Electronic payment systems have revolutionized business by allowing for paperless monetary transactions and reducing paperwork, transaction costs, and labor costs. Common electronic payment methods include credit cards, debit cards, smart cards, e-money, electronic funds transfer, and e-wallets. These systems provide benefits like being user-friendly and faster than manual processing, helping businesses expand their markets. However, businesses must pay processing fees to accept these electronic payments.

1. ELECTRONIC PAYMENT SYSTEMS
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2. E-Commerce or Electronics Commerce sites use electronic payment where electronic payment refers
to paperless monetary transactions.
Electronic payment has revolutionized the business processing by reducing paper work, transaction
costs, labour cost.
Being user friendly and less time consuming than manual processing, helps business organization to
expand its market reach / expansion.
Credit Card
Debit Card
Smart Card
E-Money
Electronic Fund Transfer (EFT)
E- Wallet
ELECTRONIC PAYMENT SYSTEMS

3. Types of EPS
E Cash / E Money:
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-Wallet:
The E-wallet is another payment scheme that operates like a carrier of e-cash and other information.
The aim is to give shoppers a single, simple, and secure way of carrying currency electronically.
Trust is the basis of the e-wallet as a form of electronic payment.

4. Smart Card:
A smart card, is any pocket-sized card with embedded integrated circuits which can process data.
This implies that it can receive input which is processed and delivered as an output.
Types of EPS
Credit Card :
 It is a Plastic Card having a Magnetic Number and code on it.
 It has Some fixed amount to spend.
 Customer has to repay the spend amount after sometime.
Debit Card :
 Similar to Credit card on coding and encryption.
 Purchase limit depends on the available balance in the account.

5. Types of EPS (Electronic Payment Systems) - Interfaces
No Security Model
Examples : Bill payments, Mobile Recharges on calling to customer care.

6. Third Party Processor

7. Processing payments using encrypted credit cards
Customer
Merchant's
server
Send encrypted credit
card number
Send information
Online credit
card
processors
Customer’s
bank
Monthly
purchase
statement
verify
authorize
OK
Check for credit card
authenticity and sufficient
funds

8. Sequence of steps for secure transaction
1. Customer presents card to the merchant
2. Merchant validates customer’s identity as the owner of the card
3. Merchant relays credit card charge & signature to its bank
4. Bank relays this info to customer’s bank for authorization approval
5. Customer’s bank returns authentication & authorization to the
merchant
Encryption& credit cards

9. Secure Electronic Transaction (SET) Protocol

10. Blowfish provides a good encryption rate in
software and no effective cryptanalysis of it has
been found to date.
However, the Advanced Encryption
Standard (AES) now receives more attention.
Widely Applicable E Payment System

11. Pros
 It’s easier for customers to buy your products or services.
 You can add custom loyalty programs, gift cards and customized e-commerce websites.
 You can integrate it with accounting software, making it easier to manage money.
 You don’t have to waste as much time depositing paper checks and cash at the bank.
Cons
 You have to pay a processing fee to accept plastic and some other electronic payments.
 If you use a traditional physical credit card terminal, monthly or annual fees might apply.
 Some payment processing services lock you into contracts that are costly to terminate early.
 To accept credit cards you usually need a merchant account, which is a bank account where payments
are deposited. Many electronic payment systems include one as a built-in feature. Note that you don’t
need a merchant account if you use a third-party processor such as PayPal.
Pros and cons