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E Cheques


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E-Cheques- Definition, working, advantages, disadvantages

Published in: Technology

E Cheques

  1. 2. <ul><li>E-cheques are a mode of electronic payments. </li></ul><ul><li>E-cheques work the same way as paper cheques and are a legally binding promise to pay. </li></ul>
  2. 3. <ul><li>This technology was developed couple of years ago by a consortium of Silicon valley IT researchers and merchant bankers and since then has been promoted by many of the financial bodies. </li></ul>
  3. 4. <ul><li>E-cheques work the same way as paper cheques and are a legally binding promise to pay. The payment system uses digitally signed XML documents that provide mechanism to authenticate parties to a transaction. E-cheques are defined using FSML (financial services markup langauge) which allows for addition and deletion of document blocks, signing, co-signing, endorsing, etc. Signatures are accompanied by bank-issued certificates which tie the signer's key to a bank account. </li></ul>
  4. 5. <ul><li>Different accounts are used for e-cheques to protect standard chequing account against fraud. Settlement is handled via existing standards - ANSI X9.46 with FSML representation instead of cheque image and ANSI X9.37 cash letter contained in X9.46 encapsulation. </li></ul>
  5. 6. <ul><li>It seems that consumers would gain from having E-cheques available to make payments for online purchases. The online merchants on the other hand could receive payments instantly and since the customer’s bank will be involved in the transaction. </li></ul><ul><li>It would be impossible for an E-cheques to bounce. </li></ul><ul><li>Banks can do paperless, efficient transactions. </li></ul>
  6. 7. <ul><li>The problems come when your merchant does not accept E-cheques. </li></ul><ul><li>The other problem could be when you have more than one signer or endorser. </li></ul>
  7. 8. <ul><li>Sumant Kr. Diwakar </li></ul>