This document summarizes electronic cash (e-cash) payment systems. It begins by distinguishing between fiduciary and scriptural money, then describes traditional cash payment methods like cash, checks, and money orders. It goes on to explain two models of e-cash: online and offline digital payment systems. The document outlines requirements, components, and types of e-cash including credit cards, digital currency, e-wallets, peer-to-peer payments, smart cards, and micro-payments. It discusses advantages and disadvantages of e-cash and applications. In the end, it provides references for further information.

1. Presented by-Injamul Islam
Department-I.T
University Institute Of Technology,BU
A Seminar representation on
E-Cash Payment System

2. Outline
Traditional Cash Payment System
E-Cash Payment System

3. Types of Money:
Fiduciary vs. Scriptural
Fiduciary money (fiat money, legal tender)
Issued by a central (government) bank
Has real “discharging power” (to discharge debts)
Cannot be refused
Scriptural money (not legal tender)
Money not issued by central bank
Examples: bank accounts, travelers checks, gift certificates, scrips
Discharging power based on trust in issuer
Can be refused

4. Traditional Cash Payment
Methods
Payment: The transfer of money from one individual or legal entity
to another
Cash
Personal Cheques
Money orders (Bank note)

5. E-Cash Payment Method
Currently e-cash is represented by two models.one is on-
line(introduced by DigiCash)which allows for all type of internet
transaction.
Other is Off-line: It is digitally encoded card that is used for many
of the same transaction as cash. It has also on-line capabilities
E-cash truly globalize the economy,since the user can download
money into his cyber-wallet.

6. Requirements of
E-Cash Payment Methods
Enable an honest customer to convince a seller to accept
payment
Prevent a dishonest customer from making unauthorized
or fraudulent payments
Ensure the privacy of honest participants
Integrate with existing and evolving system.

7. Major Architectural Components
of the Web
InternetInternet
Browser
Database
Server
Client 1
Server A
Server B
Bank
Server
URL
HTTP
TCP/IP
Browser
Client 2 HTTP
Server
App.
Server
index.html
Bank
Server
prog1.class
prog2.jsp

8. Various E-Cash Payment
Methods
Credit card
Digital Currency
E-Wallets
Peer-to-Peer Methods
Smart card
Micro-payments

9. Credit Cards
A very common method of payment
Cards are issued by a bank
Unique 16-digit number (including check digits) and an
expiration date
Third party authorization companies verify purchases

10. Credit Card - IT
Physical Data Flow
CARD
Reader
56k bps
modem
3rd
Party
Authorization
System
(Visa)
Customer
Bank
System
Card Info,
Signature
Authorization
Program
Request
Authorization
EFT
POS Terminal OK!
Store’s
Bank
System
Customer
EFT

11. Credit Card Fraud
A major problem for E-commerce
The merchant has no legal proof of purchase unless the
buyer uses authentication certificate
Companys such as Visa, nochargeback.com and
CyberCash (now VeriSign) are working to limit fraud:
Visa has established high risk business models and best practices
info for merchants
Nochargeback.com has lists of fraudlent cards, e-mail addresses
and postal addresses
VeriSign/CyberCash has employed AI to catch frauders

12. Digital Currency
Digital cash accounts like traditional bank accounts
Buyers deposit cash in the account and spend it at E-
Commerce sites (acct # is passed using secure
proprietary protocol)
E-Commerce merchants can feel sure of payment
Customers do not need a credit card and spending is
limited to account balance
www.ecash.com

13. E-Wallets
Established by financial institutions in partnership with
member E-Commerce sites
Allows customer to submit billing and shipping info with
one click at member sites
Also can store e-Cheques, e-Cash and credit card
information
Not as popular as originally projected
Entrypoint’s InfoGate offers an e-wallet

14. Peer-to-Peer Methods
Digital cash via email (eCash.com)
PayPal.com – digital payment system
Acts as a trusted third party (e.g. auction purchase)
To send money:
Sender sets up an account and requests to send payment
Sender places payment into the receivers account by credit-card
Reciever is notified of payment via email
Receiver can transfer funds to bank account or request a cheque

16. Smart Cards
Cards with computer chips embedded on their faces –
very common in Europe
Used for health care, transportation, ID, retail, pay
phones, loyalty programs, banking machines
Smart card readers interface with card and request user
PIN for access
Bank machines can load cards with cash and then
merchants can download cash from card
Returns anonymity of purchase to customer
GemPlus, MasterCard are leading supplier of SCs

17. Smart Cards
Magnetic stripe
140 bytes
Memory cards
1-4 KB memory, no processor
Optical memory cards
4 megabytes read-only (CD-like)
Microprocessor cards
Embedded microprocessor
8-bit processor, 16 KB ROM, 512 bytes RAM

18. Smart Card Structure
Contacts:
Epoxy
Microprocessor
Contacts
Card
(Upside-down)
Contacts (8)SOURCE: SMART CARD FORUM

19. Micro-Payments
Long distance phone call charge is an example of a
micro-payment
Digital Equipment Corporatiion (DEC) researchers
originally envisioned MPs:
Payment per newspaper article (Rs 0.32)
Payment by stock quote (Rs 0.064)
Payment per click (Qpass, Inc)
Has not been popular, instead advertisers pay for info,
or customers pay flat rates..

21. Advantage and Disadvantage of E-
Cash payment System
Advantage:
More efficient
Low transaction costs
Anybody can use it,unlike credit cards, and does not require
special authorization
Disadvantage:
Perfect copying of transactions is possible
Vulnerability to world-wide attack
Lack of anonymity
Money laundering

22. E-Cash Application
There are several application of E-cash payment system
 During purchasing something at online like
software,accessories,books,clothes etc.
In railway ticket booking, aeroplane ticket booking it is used.
Purchase something in a shop.

23. References
 http://www.creditcardmenu.com.
 http://www.cash.ch.
 http://www.business.com/directory/financial_services/banking/electronic_t
ransactions/payment_systems.
 http://www.arraydev.com
 E-Commerce and Web Technologies, K Bauknecht.
 Robert E Litan, Alice M Rivlin. The Economic Payoff from the Internet
 Revolution. Business & Economics, 2001.
 The Future of Banking. Business & Economics, 2002.
 Smart Card Forum

24. THE END