3. Credit Cards
Pre-approved credit which can be used for the
purchase of items now and payment of them later.
Particulars Displayed On Credit Cards
Name of the customer
16-digit card number
Validity date
The VISA hologram and the VISA logo
Name of the issuing bank
Signature period
Magnetic strip
PIN
4. CLASSIFICATION OF
CREDIT CARDS
Based on mode
of credit
recovery
Based on
status of
credit card
Based on
geographical
validity
Based on
franchise/
Tie-up
Based on
issuer
Category
Charge
Card
Revolving
credit card
Standard
Card
Domestic
card
Internation
al Card
Individ-
ual Cards
Corpor-
ate
Cards
Proprie-
tary card
Business
Card
Gold Card
Master
Card
VISA
Card
Domestic
Tie-up
Card
5. Mechanics of Credit Card Operation
Contract for credit card (1)
Issue of credit card (2)
Payment of credit card(3)
Clearing and settlements (7)
Charging of credit card Purchase of
and raising bills (4) goods and
services (3)
Submission of bill
for collection (5)
Payment for bills (6)
Card Issuing Bank
Card User /
Customer
Marchant’s bank Merchant
establishment
9. E-Wallets
An Electronic Wallet is any device or software which
allows a user to store, manipulate, and pay with
various types of payment instruments such as
electronic cash and credit cards.
They make it unnecessary to retype credit card
numbers and addresses each time a purchase is
made.
10. Security
Your information is protected with a password that
you choose. Then when you shop at an Internet
store the site will prompt you to select a payment
method from your wallet and to authorize it by typing
your password.
Many newly released E-Wallets will use a new
standard called the Electronics Commerce Modeling
Language (ECML) that will work with any web
security software.
11. Digital Token-Based E-Payments
Cash or Real Time – e-Cash
Debit or Prepaid - Debit Card, Smart Card, e-Wallets
Credit or Post paid – Credit Cards, e-Cheque
12. Desirable Properties of Digital Money
Universally accepted
Transferable electronically
Divisible
Non-forgeable, non forgeable, non-stealable
Private (no one except parties know the amount)
Anonymous (no one can identify the payer)
Work off-line (no on-line verification needed)
13. E-cash Concept
Consumer buys e-cash from Bank
Bank sends e-cash bits to consumer (after charging
that amount plus fee)
Consumer sends e-cash to merchant
Merchant checks with Bank that e-cash is valid
(check for forgery or fraud)
Bank verifies that e-cash is valid
Parties complete transaction: e.g., merchant present
e-cash to issuing back for deposit once goods or
services are delivered
15. Two storage methods
On-line
Individual does not have possession personally of electronic
cash
Trusted third party, e.g. online bank, holds customers’ cash
accounts
Off-Line
Customer holds cash on smart card or software wallets
Fraud and double spending requires tamper proof encryption
16. Advantages and Disadvantages
Advantages
More efficient, eventually meaning lower prices
Lower transaction costs
Anybody can use it, unlike credit cards, and does not require
special authorization
Disadvantages
Tax trail non-existent, like regular cash
Money laundering
Susceptible to forgery
17. Electronic Cash Security
Complex cryptographic algorithms prevent double
spending
Anonymity is preserved unless double spending is attempted
Serial numbers can allow tracing to prevent money
laundering
Does not prevent double spending, since the merchant or
consumer could be at fault
18. Past and Present E-cash Systems
Checkfree
Allows payment with online electronic checks
Clickshare
Designed for magazine and newspaper publishers
Purchases are billed to a user’s ISP, who in turn bill the
customer
19. Past and Present E-cash Systems
CyberCash
Combines features from cash and checks
CyberCoins
Stored in CyberCash wallet, a software storage mechanism
located on customer’s computer
Used to make purchases between .25c and $10
20. Past and Present E-cash Systems
DigiCash
Allowed customers to purchase goods and services using
anonymous electronic cash
Coin.Net
Electronic tokens stored on a customer’s computer is used to
make purchases
Works by installing special plug-in to a customer’s web
browser
Merchants do not need special software to accept eCoins.
21. Past and Present E-cash Systems
MilliCent
Developed by Digital, now part of Compaq
Electronic scrip system
Customers can purchase items of very low value