This document discusses various payment methods for online transactions, focusing on credit cards and e-wallets. It describes how credit cards work, including the key information displayed on cards and the mechanics of credit card transactions. It also discusses e-wallets, which allow storing payment details to make online purchases without reentering information. The document outlines the desirable properties of digital money and compares online and offline electronic cash systems.

1. Payment Methods

2. Understanding Online Payment

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

6. Credit Card Transaction

7. Credit Card Video

8. What does 16 digit means

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

14. Properties of e-Cash
 Monetary Value
 Interoperability
 Retrievability
 Security

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