E- Payment

Sunil
Introduction to E-Payment systems – Types of
E-Payment Systems –Components of an
effective E-Payment System.

Sunil
 PLASTIC MONEY

Sunil
Christ University, Bangalore-29 Rishikesh. K. B.
 PLASTIC MONEY

*hard plastic cards in place of actual bank notes. *They

can come in many different forms such as cash cards,
credit cards, debit cards, pre-paid cash cards and store
cards.
Sunil
DEBIT CARD

Sunil
https://
www.youtube.com/watch?v=DOpYIUphkEM

Sunil
 Debit Card: Meaning
An electronic card issued by a bank
which allows bank clients access to
their account to withdraw cash or pay
for goods and services.

 John Shepherd-Barron

Sunil
ATM Skimmers
 https://
www.youtube.com/watch?v=gvs67ypiZAg
 https://
www.youtube.com/watch?v=ll4f0Wim4pM

Sunil
SMART CARD

Sunil
 SMART CARD: meaning
A smart card, chip card, or integrated circuit
card (ICC) is any pocket-sized card with
embedded integrated circuits / embedded
microprocessor. 
Smart cards can provide identification,
authentication, data storage and application
processing.

Sunil
common smart card applications
 Credit cards, Electronic cash, Computer
security systems, Wireless communication,
Loyalty systems (like frequent flyer points),
Banking, Satellite TV, Government
identification….etc

Sunil
Credit Card
Sunil
Credit Card: Meaning
 issuedby a financial company giving the
holder an option to borrow funds, usually
at point of sale.

 charge interest and are primarily used for

short-term financing.
 Interest usually begins one month after a

purchase is made and borrowing limits

are pre-set.

Sunil
VISA & MASTERCARD
The Popular Credit Cards

Sunil
Types of Credit Cards

Standard Reward
Credit Cards Cards

Secured Specialty
Credit Cards Cards

Sunil
 Types of Credit Cards
1. Standard Credit Cards: Are general
purpose cards. No deposits are needed
and the credit limit is established by
the credit card issuer.
2. Reward Cards: credit cards have
reward programs that can influence
your spending. The perks may come in
the form of cash, points or discounts

Sunil
 Reward Cards Examples
 Airline/Frequent Flier Miles: Using these cards can
earn airline miles. The miles accumulate and can
be put toward future flights.
 Cash Back: Cash back cards literally give some of
the money you have spent back to you in cash. 
 Points Cards: These cards let you earn reward
points that can be redeemed for merchandise,
entertainment and gifts.
 Premium Credit Cards: These are the "gold" and
"platinum cards". They are generally referred to as
"upscale". They are offered to consumers with
excellent credit

Sunil
3. Secured credit cards are known as
pay-as-you-go cards. Upon
opening the account, the card
holder deposits a few hundred to a
couple of thousand Rupees.
This limit is often based on a percent
of the deposit, which is usually 50-
100% of what you put into the
account. 

Sunil
4. Specialty cards typically are offered
through affiliations, partnerships,
major brand retailers or service
providers.
Usually support a social cause,
professional organization or an
alumni association.
A small portion of the purchase goes
toward the intended organization.
Sunil
video
 https://
www.youtube.com/watch?v=LBiHL_de4YA
 CREDIT CARD WORKING

Sunil
Sunil
 Requirements for Getting Credit
Cards in India
 A Bank Account:- The very basic requirement.
one must have a bank account.
 Salary Slip:- credit limit will depend on the salary

which can be increased later by requesting via

customer care phone number for most of the
 For Example: SBI increases it automatically every

6 months if you have some good number of

transactions.
 Income Tax Return Receipt(ITR):- This is required

if one is self-employed person.

Sunil
10 reasons to use Credit Cards
Signup Grace
Bonus Period
Insurance

Cash Back
Universal
Frequent
Acceptanc
Flyer Miles
e
Investment
Rewards

Points
Building
Safety Credit
Sunil
 Credit Card Process
Authorization

Batching

Clearing & Settlement

Funding

* Charge Backs
* Card is held due to a dispute relating to the transaction. 
Sunil
 https://www.youtube.com/watch?v=LBiHL_de
4YA
 CREDIT CARD WORKING

Sunil
 Card Holder

Insurance Card Issuing

Providers Bank

Affinity
Merchant
Partner

Parties Involved In
Credit Card
Transaction Acquiring
Network Bank

Credit Card Merchant

Association Account

Sunil
 Parties Involved
 Cardholder: The holder of the card who made a
purchase - the  consumer.
 Card-Issuing Bank: This bank bills the consumer for
repayment and bears the risk that the card is used
fraudulently.
 Merchant: The individual or business accepting credit
card payments for products or services sold to the
cardholder.
 Acquiring Bank: The financial institution accepting
payment for the products or services on behalf of the
CUSTOMER.
 Merchant Account: The account that the merchant
deals with the acquiring bank. Sunil
 Parties Involved
 Credit Card Association: An association of card-issuing
companies such
as Discover, Visa, MasterCard, American Express…etc
 Transaction Network: The system that implements the
mechanics of the electronic transactions.
 Affinity Partner: Some institutions lend their names to
an issuer to attract customers that have a strong
relationship with that institution.
 Insurance Providers: Insurers underwriting various

insurance protections offered as credit card perks, For

Eg: Car Rental Insurance, Purchase Security, Hotel
Burglary Insurance, Travel Medical Protection etc.

Sunil
Advantages Of Credit Cards
Build Positive
Convenience
Credit

Reap
Less Record
Rewards
Keeping
&Perks

Low Cost Balance

Loans Surfing

Sunil
Disadvantages Of Credit Cards
Need a great
Overuse /
amount of
Overspend
homework

High
maintenance Teaser Rates
charge

Deepening Virtual &

your credit Paperwork

Sunil
 CARD ISSUING BANK CARD NAME MONTHLY INTEREST RATE
Kotak Mahindra Bank Best Price Card 1.50%

State Bank of India UBI Advantage Card 1.75%

Union Bank of India Classic Card 1.90%

Union Bank of India Silver Card 1.90%

Axis Bank Easy Gold Credit Card 1.95%

State Bank of India Advantage Plus Card 2.25%

State Bank of India Advantage Gold Card 2.25%

http://www.allonmoney.com/c Deutsche Bank SmartGold Credit Card 2.25%

redit-cards/low-interest-rate/
ICICI Bank Instant Platinum Card 2.49%
Posted on May 11, 2016 by 
AllOnMoney.Com Citibank Cashback Card 2.50%

Citibank Prestige Card 2.50%

Bank of Baroda Titanium 2.60%

Bank of Baroda Signature 2.60%

Bank of Baroda Platinum 2.60%

Kotak Mahindra Bank Aqua Gold Card 2.99%

Sunil
Various E-Payment Methods
 Credit , Debit and Smart card
 Digital Currency
 E-Wallets
 E-Cheque
 Biometrics.https://www.youtube.com/watch?v=zSX59uHoHqU

Sunil
Biometric Payments
 Electronic payments using biometrics are still largely in their
infancy.
 Trials are underway in the United States, Australia and a
limited number of other countries.
 Most biometric payments involve using fingerprints as the
identification and access tool, though companies like Visa
International are piloting voice recognition technology and
retina scans are also under consideration.
 The electronic payment is still charged to a credit card or other
account, with the biometric identifier replacing the card,
cheque or other transaction mechanism.
E-Wallets
 Stores credit card, e-cash owner identification and
address information and provides this information at
ecommerce sites.
 Makes shopping easier and more efficient
 Eliminates needs to repeatedly enter identifying

information into forms to purchase

E-Cash
1. Consumer buys e-cash from bank
2. Bank sends e-cash bits to consumer (after charging
check that amount plus fee)
3. Consumer sends e-cash to merchant
4. Merchant checks with bank that e-cashes valid (Check
for forgery or fraud)
5. Bank verifies that e-cash is valid.
6. Parties complete transaction: Eg – merchant present e-
cash to issuing bank for deposit once goods or
services are delivered.
Payment Processing
components

Sunil
PREREQUISITES FOR E PAYMENT
PROCESSING

 For accepting credit cards on your website,

you need to procure the following things
first:
(1) a credit card processor
(2) a payment gateway service
(3) an electronic shopping cart system and
(4) an Internet merchant account issued by a
bank or other financial institution or service
bureau.

Sunil
The first Credit Card in India was
Introduced by….

Central Bank of
India will soon
launch a flexible
card that will
perform the
dual function of
being both a
debit and credit
card.
Sunil
Credit Card Processor
It is an electronic data center that processes
the credit card transactions coming from the
gateway company.
 It ensures the validity of charge and then

settles the funds in your merchant account.

Sunil
Worlds high altitude ATM is in…

Thegu (Sikkim, India)

Sunil
Internet Merchant Account:
 It is an account in which funds from online
sales are deposited by the processor.
 Usually issued by banks that are associated

with the major credit card services like Visa

and MasterCard.

Sunil
Worlds first floating ATM
An ATM was
installed by SBI on
February 9, 2004,
on a jhankar ferry
boat plying
between
Ernakulam and
Vypeen, Kochin,
Kerala
Sunil
Payment Gateway Service
 Authorizes payments for e-businesses and
online retailers and is linked with a huge
network of credit card issuing banks.
 acts like a middleman who comes in act when

a customer submits his/her credit card

information to the web page form.
 Then the website’s shopping cart checkout

system electronically submits the credit card

to the gateway service. It further routes the
information for approval to the processor.

Sunil
Sunil
Shopping Cart System:
 allows the customer to select and purchase
products from the website. It consists of
mainly three components:
 the product catalog,
 the shopping cart, and
 the checkout/payment system.

Sunil
Online catalogue

Sunil
Shopping cart

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Check out system

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Sunil
Continued....
 The product catalog exhibits the items that
are on sale on the website.
 The shopping cart system component let the

customers selects products by clicking on

“add items to cart,”
 checkout/payment system helps the

customer in completing the check-out

process and pay for their purchase with a
credit card.

Sunil
The first Credit Card was Introduced
by….

Sunil
Sunil
MORE INFORMATION-for Reference

Sunil
Types of E - Payment system
E-Payment types
 Credit Card
 Debit Card
 Smart Card
 E-Cheques
 Biometrics
 E-wallets
 E-cash
 EFT
 Stored value cards or gift cards
Credit Cards
 Credit card is small plastic card with a unique number
attached with an account. It has also a magnetic strip
embedded in it which is used to read credit card via card
readers
 Following are the actors in the credit card system.
◦ The card holder - Customer
◦ The merchant - seller of product who can accept credit card
payments.
◦ The card issuer bank - card holder's bank
◦ The acquirer bank - the merchant's bank
◦ The card brand - for example , visa or MasterCard.
 Credit card payment process
 Step 1: Bank issues and activates a credit card to customer on his/her request.
 Step 2: Customer presents credit card information to merchant site or to merchant from whom

he/she want to purchase a product/service.

 Step 3: Merchant validates customer's identity by asking for approval from card brand company.
 Step 4: Card brand company authenticates the credit card and paid the transaction by credit.

Merchant keeps the sales slip.

 Step 5: Merchant submits the sales slip to acquirer banks and gets the service chargers paid to

him/her.
 Step 6: Acquirer bank requests the card brand company to clear the credit amount and gets the

payment.
 Step 7: Now card brand company asks to clear amount from the issuer bank and amount gets

transferred to card brand company.

Debit Cards
 It is required to have a bank account before getting a debit
card from the bank.

 Here the amount gets deducted from card's bank account

immediately and there should be sufficient balance in bank
account for the transaction to get completed. Whereas in case
of credit card there is no such compulsion.

 Debit cards free customer to carry cash, cheques and even

merchants accepts debit card more readily.
Smart Card
 It has a small microprocessor chip embedded in it.
 It has the capacity to store customer work

related/personal information. Smart card is also used to

store money which is reduced as per usage.
 Smart card can be accessed only using a PIN of

customer. Smart cards are secure as they stores

information in encrypted format and are less
expensive/provides faster processing.
 Payment and Settlement Systems Act, 2007
e-cheques
 The e-cheque method was deliberately created to work in much the same
way as conventional paper cheque.
 An account holder will issue  an  electronic  document  that  contains  the 
name  of  the  financial  institution, the payer’s  account  number,  the 
name  of  payee  and  amount  of  cheque. 
 Like  a  paper  cheques  e-cheques  also  bear  the digital equivalent  of 
signature:    a  computed  number  that  authenticates  the  cheque  from 
the owner of the account.