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Electronic payment system

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This PPT includes the explanation on various types of Electronic payment systems used its working and the recent trends in E-commerce and Electronic payments with special reference to India, It also speaks of various security issues related with e commerce and the use of e-payment systems.

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Electronic payment system

  1. 1. DEFINITION 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.
  2. 2. TYPES OF EPS E-CASH E-WALLETS SMART CARDS CREDIT CARDS ELECTRONIC PAYMENT SYSTEM
  3. 3. e-CASH A system that allows a person to pay for goods or service by transmitting a number from one computer to another. Like the serial numbers on real notes, e- Cash numbers are also unique. This is issued by a bank and represents the real money. It’s a Value Storage and exchange system that operates online in much the same way that government-issued currency operates in the physical world.
  4. 4. e-CASH PROCESSING 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.
  5. 5. The E-wallet is another payment scheme that operates like a carrier of E-cash and other information. The aim is to give shoppers a single, simple, and secure way to carrying currency electronically. Trust is the basis of the e- wallet as a form of electronic payment.
  6. 6. SMART CARDS A smart card, chip card, or integrated circuit card (ICC) is any pocket-sized card with embedded integrated circuits. Smart cards are made of plastic. Smart cards can provide identification, authentication, data storage and application processing. Smart cards may provide strong security authentication for single sign-on (SSO) within large organizations
  7. 7. TYPES OF SMART CARDS Contact smart cards have a contact area of approximately 1 square centimeter (0.16 sq in), comprising several gold-plated contact pads. These pads provide electrical connectivity when inserted into a reader, which is used as a communications medium between the smart card and a host (e.g., a computer, a point of sale terminal) or a mobile telephone. Cards do not contain batteries; power is supplied by the card reader
  8. 8. 2. Contactless smart cards TYPES OF SMART CARDS
  9. 9. 2. Contactlesssmart cards – Examples : TYPES OF SMART CARDS
  10. 10. Smart cards are turning out to be a fundamental piece of the transformation of retailing into electronic commerce. The impressive growth of the Internet is making electronic shopping at least a real possibility, if not a habit, among computer users. SMART CARDS AND ELECTRONIC PAYMENT SYSTEM
  11. 11. Credit cards or checks are simply too expensive to use for micro-payments, and the e-cash currently being experimented on the World Wide Web does not seem to have the characteristics to appeal to shoppers. For this reason, smart cards could be a fundamental building block of widespread use of electronic commerce, since they are an instrument to pay at a low cost for transactions involving small amounts of money. SMART CARDS AND ELECTRONIC PAYMENT SYSTEM
  12. 12. A smart card can contain a non-encrypted profile of the bearer, so that the user can get customized services even without previous contacts with the supplier. SMART CARDS AND ELECTRONIC PAYMENT SYSTEM Smart cards are a key technology enabler for financial institutions. PC-based home banking and phone banking will give way to card banking: A phone equipped with a smart card reader will be all that is needed for any kind of transaction.
  13. 13. It is a Plastic card having Magnetic Number and Code on it. It has some fixed amount to spend. Customer has to repay the spent amount after sometimes. CREDIT CARDS
  14. 14. Digital Credit Card Payment System extend the functionality of existing credit cards for use as online shopping payment tools. Focuses specifically on making use of credit cards safer and more convenient for online merchants and customers. Processed in much the same way that in store purchases are.
  15. 15. One important challenge of e-commerce is Risk Management. The working of the payment systems incurs three major risks; i. mistake, ii. privacy problems and iii. credit risk.
  16. 16. I. Consumer Protection • Virtually all electronic payment systems require some ability to keep automatic records. Once information has been electronically caught , it is easy and not expensive to keep. • The intangible nature of electronic transactions and resolution of the disputes relying alone on records, a general law of payment dynamics and banking technology might be : No data should be discarded.
  17. 17. Features of these automatic records are : • Permanent storage • Accessibility and traceability • A payment system database and • Data transfer to payment maker, bank or monetary authorities. • The need of keeping of records for the purposes of risk management conflicts with the transaction anonymity of cash. An unknown payment system without automatic record keeping facility will be difficult for bankers and government to accept. However, customers might feel that all this record keeping is an invasion of privacy.
  18. 18. II. Managing Information Privacy • The electronic payment system must provide and maintain privacy. Every time one purchases goods using a credit card, subscribes to a magazine or accesses a server that information goes into a database somewhere. This violates one the unspoken laws of doing business; that the privacy of customers should be protected as possible.
  19. 19. • All details of a consumer’s payments can be easily be aggregated : Where, when and sometimes what the customer buys is stored. This data collection tells much about the person and as such can conflict with the individual’s privacy.
  20. 20. • Privacy must be maintained against eavesdroppers on the network and against unauthorized insiders. The users must be given assurance that they cannot be easily duped or falsely implicated in a fraudulent transaction. This protection has to be applied on the whole transaction protocol.
  21. 21. III. Managing Credit Risk : • Credit risk is an important concern in systems of net settlement because a bank’s inability to settle its net position could give rise to a chain reaction of failures of the banks. The digital central bank must prepare policies to handle this possibility. Various alternatives exist, each with advantages and disadvantages. • A digital central bank guarantee on settlement issues eradicates the insolvency test from the system because banks will more easily assume credit risks from other banks,
  22. 22. Rs 500, Rs 1000 notes: Flipkart, Amazon want you to go cash less: • E-commerce majors Amazon, Flipkart and Snapdeal have stopped their CoD (cash-on-delivery) mode of payment following the Indian government’s move to demonitise the Rs 500 and Rs 1,000 . • While trying to make a CoD purchase on Amazon, you will be greeted with a message saying :- “We have disabled COD for you to save cash for essential payments ”.
  23. 23. • Flipkart gives you a banner saying, “This payment option is not available for this order”. • The message advises people to use their debit/ credit cards or net banking to make purchases.
  24. 24. Paytm hits Record 5mn transactions a day: • Following the ban on Rs 500 and Rs 1,000 notes, mobile wallets, debit and credit cards, online money transfers have seen a rise of 200%, industry experts have observed. • Paytm, would be able to close the financial year with Rs 24,000 crore worth of transactions processed on the platform.
  25. 25. • The company registered a 700% increase in overall traffic and 1,000% growth in the amount of money added to the Paytm account over the past couple of days. • During this period, the transaction value continued to be 200% of the average ticket size, while the number of app downloads went up 300%. • The number of transactions per user also went up from 3 to 18 transactions in a week.
  26. 26. Digital transactions in banking sector going up: SBI • Digital transactions have really gone up at my PoS transactions, by300 per cent up in numbers, • and 200 per cent by value. • A lot of corporates were asking for Impress Cards for low value payment to many of their contract workers, even for people like drivers who were given cash to tank up cars. • SBI is installing 3,600 PoS machines at various toll plazas so people can use cards instead of cash at the tolls. Arundhati Bhattacharya, chairperson , SBI.
  27. 27. Airtel Payments Bank goes live with pilot project in Rajasthan • Airtel Bank would commence the pilot with banking points at 10,000 Airtel retail outlets. • The pilot is aimed at testing systems and processes ahead of a pan-India launch. • Customers in towns and villages in Rajasthan would be able to open bank accounts at Airtel retail outlets, which would act as Airtel banking points and offer a range of convenient banking services.
  28. 28. • A wide network of merchants would accept digital payments from Airtel Bank, offering customers the convenience of cashless purchase of goods and services through their mobile phones in a quick and secure manner • The banking points would offer bank account opening services, cash deposit and withdrawal facilities. • Elaborating on the digital and paperless bank, the firm said, account opening would be quick and paperless using Aadhaar based e-KYC. • It would allow money transfer to any bank account in India and free money transfer from Airtel to Airtel numbers within the Airtel Bank.
  29. 29. MobiKwik 'Lite' to make life easier for small business holders • MobiKwik, on Monday (28/11/2016), announced the launch of MobiKwik 'Lite', an easy to understand and use app that will help the unorgainised retailers and shopkeepers across India in receiving payments seamlessly. • The app will be available in all major Indian languages .
  30. 30. Some of the features of MobiKwik Lite include: • Supports receiving payment. • Bank transfer. • P2P transfer. • Bill payments and, • Recharge.
  31. 31. A Ayush G. K

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