Quiz 16/05/2011

Question # 1:
Define System Architecture? What is two-tier
and multi-tier architectures?

Question # 2:
Explain with examples the concept of static and
dynamic web pages?

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Copyright © 2007 Pearson Education, Inc. Slide 1-1
 CIIT Vehari Campus

Payment Systems

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Copyright © 2007 Pearson Education, Inc. Slide 1-2
 Payment
• The partial or complete discharge of an
obligation by its settlement in the form of
the transfer of funds, assets, or services
equal to the monetary value of part or all of
the debtor's obligation (www.investorwords.com)

• Collecting revenue from the sales is at the

heart of running a business.

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 Types of Payment Systems

• Cash
• Checking Transfer
• Credit Card
• Stored Value
• Accumulating Balance

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 Cash
 Legal tender defined by
a national authority to
represent value

• Feature
– Most common form of
payment in terms of
number of transactions
– Instantly convertible into
other forms of value
without intermediation of
any other institution
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 Pros & Cons
• Pros
– Portable
– Requires no authentication
– Provides instant purchasing power
– Allow micro payments
– Free usage
– Private
• Cons
– Small transactions
– Easily stolen
– No float

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 Checking Transfer
• Funds transferred directly via a signed draft
or check from a consumer’s checking
account to a merchant or other individual
• Features
– Most common form of payment in terms of
amount spent
– Can be used for both small and large transactions
– Some float
– Not anonymous, require third-party intervention
(banks)
– Introduce security risks for merchants (forgeries,
stopped payments), so authentication typically
required

Ensured Checks
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 Credit Card

• Represents an account that

extends credit to
consumers, permitting
consumers to purchase
items while deferring
payment, and allows
consumers to make
payments to multiple
vendors at one time

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 Credit Card………
• Credit card associations:
– Nonprofit associations (Visa, MasterCard) that
set standards for issuing banks
• Issuing banks:
– Issue cards and process transactions
• Processing centers (clearinghouses):
– Handle verification of accounts and balances

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 Credit Card………
• Offer consumers a line of credit
• Enable instant purchases
• Reduce risk of theft
• Increase convenience
• Offer considerable float
• Transaction fee apply

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 Stored Value
• Accounts created by depositing funds into
an account and from which funds are paid
out or withdrawn as needed
– Examples: Debit cards, gift certificates, prepaid
cards, smart cards
– Debit cards: Immediately debit a checking or
other demand-deposit account
– Peer-to-peer payment systems such as PayPal a
variation

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 Accumulating Balance
• Accounts that accumulate expenditures and
to which consumers make period payments
– Examples: utility, phone, American Express
accounts

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Dimensions of Payment Systems

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 Most Common Payment Systems, Based on
Number Of Transactions

SOURCE: Based on data from U.S. Census Bureau, 2005.

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 Most Common Payment Systems, Based on
Dollar Amount
Figure 6.2, Page 310

SOURCE: Based on data from U.S. Census Bureau, 2005. 15