E Payment Methods


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E Payment Methods

  1. 1. E-Payment Methods Group no. 4 Muhammad Irfan Shahid 12 Rooha Mukhtar 16 Course: Electronic-Commerce University of Education, Okara Campus
  2. 2.  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 What Electronic Payment system is?
  3. 3. Traditional Payment Methods Payment: The transfer of money from one individual or legal entity to another  Cash  Personal  Money Cheques orders (Bank note) University of Education, Okara Campus
  4. 4. Selection of Payment Method  Based on:  Convenience  Trace-ability  Repudiation  Financial risk  Fraud protection 2001 4 University of Education Okara Campus
  5. 5.        Credit and Debit card Digital Currency E-Wallets Peer-to-Peer Methods Smart card Micro-payments B2B University of Education Okara Campus 2001 Various E-Payment Methods
  6. 6.  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
  7. 7. Credit Card - Business Model Logical Money Flow Customer Bank Visa (3rd Party) Store’s Bank 2. Credit Authorization 4. Payment Customer Store 1. Charge University of Education Okara Campus 2001 3. Clearance/Settlement
  8. 8.  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 Digital Currency
  9. 9. E-Cash Concept Merchant 2001 5 4 Bank 3 2 1 1. Consumer buys e-cash from Bank 2. Bank sends e-cash bits to consumer (after charging that amount plus fee) 3. Consumer sends e-cash to merchant 4. Merchant checks with Bank that e-cash is valid (check for forgery or fraud) 5. Bank verifies that e-cash is valid 6. Parties complete transaction: e.g., merchant present e-cash to issuing back for deposit once goods or services are delivered Consumer University of Education Okara Campus
  10. 10. E-Wallets 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  Established by financial institutions in partnership with
  11. 11. Peer-to-Peer Methods  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  Digital cash via email (eCash.com)  PayPal.com – digital payment system
  12. 12. Smart Cards 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  Cards with computer chips embedded on their faces – very common
  13. 13. Micro-Payments 2001  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
  14. 14.  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 Ecommerce facilities on an international scale University of Education Okara Campus 2001 B2B
  15. 15. E-Payment Pros/Cons  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  Pros:
  16. 16. References http://www.slideshare.net/Vishalchd11/the-e-payment-systems http://www.slideshare.net/birubiru/electronic-payment-systems-705132 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-HomePage • http://www.slideshare.net/VishalSancheti1/e-payment10708085 • http://pages.ebay.com/help/pay/methods.html 2001 • • • • • • University of Education Okara Campus