The document discusses electronic payment systems, defining them as online financial exchanges facilitating payments between buyers and sellers in e-commerce. It highlights problems with traditional payment methods, including convenience, security, and coverage issues, and outlines various modes of electronic payments such as credit/debit cards, smart cards, and e-cash. Advantages include efficiency and user-friendliness, while disadvantages cover security risks and higher costs.

1. Electronic Payment System
By Prakhar Gupta

2. Topic on which we are going to
discuss
• What is Electronic payment system.
• E-payment system.
• Problem with Traditional payment methods.
• Problem in implementation of electronic payment.
• Some of the modes of electronic payments.
• Advantage & Disadvantage Of Electronic Payment.

3. What Electronic Payment system is?
Electronic Payment is a financial exchange that
takes place online between buyers and sellers.
Electronic payment system is a system which helps
the customer or user to make online payment for
their shopping.
E-Commerce or Electronics Commerce sites use
electronic payment where electronic payment
refers to paperless monetary transactions.

4. E-payment system
To transfer money over the Internet
Methods of traditional payment
Cheques, or cash
Methods of electronic payment
Electronic cash, EFT, smart cards, and
credit/debit cards

5. Problem with Traditional payment methods
Lack of convenience: customer leave the
online platform and use the telephone or send
cheques in order to make payments.
Lack of security: provide the card/payment
account detail over telephone and/or by mail.
Lack of coverage

6. Problem with Traditional payment methods
(cont.)
Lack of support for micro transaction:
Many payments made over the internet is
sufficient low value that the cost of phone
may be too high.

7. Problem in implementation of electronic
payment.
Preventing double spending ,
Making sure neither the customer nor the merchant
can make an unauthorized transaction,
Prevent customer information confidential.

8. Some of the modes of electronic
payments are following.
Credit Card
Debit Card
Smart Card
E-Cash
Electronic Fund Transfer (EFT)

9. Credit card
Credit card is small plastic card with a unique
number attached with an account.
It has also a magnetic strip embedded in it which is
used to read credit card via card readers.
When a customer purchases a product via credit
card, credit card issuer bank pays on behalf of the
customer and customer has a certain time period
after which he/she can pay the credit card bill.

10. Debit card
 Debit card, like credit card is a small plastic card with a
unique number mapped with the bank account number.
 It is required to have a bank account before getting a
debit card from the bank.
 The major difference between debit card and credit card is
that in case of payment through debit card, amount gets
deducted from card's bank account immediately and
there should be sufficient balance in bank account for the
transaction to get completed. Whereas in case of credit
card there is no such compulsion.

11. Smart card
 Smart card is again similar to credit card and debit card in
appearance but it has a small microprocessor chip
embedded in it.
 It has the capacity to store customer work
related/personal information. Smart card is also used to
store money which is reduced as per usage.
 Smart cards are secure as they stores information in
encrypted format and are less expensive/provides faster
processing.
 Mondex and Visa Cash cards are examples of smart cards.

12. 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.

13. Electronic Fund Transfer
It is a very popular electronic payment method to
transfer money from one bank account to
another bank account.
 Accounts can be in same bank or different bank.
Fund transfer can be done using ATM (Automated
Teller Machine) or using computer.

14. Advantage Of Electronic Payment
More efficient,
Convenience
Time saving
User-friendly
Expenses control

15. Disadvantage Of Electronic Payment
Higher cost
Delayed access to cash
Increased security risk
Authentication
Frauds