3. HOW DO WE MAKE AN ELECTRONIC
PAYMENT?
Credit and debit cards
Smart cards
Electronic cash (digital cash)
Electronic wallets
Person-to-person payments
Electronic billing systems
Electronic cheques
4. ELECTRONIC CASH
Digital currency that may be used to make
small payments – smaller sums than you
would use a credit or debit card for
User has special software on his computer
that allows him to access his bank account
for cash
5. DIGITAL WALLET
Located on user’s system
Stores:
User identification information
Credit card details
Digital cash
Automatically provides this information to vendor
site in order to make a purchase
E.g. Amazon.com’s 1-Click shopping service
6. SMART CARDS
Credit card-sized cards with an embedded
microprocessor
Stores identification data and monetary value
Can be used to store health records, telephone
numbers, etc.
Can be used to receive payments and to make
them
7. PERSON-TO-PERSON PAYMENTS
You cannot pay a person with a credit card
PayPal, Yahoo PayDirect and BillPoint have put up
web sites to which one may direct a payment to
another person
The intended recipient logs on to the site, offers
proof of identity, and directs where the payment
should be sent – e.g. to a bank account
8. ELECTRONIC BILLING SYSTEMS
These are services offered by intermed-iaries who
function as collection agents for companies that
have made credit sales to customers over the web.
They notify purchases as bills fall due, present the
bills, and process the payments
9. INFRASTRUCTURE
Certificate authority
Digital certificate
Data encryption
Secure Sockets Layer (SSL)
Compliant banking system
Merchant accounts
Stable currency
10. CERTIFICATE AUTHORITY
Issues digital certificates
Verifies authenticity of a certificate
Installs your certificate with public key accessible to
your clients
Saves your private key on your computer
11. DATA ENCRYPTION
Data streaming into your computer is encrypted
using your public key
Prior to sending you data, the sender uses your
public key to validate the authenticity of your site
Encrypted data sent can only be decrypted via your
private key
12. SECURE SOCKETS LAYER
A communications protocol used to secure sensitive
data
Authenticates the target computer
Determines the encryption algorithm
Transfers the encrypted data
13. MERCHANT ACCOUNTS
An account which a firm establishes with a bank allowing
it to accept credit cards from customers
Many firms fail to get merchant accounts
They have recourse to Independent Sales Organisations
(ISO)
Risk assessment
14. CREDIT CARD PAYMENT
Credit card company debits vendor’s bank
with Interchange Fee
Bank in turn debits vendor with a Merchant
Discount
Both are levied on the basis of a percentage
of sales value
