e payment system

1. PRESENTATION
ON
ELECTRONIC PAYMENT
SYSTEMS
(EPS)
MADE BY:
NAIMIKSHA
(M.Sc IT – 1ST Yr)

2.  Definition
 Uses of Electronic Payment
 Requirements
 Types of E-Payment System
 Benefits of E- Payment
System
 Types of Transactions
 Security Issues
 Conclusion

3.  An e-commerce payment
system facilitates the acceptance of
electronic payment for online
transactions.
 Also known as a sample
of Electronic Data
Interchange (EDI), e-commerce
payment systems have become
increasingly popular due to the
widespread use of the internet-
based shopping and banking.
 EPSs enable a customer to pay for
the goods and services online by
using integrated hardware and

4.  An electronic payment is defined as
a payment services that utilize ICT,
including cryptography and
telecommunications networks.
 EPS increase efficiency, improve
security, enhance customer
convenience and ease of use.
 Electronic transfer: small but
growing.

6.  The various factors that have lead the
financial institutions to make use of electronic
payments are:
 Reliability:
 As in any other business activity, even in on-
line payment methods, the user expects a
reliable and an efficient system. Any on-line
payment system would fail, despite of it's
advanced technological features, if it fails to get
the users acceptance and pass their reliability
tests.
 Atomicity:
 Atomicity guarantees that either the user's on-line payment
transaction is completed or it does not take place at all. If
the current on-line payment transaction fails then it should
be possible to recover the last stable state. This feature
resembles the transactional database systems, in which
either a transaction is committed or rolled back.

7. Types
of EPS
Payment
Cards
E-Cash
E-Wallets E-Cheque

8.  Payment cards are all types of plastic cards
that consumers use to make purchases:
 Credit cards
such as a Visa or a MasterCard, has a preset
spending limit based on the user’s credit
limit.
 Debit cards
removes the amount of the charge from the
cardholder’s account and transfers it to the
seller’s bank.
 Smart cards
similar to a credit card; however it contains
an embedded 8-bit microprocessor and uses
electronic cash which transfers from the
consumers’ card to the sellers’ device.

9.  Open and closed loop systems will accept
and process payment cards.
 A merchant bank or acquiring bank is a bank
that does business with merchants who want
to accept payment cards.
 Software packaged with your electronic
commerce software can handle payment
card processing automatically.

11. Advantages:
• Payment cards provide fraud protection.
• They have worldwide acceptance.
• They are good for online transactions.
Disadvantages:
• Payment card service companies charge
merchants per-transaction fees and monthly
processing fees.

12.  Electronic cash is a general term that describes the
attempts of several companies to create a value storage
and exchange system that operates online in much the
same way that government-issued currency operates in
the physical world.
Concerns about electronic payment methods include:
• Privacy
• Security
• Independence
• Portability
• Convenience

13. 1) Consumer buys e-cash
from Bank
2) Bank sends e-cash bits to
consumer
(after charging that
amount plus fee)
3) Consumer sends e-cash to
merchant
4) Merchant checks with
Bank that e-cash is valid
(check for forgery or
fraud)
5) Bank verifies that e-cash is
valid
6) Parties complete
transaction
MERCHANTMERCHANT
BANK
CUSTOMERS
4
5
1
2
3

14.  ADVANTAGES:
 Electronic cash transactions are more efficient
and less costly than other methods.
 The distance that an electronic transaction
must travel does not affect cost.
 DISADVANTAGES:
 Electronic cash provides no audit trail.
 Because true electronic cash is not traceable,
money laundering is a problem.

15.  An electronic wallet serves a
function similar to a physical wallet:
• holds credit cards, electronic cash,
owner identification, and owner
contact information.
• provides owner contact information at
an electronic commerce site’s
checkout counter.
Some electronic wallets contain an
address book.

16.  Electronic wallets make shopping more efficient.
 Electronic wallets fall into two categories based
on where they are stored:
• Server-side electronic wallet
• Client-side electronic wallet
 Electronic wallets store shipping and billing
information, including a consumer’s first and
last names, street address, city, state, country,
and zip or postal code.
 E.g. Microsoft .NET passport ,yahoo Wallet.

17. USER
REGISTRATION
POST JOB IN
WORKROOM
SEE
PROPOSAL
PUT MONEY
INTO E-
WALLET
ACCEPT JOB
APPROVE
PAYMENT
REQUEST
RELAESE
FUNDS TO
PROJECT
FROM WALLET

18.  E-Cheque is the result of co-operation between
several banks, government entities, technology
companies and e-commerce organizations.
 These can be used for small and large
organizations.

20. BENEFITS OF E- PAYMENT
SYSTEM
BENEFITS TO
BUYERS
BENEFITS TO
SELLERS

21. BENEFITS TO BUYERS
• Electronic payment methods provide a wide range
of payment options and enhanced financial
management tools through which individuals can
pay for numerous different types of transactions
ranging from parking payments to travel tickets pr
payments in foreign currency.
1.
Convenience
of global
acceptance
• With electronic payment methods payments can be
made over the phone, on the internet, and through
the post and accepted everywhere.
2. Universal
acceptance
• Electronic payment system is safe and secure as it
follows strict encrypted secure system for making
payments keeping buyer’s identity and details
completely confidential and reduced liability for
stolen or misused cards.
3. Greater
security

22. • The electronic payment system provides
additional insurance by facilitating
disputes resolution in the case of
unsatisfactory receipt of goods and
services .
4. Consumer
protection
• E-payment system allow consumers to
transfer funds, purchase stocks, and offer
a variety of other services without having
to handle physical cash. Using credit card
it is very easy to make payments.
4.
Accessibility
to immediate
credit
• Electronic payment also provides the
ability to control payment for goods and
services over time by allowing buyers to
pay at will whenever they want or have
sufficient funds to make payments.
6. Better
control over
payments

23. BENEFITS TO SELLERS
• EPS ensure faster processing of
transaction from verification and
authorization to clearing and
settlement . It reduces the visibility
of information.
1. Speed
and
security
• EPS provides companies freedom
from more costly labour, materials
and accounting services hat are
require in paper based processing.
2.
Reduces
cost
• It leads to better management of
cash flow, inventory and financial
planning due to swift bank
payment.
3.
Efficiency

24. TYPES OF
TRANSACTIONS IN EPS
• It is used when you shop online at an
e-commerce site, such as Amazon .
1. A ONE
TIME
CUSTOMER
TO VENDOR
PAYMENT
• It is used when you pay a bill
through a regularly scheduled direct
debit from your checking account or
an automatic charge to your credit
card.
2.
RECURRING
CUSTOMER
TO VENDOR
PAYMENT
• In this, your bank offer a service
called online bill pay.
3.
AUTOMATIC
BANK TO
VENDOR
PAYMENT

25. Security Issues of EPS
Authentication
Integrity
Non-Repudiation
Privacy
Safety

26.  Advantages:
 Increased speed and convenience.
 Increased sales.
 Reduced transaction costs.
 Disadvantages:
 Security concerns.
 Disputed transactions.

27.  Expand Market beyond Traditional geographic
market.
 Override traditional marketing system into digital
marketing system.
 Made human life convenient as a person can pay
his payments online.
 Increasing the cardholder base will bring
challenges to banks:
Designing new products and services, managing
default rates and loyalty programs, etc.

28. THANKYOU

29. QUESTIONS ???