This document discusses various electronic payment systems. It describes methods of electronic payment such as electronic cash, software wallets, smart cards, and credit/debit cards. It also outlines requirements for e-payments like atomicity and non-repudiation. Several modes of e-payment are explained in detail, including payment cards, electronic cash, check free, check share, internet cash, wallets, and smart cards. Benefits and drawbacks of different systems are provided.

1. E-PAYMENT SYSTEMS

2. INTRODUCTION
 E payment is a subset of an e-commerce
transaction to include electronic payment for
buying and selling goods or services offered
through the Internet.
 Generally we think of electronic payments as
referring to online transactions on the internet, there
are actually many forms of electronic payments.

3. E-PAYMENT SYSTEMS
 To transfer money over the Internet
 Methods of traditional payment
 Check, credit card, or cash
 Methods of electronic payment
 Electronic cash, software wallets, smart cards, and credit/debit
cards
 Scrip is digital cash minted by third-party organizations

4. REQUIREMENTS FOR E-PAYMENTS
 Atomicity
 Money is not lost or created during a transfer
 Good atomicity
 Money and good are exchanged atomically
 Non-repudiation
 No party can deny its role in the transaction
 Digital signatures

5.  Payment Cards
 Electronic Cash
 Check free
 Check share
 Internet Cash
 Wallet
 Smart Card 5
Modes of E-Payment

6. PAYMENT CARDS
 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.
 Charge cards
 such as one from American Express, carries no
preset spending limit.
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7. PAYMENT ACCEPTANCE AND PROCESSING
 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.
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8. PAYMENT ACCEPTANCE AND PROCESSING
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9. ADVANTAGES AND DISADVANTAGES
OF PAYMENT CARDS
 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.
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10. ELECTRONIC CASH
 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
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11. HOLDING ELECTRONIC CASH: ONLINE AND
OFFLINE CASH
 Two approaches to holding cash: online storage and
offline storage.
 Online cash storage means that an online bank is
involved in all transfers of electronic cash.
 Offline cash storage is the virtual equivalent of money
you keep in your wallet. However, it must prevent
double or fraudulent spending.
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12. ADVANTAGES OF ELECTRONIC CASH
 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.
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13. DISADVANTAGES OF ELECTRONIC CASH
 Electronic cash provides no audit trail.
 Because true electronic cash is not traceable,
money laundering is a problem.
 Electronic cash is susceptible to forgery.
 So far, electronic cash is a commercial flop.
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14. CHECK FREE
 CheckFree provides online payment processing
services to both large corporations and individual
Internet users.
 CheckFree permits users to pay all their bills with
online electronic checks.
 CheckFree provides part of the technology that the
Web portal Yahoo! uses to provide its Yahoo! Bill
Pay service.
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15. CHECK FREE
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16. CLICK SHARE
 Clickshare is an electronic cash system aimed at
magazine and newspaper publishers.
 Users with an ISP that supports Clickshare are
automatically registered with Clickshare.
 Clickshare tracks users with the standard HTTP
Web protocol.
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17. ELECTRONIC WALLETS
 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.
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18. ELECTRONIC WALLETS
 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
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19. HOW TO ACCESS E-WALLETS
USER
REGISTRATION
POST JOB IN
WORKROOM
SEE PROPOSAL
PUT MONEY
INTO E-WALLET
ACCEPT JOB
APPROVE
PAYMENT
REQUEST
RELAESE
FUNDS TO
PROJECT FROM
WALLET

20.  The W3C Electronic Commerce Interest
Group (ECIG) developed a set of standards called
the the Common Markup for Micropayment Per-
Fee-Links.
 This standard identifies existing system
micropayment types of online connections, stored-
value systems, and combined online-offline
systems.
THE W3C PROPOSED STANDARD
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21. SMART CARD
 A smart card is a plastic card with an embedded microchip
containing information about you.
 A smart card can store about 100 times the amount of
information that a magnetic strip plastic card can store.
 A smart card contains private user information, such as
financial facts, private encryption keys, account
information, credit card numbers, health insurance
information, etc.
 E.g. Mondex smart card , Octopus smart card 21

22. MONDEX SMART CARD
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23. PEER-2-PEER PAYMENTS
 Online financial transfer
through e-mail address.
 Reduces risk of fraud &
overdrawn a/c.
 Example PayPal services.

24. E-PAYPAL SYSTEM
 It enables the merchants or individuals to withdraw cash
from their PayPal accounts.
 Allows customers to send their transaction money quickly &
safe to anyone.
 To use it one should must get registered themselves .

25. E-CASH
 Online payments via debit cards, credit cards or
smart card are the examples of e-money
transactions.
 E Cash is transferred directly from customer’s
desktop to the merchant’s site.

26. HOW TYPICAL E-CASH SYSTEM
WORKS?

27. E-CHEQUE
 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

28. E-CHEQUE WORKING

29. ELECTRONIC FUND TRANSFER
 It is one of the oldest methods to transfer money.
 It is the groundwork of groundless and cheque-less
culture, it is used to transfer money without any
paper money changing hands.

30. BENEFITS OF EFT
Simplified accounting
Improved efficiency
Reduced administrative costs
Improved security

31. BENEFITS OF ELECTRONIC
PAYMENT SYSTEM
BENEFIT TO
BUYERS
BENEFITS TO
SELLERS

32. •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

33. • 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

34. 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
•When used properly the electronic aspects of purchasing and
prepaid cards can increase internal controls over high volumes .
4. Better control

35. • 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
TYPES OF TRANSACTIONS IN EPS