You are on page 1of 30

E-Commerce

Presentation

BYRAJIV RANJAN
B.F.Tech (2012-2016)
NIFT HYDERABAD

SPECIAL FEATURES
REQUIRED IN PAYMENT
SYSTEMS IN E-COMMERCE

TYPES OF E-PAYMENT
SYSTEMS

What is an E Payment
System?

EPSs enable a customer to pay for the goods and


services online by using integrated hardware and
software systems.

The main objectives of EPS are to increase


efficiency, improve security, and enhance
customer convenience and ease of use.

Although these systems are in their immaturity,


some significant development has been made
there are several methods and tools that can be
used to enable EPS implementation.

Special features of E-Payment


Authentication,
Public

key cryptography,
Digital signatures,
SSL,
Certificate Authorities.

Authentication
This

is the process of verification of the


authenticity of a person and/or a
transaction.
There are many tools available to
confirm the authenticity of a user.
For instance, passwords and ID numbers
are used to allow a user to log onto a
particular site.

Public Key Cryptography


Public

key cryptography uses two keys ,


one public and one private , to encrypt
and decrypt data, respectively.

Cryptography

is the process of
protecting the integrity and accuracy of
information by encrypting data into an
unreadable format, called cipher text.

Digital Signature

Rather than a written signature that can


be used by an individual to authenticate
the identity of the sender of a message
or of the signer of a document; a digital
signature is an electronic one.

E-check technology also allows digital


signatures to be applied to document
blocks, rather than to the entire
document.

Secure Sockets Layer (SSL)

Secure Sockets Layer transmits private


documents via the Internet.

SSL uses a cryptographic system that uses two


keys to encrypt data - a public key known to
everyone and a private or secret key known
only to the recipient of the message.

It operates between the transport and the


application layers in the network stack and uses
both public and private key cryptography.

Certificate Authorities
Certificate

authorities are similar to a


notary public, a commonly trusted third
party.

In

the e-commerce world, certificate


authorities are the corresponding of
passport offices in the government that
concern digital certificates and validate
the holders identity and authority.

Additional features of EPayment


There

is no paper involved, so electronic


payments can be effected directly from
home or office.

Fast,

efficient, safe, secure and generally


less costly than paper-based
alternatives, e.g. cheques.

Electronic

payments are fully traceable.

Many banks offer same day money transfer


inter-bank services for large value payments

Unlike cheques, electronic payments dont


bounce as payments will not be effected
unless the funds are available in the first
place.

Electronic payments are being standardised


across the world ensuring that payments to
other countries are fast and efficient.

Types of E-Payment Systems

Electronic Funds Transfer


(EFTs)

Electronic funds transfer is one of the oldest


electronic payment systems.

EFT is used for transferring money from one bank


account directly to another without any paper money
changing hands.

The most popular application of EFT is that instead of


getting a paycheck and putting it into a bank
account, the money is deposited to an account
electronically.

EFT is considered to be a safe, reliable, and


convenient way to conduct business.

Credit Cards
A

credit card is a payment card issued to users


as a system of payment.

Credit

cards are issued based on the


customer's income level, credit history, and
total wealth.

The

customer uses these cards to buy goods


and services or get cash from the participating
financial institutions.

Credit cards are issued

supposed to pay his or her


debts during the payment
period; otherwise interest
will accumulate.

Issued by department stores


(e.g., Shoppers stop)

Issued by credit card companies


based
on the customer
is
(e.g.,
Mastercard,
visa)

Two limitations of credit


cards are their unsuitability
for very small or very large
payments.
It is not cost-justified to use
a credit card for small
payments. Also, due to
security issues, these cards
have a limit and cannot be
used for excessively large
transactions.

Businesses extremely
benefit from these
company cards and they
are cheaper to operate.

They are widely issued


to and used by a broad
range of customers.

Businesses offer
incentives to attract
customers to open an
account and get one of
these cards.

Debit Cards

A debit card (also known as a bank


card or check card) is a plastic
payment card that provides the
cardholder electronic access to his or
her bank account(s) at a financial
institution.

The difference between credit cards


and debit cards is that in order to pay
with a debit card you need to know
your personal identification number
(PIN) and need a hardware device that
is able to read the information that is
stored in the magnetic strip on the
back.

The

benefit for the customer is


the easiness of use and
convenience.

These

cards also keep the


customer under his or her
budget because they do not
allow the customer to go beyond
his or her resources.

The

advantage to the merchant


is the speed at which the
merchant collects these charges.

Smart Cards

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 card it 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. A


popular example of a disposable smart card is the
one issued by telephone companies. After using the
pre-specified amount, the card can be discarded.

E- 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.
This payment system complements
credit, debit, and charge cards and adds
additional convenience and control to
everyday customer cash transactions.

E-cash

usually operates on a smart card,


which includes an embedded
microprocessor chip.

E-cash

is transferred directly from the


customer's desktop to the merchant's site.

For

an e-cash transaction to occur we need


to go through the following procedures:
Account setup
Purchase
Authentication

E- Checks
E-check is the result of cooperation among several banks,
government entities, technology companies, and ecommerce organizations.
An e-check uses the same legal and business protocols
associated with traditional paper checks.
It is a new payment instrument that combines high-security,
speed, convenience, and processing efficiencies for online
transactions.
It shares the speed and processing efficiencies of allelectronic payments.
An e-check can be used by large and small organizations,
even where other electronic payment solutions are too risky
or not appropriate.

E- Wallet

An e-wallet or adigital walletrefers to an


electronic device that allows an
individual to make ecommercetransactions.

This can include purchasing items on-line


with a computer or using a smartphone
to purchase something at a store.

Increasingly, digital wallets are being


made not just for basic financial
transactions but to also authenticate the
holder's credentials

For example, a digital-wallet


could potentially verify the age of
the buyer to the store while
purchasing books.

It is useful to approach the term


"digital wallet" not as a singular
technology but as three major
parts: the system (the electronic
infrastructure) and the
application (the software that
operates on top) and the device
(the individual portion).

Micro Payments
Micro-payments are used for small payments on
the Web.
The process is similar to e-wallet technology where
the customer transfers some money into the
wallet on his or her desktop and then pays for
digital products by using this wallet.
Using micro-payment one will be able to pay for
one article from a professional journal, a chapter
from a scientific book, or one song from a CD on
the Web.
IBM offers micropayment wallets and servers.

IBM micro-payment systems allow


vendors and merchants to sell content,
information, and services over the
Web.

The micro-payment system can be


used for billing by banks and financial
institutions, Internet service providers
(ISPs), content providers (offering
games, entertainment, archives, etc.),
telecommunications, service providers
(offering fax, e-mail, or phone services
over the Web), and by premium search
engines and specialized databases.

B2B Transactions

The fastest grossing sector of e-commerce


payments is business-to-business (B2B)
transactions.
These payments are often much larger than
business-to customer (B2C) transactions and
involve complex business accounting systems.
For example, Paymentech is one of the largest
payment solutions providers for point-of-sale
transactions on the Internet.
Paymentech supports all types of credit and
debit cards and conducts all transactions in a
secure environment.
Its features include custom reporting, e-billing
and cross-compatibility with other third-party
expense reporting tools.

B2C Transactions

B2C market transactions are less complicated than B2B


transactions.

Using Electronic Bill Presentment and Payment (EBPP)


a company can display a bill on multiple platforms
online and offer actual payment processes.

Payments are generally electronic transfers from


consumer checking accounts.

This is conducted through the ACH (Automated


Clearing House), the current method for processing
electronic monetary transfers.

CONCLUSION

According to the survey of CEIC(Computer


And Enterprise Investigation Conference), the
percentage of the online transactions has
increased from 0.96 billion to 1.21 billion in
the year 2011-12.

Economists have theorized that e-commerce


ought to lead to intensified pricecompetition,
as it increases consumers' ability to gather
information about products and prices.

BIBLIOGRAPHY
Business

communication; K.K. Sinha

www1.american.edu/initeb/sm4801a/ep

ayment1.htm
www.tutorialspoint.com/e.../e_commerce

_payment_systems.htm