e-payment methods
DESCRIPTION
TRANSCRIPT
E-Payment Methods
Group no. 4
Muhammad Irfan Shahid
Course: Electronic-Commerce
University of Education, Okara Campus
What Electronic Payment system is?
Electronic Payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an intermediary, or by a legal tender.
Electronic payment system is a system which helps the customer or user to make online payment for their shopping.
University of Education Okara Campus
2001
University of Education, Okara Campus
Payment: The transfer of money from one individual or legal entity to another
Cash
Personal Cheques
Money orders (Bank note)
Traditional Payment Methods
University of Education Okara Campus2001 4
Selection of Payment Method Based on:
Convenience Trace-ability Repudiation Financial risk Fraud protection
Various E-Payment Methods Credit and Debit card Digital Currency E-Wallets Peer-to-Peer Methods Smart card Micro-payments B2B
University of Education Okara Campus
2001
Credit Card The most popular payment method Cards are issued by a bank Unique 16-digit number (including check
digits) and an expiration date Third party authorization companies verify
purchases
University of Education Okara Campus
2001
Credit Card - Business ModelLogical Money Flow
University of Education Okara Campus
Customer
CustomerBank
Store
Visa(3rd Party)
1. Charge
2. Credit Authorization
3. Clearance/Settlement
4. Payment
Store’sBank 20
01
Digital Currency Digital cash accounts like traditional bank
accounts Buyers deposit cash in the account and spend it
at E-Commerce sites (acct # is passed using secure proprietary protocol)
E-Comm merchants can feel sure of payment Customers do not need a credit card and
spending is limited to account balance www.ecash.com
University of Education Okara Campus
2001
E-Cash Concept
1. Consumer buys e-cash from Bank2. Bank sends e-cash bits to consumer (after charging that amount plus fee)3. Consumer sends e-cash to merchant4. Merchant checks with Bank that e-cash is valid (check for forgery or fraud)5. Bank verifies that e-cash is valid6. Parties complete transaction: e.g., merchantpresent e-cash to issuing back for deposit once goods or services are delivered
University of Education Okara Campus
2001
Merchant
Consumer
Bank
1
2
3
4
5
E-Wallets Established by financial institutions in partnership with
member E-Commerce sites Allows customer to submit billing and shipping info
with one click at member sites Also can store e-Cheques, e-Cash and credit card
information Not as popular as originally projected Entrypoint’s InfoGate offers an e-wallet
University of Education Okara Campus
2001
Peer-to-Peer Methods Digital cash via email (eCash.com) PayPal.com – digital payment system
Acts as a trusted third party (e.g. auction purchase) To send money:• Sender sets up an account and requests to send
payment • Sender places payment into the receivers account by
credit-card• Reciever is notified of payment via email• Receiver can transfer funds to bank account or
request a cheque
University of Education Okara Campus
2001
Smart Cards Cards with computer chips embedded on their faces – very common
in Europe Used for health care, transportation, ID, retail, pay phones, loyalty
programs, banking machines Smart card readers interface with card and request user PIN for access Bank machines can load cards with cash and then merchants can
download cash from card Returns anonymity of purchase to customer GemPlus, MasterCard are leading supplier of SCs
University of Education Okara Campus
2001
Micro-Payments
Long distance phone call charge is an example of a micro-payment
Digital Equipment Corporation (DEC) researchers originally envisioned MPs:• Payment per newspaper article ($0.005)• Payment by stock quote ($0.001)• Payment per click (Qpass, Inc.)
University of Education Okara Campus
2001
B2B B2B transactions are the fastest area of $ growth
on the web B2B transactions are substantially larger than
B2C Paymantech is major provider:
24/7 availability, all manner of EFT supported many management tools and reporting methods
Ecredit.com offers real-time automated credit approval and financing
TradeCard offers comprehensive B2B E-commerce facilities on an international scale
University of Education Okara Campus
2001
E-Payment Pros/Cons Pros:
Potential for great flexibility Low transaction costs Rapid and diverse purchase power
Cons: Perfect copying of transactions is possible Vulnerability to world-wide attack Lack of anonymity, potential for privacy intrusion
University of Education Okara Campus
2001
References• http://www.slideshare.net/Vishalchd11/the-e-payment-syste
ms• http://www.slideshare.net/birubiru/electronic-payment-syste
ms-7051324• http://www1.american.edu/initeb/sm4801a/epayment3.htm• http://en.wikipedia.org/wiki/Payment_system• http://www.slideshare.net/birubiru/eps-6953955• http://www.irs.gov/uac/Electronic-Payment-Options-Home-
Page• http://www.slideshare.net/VishalSancheti1/e-payment-
10708085• http://pages.ebay.com/help/pay/methods.html
University of Education Okara Campus
2001
Thank YouThank You
University of Education Okara Campus
2001