E-cash and digital wallets allow for electronic payments by transmitting payment information from one computer to another. The U.S. government initiated a campaign in 1996 to create an electronic payment system to reduce paper checks. Early e-cash systems issued unique, anonymous, and reusable digital funds to consumers through banks. Digital wallets now serve similar functions to physical wallets by storing payment cards and customer information for more efficient online shopping. Future developments may include automatic bill payment, loyalty point redemption, and device-to-device payments using digital wallets.

2. E- CASH
SMART CARDS CREDIT CARDS
E- WALLETS

4. • In 1996, the U.S. government initiated a campaign to create a
universal, all-electronic payment system to decrease the nearly 70
billion paper checks
• In 1998, the U.S. Treasury Department sponsored a pilot program to
test the workability of paying participating federal contractors with e-
checks
• The second generation of e-cash appeared in the late 1990s
Evolution of E Cash

5. E Cash
• A system that allows a person to pay for goods or services by
transmitting a number from one computer to another.
• Like the serial numbers on real currency notes, the E-cash numbers
are unique.
• This is issued by a bank and represents a specified sum of real money.
• It is anonymous and reusable
E Cash

6. E Cash Processing

7. 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
Merchant
Bank
5
4
1
2
Consumer
3
E Cash Processing

8. • Electronic cash transactions are more efficient and less costly than
other methods
• The distance that an electronic transaction must travel does not
affect cost.
• The fixed cost of hardware to handle electronic cash is nearly zero.
• Electronic cash does not require that one party have any special
authorization
Advantages of E Cash

9. • Electronic cash provides no audit trail
• Because true electronic cash is not traceable, money laundering is a
problem.
• Electronic cash is susceptible to forgery
Problems with E Cash

10. Future of E Cash

11. Digital
Wallet

12. E Wallet or Digital Wallet
is a payment scheme that
operates like a carrier of
E Cash

14. 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
• stores shipping and billing information, including a consumer’s first and
last names, street address, city, state, country, and zip or postal code
Functions of E Wallet

15. Based on where the information is stored
Server Side Electronic Wallet:
• A server side electronic wallet stores a customer information on the
remote server belonging to a particular merchant or wallet publisher
Client Side Electronic Wallet:
• A client side electronic wallet stores customer information on his/her own
computer.
• Many of the early electronic wallet were client side wallet that require
users to download the wallet software
Types of E wallet

16. Closed wallet:
A closed wallet is one that
a company issues to its
consumers for in-house
goods and services only.
These instruments do not
carry the advantage of
cash withdrawal or
redemption
Types of E wallet
Semi-closed wallet
A semi-closed wallet can
be used for goods and
services, including
financial services, at select
merchant locations or
establishments that have a
contract with the issuing
company to accept these
payment instruments.
Open wallet:
Such wallets can be used for
purchase of goods and
services, including financial
services such as funds
transfer at merchant
locations or point-of-sale
terminals that accept cards,
and also cash withdrawals at
automated teller machines
or business correspondents
Based on Usage

17. Decide on an online site where you would like to shop
Download a wallet from the merchant’s website/Sign up on the website
itself to create your Digital wallet
Transfer fund from your bank account into your digital wallet
When you are ready to buy, click on the wallet button, the buying
process is fully executed
The Digital Wallet’s will check if there is enough E Cash in the wallet and
if yes, then the transaction is completed and the purchase is made
Process

18. Examples

19. • Mobile payment system developed by Google
• Allows users to store debit cards, credit cards, loyalty cards etc
• Uses Near Field Communication to make secure payments fast and
convenient by tapping the phone on pay press enable terminal
• Works with 30,00,000+ MasterCard merchant locations
Google Wallet

20. Server side electronic wallet offered by Yahoo!
Lets users store information about several major credit and charge
cards
Yahoo Wallet

21. h
• Convenience: The e-wallet makes online shopping easier because it fills in
the fields in an online order form automatically, saving you the trouble of
doing it yourself
• Competitive Advantage: This is also a great advantage for online
merchants, because customers sometimes abandon online purchases if
they feel that the order form is too confusing or frustrating
• Greater revenue opportunities: E wallets open up a new aspect of
payment methods in large markets introducing many business
opportunities and greater potential revenue
Advantages of E Wallet

22. • System Outages: Information for E wallets are stores on the cloud of
business server, therefore the risk of a system malfunction or shut
down is always present.
• Security: Companies must ensure that their customers’ information is
encrypted and well protected.
• Investment: The initial monetary investment for building a functional
E wallet application is quite large as it requires the development of
the software as well as continual maintenance.
Disadvantages of E Wallet

23. • Automatic Bill Payments: Will be able to make bill payments on behalf of
the used by scheduling payment intervals for electronic bills and invoices
• Loyalty redemption: Real time reporting of points accrued under loyalty
schemes
• Personal Information access: E wallet will become a single access point to
all personal information including medical, insurance, mortgage etc.
• Preemptive Purchasing: It can make a list of purchases based on your
purchase habits and remind the consumer to make these purchases on a
regular basis
• Device to device person to person payments: It’ll be possible to transfer a
payment from one person to another simply by pointing two “wallet
enabled devices” at each other
Future of E wallet

25. • Digicash Company Brochure.
• Gpayments White Paper
[www.gpayments.com/pdfs/Gpayments_ewallet_whitepaper.pdf]
• First Bank to Launch Electronic Cash [Publications from Digicash, October
23, 1995].
• Gearing up for e-cash. [Association Management v48, n1 (Jan 1996):L14-
L15].
• An Introduction to E-Cash [Publications from Digicash]
• Anderson, Howard, Showdown over e-cash [Upside v8, n1 (Jan 1996):24-
36].
• Bers, Joanna Smith [Mark Twain Bank licenses ecash.
Bank Systems & Technology v32, n12 (Dec 1995):14].
References

26. Thank You!