This document discusses various electronic payment methods. It begins by defining e-payments and noting they can take many forms beyond just online transactions. It then covers traditional methods like cash, checks and credit/debit cards. Different payment options are selected based on factors like convenience, traceability, and fraud protection. Credit cards are explained in detail, outlining their business model. Requirements for e-payment methods include enabling payments while preventing fraud and ensuring privacy and scalability. Pros and cons of e-payments are provided. Various specific e-payment options are then outlined, including digital currency, e-wallets, peer-to-peer payments, smart cards, and micro-payments. Credit card fraud and ways to limit it are

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. 3
TRADITIONAL PAYMENT METHODS
Payment: The transfer of money from one
individual or legal entity to another
 Cash
 Personal Cheques
 Money orders (Bank note)
 Credit cards
 Debit cards

4. 4
SELECTION OF PAYMENT METHOD
 Based on:
Convenience
Trace-ability
Repudiation
Financial risk
Fraud protection
 Attacks on traditional methods?

5. 5
CREDIT CARDS
 A very common method of payment
 Cards are issued by a bank
 Unique 16-digit number (including check
digits) and an expiration date
 Third party authorization companies verify
purchases

6. 6
CREDIT CARD - BUSINESS MODEL LOGICAL
MONEY FLOW
Customer
Customer
Bank
Store
Visa
(3rd Party)
1. Charge
2. Credit
Authorization
3. Clearance/Settlement
4. Payment
What can you do if your statement shows
a fraudulent purchase?
Store’s
Bank

7. 7
REQUIREMENTS OFE-PAYMENT METHODS
 Enable an honest customer to convince a seller to
accept payment
 Prevent a dishonest customer from making
unauthorized or fraudulent payments
 Ensure the privacy of honest participants
 Scalable to very large numbers of customers
 Integrate with existing and evolving systems
NOT EASY!

8. 8
E-PAYMENT PROS/CONS
 Pros:
 Potential for great flexibility
 Low transaction costs
 Rapid and diverse purchase power
 Cons:
 Perfect copying of transactions is possible
 Vulnerability to world-wide attack
 Lack of anonymity, potential for privacy intrusion

9. 9
VARIOUS E-PAYMENT METHODS
 Credit and Debit card
 Digital Currency
 E-Wallets
 Peer-to-Peer Methods
 Smart card
 Micro-payments
 B2B

11. 11
CREDIT CARD FRAUD
 A major problem for E-commerce
 The merchant has no legal proof of purchase
unless the buyer uses authentication
certificate
 Companys such as Visa, nochargeback.com
and CyberCash (now VeriSign) are working to
limit fraud:
 Visa has established high risk business models
and best practices info for merchants
 Nochargeback.com has lists of fraudlent cards, e-
mail addresses and postal addresses
 VeriSign/CyberCash has employed AI to catch
frauders

12. 12
DIGITAL CURRENCY
 Digital cash accounts like traditional bank accounts
 Buyers deposit cash in the account and spend it at
E-Commerce sites (acct # is passed using secure
proprietary protocol)
 E-Comm merchants can feel sure of payment
 Customers do not need a credit card and spending
is limited to account balance
 www.ecash.com

13. 13
E-WALLETS
 Established by financial institutions in
partnership with member E-Commerce sites
 Allows customer to submit billing and
shipping info with one click at member sites
 Also can store e-Cheques, e-Cash and credit
card information
 Not as popular as originally projected
 Entrypoint’s InfoGate offers an e-wallet

14. 14
PEER-TO-PEER METHODS
 Digital cash via email (eCash.com)
 PayPal.com – digital payment system
 Acts as a trusted third party (e.g. auction purchase)
 To send money:
 Sender sets up an account and requests to send payment
 Sender places payment into the receivers account by credit-card
 Reciever is notified of payment via email
 Receiver can transfer funds to bank account or request a cheque
 There is also a request payment method
 FOR FREE .. ? What is the their business model ?

16. 16
SMART CARDS
 Cards with computer chips embedded on their
faces – very common in Europe
 Used for health care, transportation, ID, retail, pay
phones, loyalty programs, banking machines
 Smart card readers interface with card and request
user PIN for access
 Bank machines can load cards with cash and then
merchants can download cash from card
 Returns anonymity of purchase to customer
 GemPlus, MasterCard are leading supplier of SCs

17. 17
MICRO-PAYMENTS
 Long distance phone call charge is an example of a
micro-payment
 Digital Equipment Corporatiion (DEC) researchers
originally envisioned MPs:
 Payment per newspaper article ($0.005)
 Payment by stock quote ($0.001)
 Payment per click (Qpass, Inc)
 Has not been popular, instead advertisers pay for
info, or customers pay flat rates … Why?

18. 18
WHY HAVE MICRO-PAYMENTS FAILED?
 Overly complicated for customer and
business – technology & accounting
 Income is very dependent on customer use
(difficulties in cashflow management)
 Customer anxiety – could act as a deterent
 Difficulties in standardization – lost of
different approaches, variant media

19. 19
B2B
 B2B transactions are the fastest area of $ growth
on the web
 B2B transactions are substantially larger than B2C
 Paymantech is major provider:
 24/7 availability, all manner of EFT supported
 many management tools and reporting methods
 Ecredit.com offers real-time automated credit
approval and financing
 TradeCard offers comprehensive B2B E-commerce
facilities on an international scale

20. .
Questions..??

21. Thank yu
Harshit, Rajat & Yash