The document discusses electronic payment systems. It explains that electronic payment systems allow transactions to be made electronically without cash or checks by using online or mobile banking. The use of electronic payment methods has grown significantly with the rise of e-commerce and internet banking. Various electronic payment options are described, including digital wallets, credit/debit cards, e-checks, stored-value cards, and smart cards. The benefits of electronic payments for both consumers and merchants are convenience, security, and efficiency.

1. E-payment system is a way of making transactions or
paying for goods and services through an electronic
medium without the use of check or cash. It’s also called an
electronic payment system or online payment system. Read
on to learn more. The electronic payment system has
grown increasingly over the last decades due to the widely
spread of internet-based banking and shopping. As the
world advance more on technology development, a lot of
electronic payment systems and payment processing
devices have been developed to increase, improve and
provide secure e-payment transactions while decreasing
the percentage of check and cash transaction.

2. Electronic payment methods
 E-payment methods could be classified into two areas, which are:
 Cash Payment System
 Electronic Funds Transfer (EFT): this is an electronic system used to
transfer money from one bank account to another without any cash
exchange by hand.EFT comprises many other concepts of payment
system include:
 Direct debit, that is a financial transaction in which the account
holder instructs the bank to collect a specific amount of money from
his account electronically for payment of goods or services.
 E-Check, a digital version of an old paper check. It’s an electronic
transfer of money from a bank account, usually checking account
without the use of the paper check.
 Electronic billing: this is another form of electronic funds transfer used
by companies or businesses to collect payments from customers over
electronic method.

3. Cont..
 Electronic cash (e-Cash): it is a form of an electronic
payment system of which certain amount of money is
stored on a client device and made accessible for
internet transaction. Electronic cash is also referred to
as digital cash and it make use of e-cash software
installed on the user PC or electronic devices.
 Stored value card: this is another form of EFT used by
stores. Stored value card is a card variety that has a
certain amount of money value stored and can be used
to perform the transaction in the issuer store. A typical
example of stored value cards are gift cards.

4. Credit Payment System
 Credit Card: this is another form of the e-payment system
which required the use of the card issued by a financial
institute to the cardholder for making payments online or
through an electronic device without the use of cash
 E-Wallet: it is a form of prepaid account that stored user’s
financial data like debit and credit card information to
make an online transaction easier.
 Smart card: this use a plastic card embedded with the
microprocessor that can be loaded with funds to make
transactions and instant payment of bills. It is also known
as a chip card

5. Benefits of using an e-payment
system
 E-Commerce websites use an e-payment system to make it easier and more
convenient to pay for their customers. It comes with many benefits, which
are:
 More sales by reaching a new audience.
 More effective and efficient transactions. It’s because these are made just
in minutes (even with one-click), without wasting customer’s time.
 Convenience. Customers can pay for items on e-commerce website at
anytime and anywhere. They just need an internet connected device. As
simple as that!
 It also lowers the whole transaction cost.
 Today it’s easy to add payments to the website, so even a non-technical
person may implement it in minutes and start processing online payments.
 E-Commerce, as well as m-commerce, is getting bigger and bigger, so
having e-payment system at your online store is a must. It’s simple, fast and
convenient for the online shoppers to pay.
 Still, one of the most popular payment methods are credit and debit card
payments, but people also choose some alternatives or local payment
methods. If you run an online business, find out what your target audience
need, and provide the most convenient and relevant e-payment system.

6. Smart card A smart card resembles a credit card in size and shape, but inside it is
completely different. First of all, it has an inside -- a normal credit card
is a simple piece of plastic. The inside of a smart card usually contains
an embedded microprocessor. The microprocessor is under a gold
contact pad on one side of the card. Think of the microprocessor as
replacing the usual magnetic stripe on a credit card or debit card.
 Smart cards are much more popular in Europe than in the United
States. In Europe, the health insurance and banking industries use
smart cards extensively. Every German citizen has a smart card for
health insurance. Even though smart cards have been around in their
modern form for at least a decade, they are just starting to take off in
the United States.
 The most common smart card applications are:
 Credit cards
 Electronic cash
 Computer security systems
 Wireless communication
 Banking

7. Advantages of Smart Cards
 Larger memory.
 High levels of security
 Reduced fraud
 Organized information
 Reliability
 Upper management information
 Information Security
 Ease of use without need for connections online or via
telephone
 Through the Internet, smart card users can buy and
pay for computer network

8. Disadvantages of smart cards
 A more powerful virus.
 Discomfort to retrieve information from a stolen card.
 The card must be recharged.
 Increased cost of production.
 Dependence of electrical energy for use.
 Bank fees associated with credit card.
 We need a smart card reader

9. E-wallet
 A digital wallet refers to an electronic device that
allows an individual to make electronic transactions.
This can include purchasing items on-line with a
computer or using a smart phone to purchase
something at a store. An individual's bank account can
also be linked to the digit. E-wallet is a type of
electronic card which is used for transactions made
online through a computer or a smartphone. Its utility
is same as a credit or debit card. An E-wallet needs to
be linked with the individual's bank account to make
payments.al wallet

10. Advantage of e-wallet
 Time Saving: Many times when you go for online shopping or for
mobile recharge, you even wouldn’t have time to enter your credit card
details. So, for that time you would miss digital wallet. If you keep
some amount in your digital wallet, it will be easier to make payments
online without having to enter the card details. It’s really time time
saving.
 Security: If you’re thinking that your money is insecure in digital
wallets , then you’re wrong because all the wallets offers the password
security service to lock your wallet very well. And most of the wallets
provide the extra security to keep your money secure from
unauthorized access..
 Attractive Discounts: Sometimes you can get lots of attractive
discounts for buying products online. If you’re using digital wallet of
any online wallet provider, you may find some discounts but for this
you will have to make payments only with your digital wallet. So, it can
also be a great benefit of having digital wallet.

11. Cont..
 More use full for online merchants
 It makes online shopping easier.
 More feasible
 Pay person to person
 Multi currency capability

12. Disadvantage
 Problem of money laundering arises.
 Use provider no audit trial.
 Does not work with certain browser.
 Any one can edit so this may be too open for some
applications

13. e-cheque
 An e-Cheque is a payment that you make directly from your bank
account. You can only send an e-Cheque if your bank account is
the only payment method attached to your bank account, and
you don't have a credit or debit card as a back-up payment
method. An electronic version or representation of a paper
cheque. The account holder writes an e-check (or e-cheque)
using a computer or other type of electronic device and transmits
the e-cheque to the payee electronically. Like paper cheques, e-
checks are signed by the payer and endorsed by the payee.
Rather than handwritten or machine-stamped signatures,
however, e-checks are affixed with digital signatures, using a
combination of smart cards and digital certificates. The payee
deposits the e-check, receives credit, and the payee's bank clears
the e-check to the paying bank. The paying bank validates the e-
check and then charges the cheque writer's account for the
cheque.