendations are in sync with
these observations.
• The framework for recommendation must eventually address the 5 A’s
of promoting financial inclusion through cashless payment instruments.
These are availability, accessibility, acceptability, affordability and
awareness.
▪ Availability combines the notion of a level playing field for the service
providers along with the availability of choice of products for the
consumer.
▪ Accessibility as a concept should be the cornerstone to expand the reach
of the banking systems and the various payment products to all the
sections of the society including the ‘aam aadmi’ as part of the financial
inclusion plans and efforts.
▪ Acceptability is the thought process which enables both the households
as well as the enterprises to embrace the newer products and technology.

▪ Affordability is a key corner stone which should guide the product

offering as being value for money for the households and enterprises
with technology. To ensure this, atleast at the initial stages various
discounts have to be in place. and innovation being the important drivers
for providing cost effective and quality services by the service providers.
▪ Awareness- Creating awareness through financial literacy campaigns is

necessary to increase the volumes in the payments business.

CONCLUSION
Technology has arguably made our life easier. One of the technological
innovations in banking, finance and commerce is the Electronic Payments.
Electronic Payments (e-payments) refers to the technological breakthrough that
enables us to perform financial transactions electronically, thus avoiding long
lines and other hassles. Electronic Payments provides greater freedom to
individuals in paying their taxes, licenses, fees, fines and purchases at
unconventional locations and at whichever time of the day, 365 days of the year.
After analysis and comparison of various modes of electronic payment systems,
it is revealed that it is quite difficult, if not impossible, to suggest that which
payment system is best. Some systems are quite similar, and differ only in some
minor details. Thus there are number of factors which affect the usage of e-
commerce payment systems. Among all these user base is most important.
Added to this, success of e-commerce payment systems also depends on
consumer preferences, ease of use, cost, industry agreement, authorization,
security, authentication, non-refutability, accessibility and reliability and
anonymity and public policy.
The Reliable and Cashless payment system offers immunity against theft of
paper and e-money, and adopting e-payment solutions or systems for different
reasons. In addition to cost reduction, reference was made to a number of other
benefits, including improved customer service, improved working capital,
increased operational efficiencies and cycle times, processing efficiencies and
enhanced compliance to organizational policies and procedures .This
opportunities e-payment operation increases different levels of risks for
marketing. More than ten Years of Internet marketing research have yielded a
set of important findings. Based on our review of these findings, it is clear that
the Internet is playing a more and more important role in the field of e-payment.

Peoples are becoming aware of the need to measure the collaborative

effects of e-payment The study reveals that the peoples were not aware and
educated. They have not any knowledge of e-payment. The study is based on
survey .The respondent have to answer the questions on their own. Some people
satisfy with our views. But some peoples are not satisfies with us. This study
states that Online e-payment provides greater reach to customers. Feedback can
be obtained easily as internet is virtual in nature. Customer loyalty can be gain.
Personal attention can be given by bank to customer also quality service can be
served. We came to know various strengths of e-payment System such as quality
customer service, greater reach, time saving, customer loyalty, easy access to
information, 24 hours access, reduce paper work ,no need to carry cash easy
online applications etc.
The organisations are trying their level best to attract the consumers towards
using their e-commerce and payment platforms to increase their business, but
there have been always a hitch in consumers mind regarding the security and
privacy. For sustainable growth it is important for the organisations to consider
various technologies to overcome the consumer’s concerns. Technologies like
block chains are replacing the expensive, unproductive accounting and payment
systems of the financial industry, it can also be used to improve efficiency of
regulatory compliance procedures and save on the back-office costs, etc.
Biometric it is an advancement of e-payment technologies, many consumers
usually forget the password or get scared to share the pin number, so biometric
along with Internet of Things and Artificial Intelligence (AI) will help
consumer authenticate the purchase or bill payments through the finger print or
a retina scan and also detect online fraud. This will help the consumers to build
up the confidence and also improve user interface experience.
These are few technologies that can be used to enhance the consumer’s online
e-payment experience. WhatsApp using Unified payments Interface (UPI)
implementation where the user just select the WhatsApp contact, enter the
amount followed by the four-digit UPI pin and the funds will be transferred.
Many organisations tie-up with already existing payment gateways that have
already built trust.


SUGGESTIONS
➢ The suggested that the government should bear the charges regarding
mode of payment like cashless transaction at airlines, hotels, shopping
malls and other private e-payment business establishment and people
illiterate of cashless transactions.
1. This is to encourage the public to go cashless. It also suggested to
give concessions to encourage net banking, e-payment, e-wallet, paytm,
another alternative etc.
2. The other suggestion include –heavy transactions of revenue, excise,
departments should the made through net banking NEFT, RTGS
swiping machines should be supplied to all vat dealers to accept card
based cashless payment market yard and cooperative societies should
make online payment to farmers accounts cooperative societies should
sell goods to farmers through cashless payments.
3. All ration shops milk sellers and other should accept mobile payments.
Coupons and mobile payment system should be introduced at Bazaars,
special point of sale machines and apps should be introduced for law
cash transactions like vegetables provisions.
4. Payments for gas cylinders should be made through online only.
5. The government made a task force to suggested people helps in all
districts to solve the public problem and the public should the
enlightened about online mobile and cashless payments.
6. It saves the government substantial costs in printing and circulation
of currency notes.
7. Increased liquidity of many with the banks makes then lower their
interest rates puts the huge amounts of cash deposited with then to some
production use.
8. There is a need to intensify the public Inlightement programme
about the e-Payments system to that everybody will be acquaninted with

the system before its nation-wide introduction since it will affect

everybody.
9. Since there is a high rate of illiteracy and all people must be brought
into the system, the government should design special enlightenment
Programmes for the non-literates using probably signs and systems to
educate this segment on how to operate the e-Payments system.
10. India should make concerned efforts to design an Internal security
framework to check online fraud so that the public can be assured and
protected against cyber attack and fraud.
11. There should be adequate legislation on all aspects of the operations of
the e-Payments system so that both the operators of the system and the
public can be satisfactory protected.
12. The government needs to ensure that the cost of telecommunications
hardware and software are made cheap. Which will involve examining
existing taxes and import duties.

REFERENCES
Reference:-
https://en.wikipedia.org/wiki/E-commerce_payment_system
https://www.yourdictionary.com/electronic-payment-systems
https://www.collinsdictionary.com/dictionary/english/e-payment
https://www.academia.edu/33508228/project.docxhttps://webservices.
https://bizfluent.com
https://www.semanticscholar.org/paper/Future-of-Payments-
ePayments-Premchand-Choudhry/fef5ecbd517e44d69eda057db
https://drive.google.com/file/d/1-CLTbxU4xuMT2N1JpIPJgx-
QTFjaSQ4z/view?usp=drivesdk
https://drive.google.com/file/d/1-
8tAtGvnYY8HV8KJBoKHfgijdDKylqcL/view?usp=drivesdk
https://www.semanticscholar.org/paper/Adoption-of-e-Payment-
Systems-%3A-A-Review-of-Kabir-
Saidin/dbf3d2753a979749756c821b472fec86f198feac
https://pdfs.semanticscholar.org/48a4/efa5d2ea67f6ed078064f52e73e0
d6b13a61.pdf?_ga=2.48522

https://www.semanticscholar.org/paper/Issues-and-Challenges-of-
Electronic-Payment-Systems
https://www.semanticscholar.org/paper/A-Review%3A-Secured-
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https://www.semanticscholar.org/paper/Analysis-of-Online-Portal-and-
E-Payment-Application
https://www.semanticscholar.org/paper/Factors-Influencing-the-
Adoption-of-Electronic-in-Dehbini
https://www.semanticscholar.org/paper/Examining-the-relationship-
between-perceived-risk
https://www.semanticscholar.org/paper/Future-of-Payments-
ePayments-Premchand
https://www.ijirset.com/upload/2017/march/105_A%20%20STUDY.p
df
https://www.researchgate.net/publication/303329794_Adoption_of_e-
Payment_Systems_A_Review_of_Literature
http://www.icommercecentral.com/open-access/study-of-consumer-
perception-of-digital-payment-mode.php?aid=86419

APPENDIX
Q1. What is your Age?
o 18-29
o 30-39
o 40-49
o 50-59
o 60 and above
Q2. What is your education ?

o Educational Qualifications
o Under Graduate
o Only Graduate
o Post Graduate
o Sessional Qualification
o Other
Q3. What is your Employment?

o Student
o Self employed
o Employed in a private Organisation
o Employed in a Government Organisation
o Homemaker
o Retired Other
Q 4. what is your Income?

o Under Rs 5 lakhs p.a
o Rs 5-10 Lakhs p.a

o Rs 10-20 Lakhs p.a

o Rs 20-30 Lakhs p.a
o Rs 30 lakhs and above
o Other
Q 5. How often do you use cash?

o Daily
o Monthly
o Weekly
o Yearly
o Never
Q 6. What is your go-to payment option ?

o Card
o Cash
o Cheque
o Electronic bank transfer
o Mobile Payment
o PayPal
Q7. What are the reasons for choosing E payment ?

o Convenience
o Safe and Secure
o Low service charge
o Privacy
o Easy to maintain co-payment transaction
o Other
Q8. E-payment saves your time and money?

o Agree
o Strongly Agree
o Neutral

o Disagree
o Strong Disagree
Q9. E-payment system can be easily understood and readily adopted?

o Agree
o Strong Agree
o Neutral
o Disagree
o Strongly Disagree
Q10 If you are trying to avoid unnecessary spending in general, which

of the following payment method would you avoid using?
o Cash
o Debit card
o Credit Card
o Mobile payment app
o Other
Q11. What are the major barriers of e-payment?

o No barriers
o Don't trust bank security
o Don't like entering data digitally
o Finding the technology difficult
o Inconvenient
o Doesnt provide all services(e.g. Cheque Deposits)
o Other
Q12. What are the security measures that secure you against, various
kind of e-payment attacks?
o Self awareness in security
o Installing anti-malicious software

o Limiting online activities

o User education
o Updating level of online banking security
o Other
Q13. E-payment offers a great choice for consumer and

merchant in the way they send and receive payment?
o Agree
o Strongly Agree
o Neutral
o Disagree
o Strongly Disagree
Q14. Which is your biggest concern about e-payment?

o Security
o Poor Internet
o Merchant acceptance
o Cost
o Lack of technology
o Other
Q15.Do you conduct, personal financial transactions online such as

household bill Purchase or services online?
o Not at all
o A little
o Some what
o A lot


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A strategic overview of e-payment in Indian business

`1.1 OVERVIEW OF E-PAYMENT

Sydenham college of commerce and economics 1

1.1 Overview of e-payment

Sydenham college of commerce and economics 2

1.2 MEANING AND DEFINITION OF E-PAYMENT

1.2.1 Definition of E-Payment

Sydenham college of commerce and economics 3

In another perspective, Peter and Babatunde (2012) viewed e-payment system

Furthermore, kalakota and whinstone (1997), sees electronic payment as a

Antwi, Hamza, and Bavoh (2015) defined e-payment as a payer’s transfer of a

Sydenham college of commerce and economics 4

1.3 E-PAYMENT – A BRIEF HISTORY

The World Wide Web

Sydenham college of commerce and economics 5

Keeping Your Private Data Safe

What’s Next for Electronic Payments?

Sydenham college of commerce and economics 6

Hot-button technologies like cryptocurrency and blockchain could be another

Sydenham college of commerce and economics 7

1.4 Characteristics of E- payment system:

As commercial use of the Internet grows, the demands placed on payment

The acceptability of a payment mechanism is affected by the size of the

Sydenham college of commerce and economics 8

Alternative forms of payment are needed, depending on the guarantees needed

Users should not be constantly interrupted to provide payment information and

Sydenham college of commerce and economics 9

1.5 ADVANTAGES OF E-PAYMENT SYSTEM

Even if someone is eager to bring his disbursements under control, it is

3) Reduced risk of loss and theft

If you pay for internet service provider or a mobile account replenishment

Sydenham college of commerce and economics 10

Usually every service is designed to reach the widest possible audience, so it

1.6 DISADVANTAGE OF E-PAYMENT SYSTEM

There is no way to authenticate or verify that the individual entering the

Sydenham college of commerce and economics 11

4) Transferring money between different payment systems:

5) The lack of anonymity:

1.7 IMPORTANCE OF E-PAYMENT SYSTEM

1) Easy to set up:

2) Affordable for every business:

Sydenham college of commerce and economics 12

3) Quality customer experience:

5) Quick transactions clearing:

7) Gain impulse buyers:

Sydenham college of commerce and economics 13

8) No banking account needed:

10) Buyers are accustomed to paying online:

Sydenham college of commerce and economics 14

1.8 Types of E-payment system

Sydenham college of commerce and economics 15

money on the card is saved in an encrypted form and is protected by a password

4) Digital Wallet (Electronic wallet):-

Similar to regular cash, e-cash enables transactions between customers without

Sydenham college of commerce and economics 16

1.9 Method of e-payment

• A one-time customer-to-vendor payment is commonly used when you shop

Sydenham college of commerce and economics 17

1.10 Issues and Challenges Regarding Electronic Payment

Electronic payment system requires large amount of information from end

3) Issues with e-Cash

The main problem of e-cash is that it is not universally accepted because it is

Sydenham college of commerce and economics 18