E-Payment methods
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This document discusses electronic payment methods. It defines electronic payment as a financial exchange that occurs online between buyers and sellers using digital payment instruments like encrypted credit card numbers or digital cash. The document then outlines traditional cash and check-based payment methods before examining various electronic payment options in more detail. These electronic payment methods include credit and debit cards, digital currencies, e-wallets, peer-to-peer payments, smart cards, micro-payments, and business-to-business exchanges. The document explores the business models and processes underlying different electronic payment systems as well as their pros and cons.
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E-Payment methods
- 1. E-Payment Methods Group no. 4 Muhammad Irfan Shahid Course: Electronic-Commerce University of Education, Okara Campus
- 2. What Electronic Payment system is? Electronic Payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an intermediary, or by a legal tender. Electronic payment system is a system which helps the customer or user to make online payment for their shopping. University of Education Okara Campus 2001
- 3. University of Education, Okara Campus Payment: The transfer of money from one individual or legal entity to another Cash Personal Cheques Money orders (Bank note) Traditional Payment Methods
- 4. University of Education Okara Campus2001 4 Selection of Payment Method Based on: Convenience Trace-ability Repudiation Financial risk Fraud protection
- 5. Various E-Payment Methods Credit and Debit card Digital Currency E-Wallets Peer-to-Peer Methods Smart card Micro-payments B2B University of Education Okara Campus 2001
- 6. Credit Card The most popular payment method Cards are issued by a bank Unique 16-digit number (including check digits) and an expiration date Third party authorization companies verify purchases University of Education Okara Campus 2001
- 7. Credit Card - Business Model Logical Money Flow University of Education Okara Campus Customer Customer Bank Store Visa (3rd Party) 1. Charge 2. Credit Authorization 3. Clearance/Settlement 4. Payment Store’s Bank 2001
- 8. 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 University of Education Okara Campus 2001
- 9. E-Cash Concept 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: e.g., merchant present e-cash to issuing back for deposit once goods or services are delivered University of Education Okara Campus 2001 Merchant Consumer Bank 1 2 3 4 5
- 10. 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 University of Education Okara Campus 2001
- 11. 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 University of Education Okara Campus 2001
- 12. 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 University of Education Okara Campus 2001
- 13. Micro-Payments Long distance phone call charge is an example of a micro-payment Digital Equipment Corporation (DEC) researchers originally envisioned MPs: • Payment per newspaper article ($0.005) • Payment by stock quote ($0.001) • Payment per click (Qpass, Inc.) University of Education Okara Campus 2001
- 14. 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 University of Education Okara Campus 2001
- 15. 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 University of Education Okara Campus 2001
- 16. References • http://www.slideshare.net/Vishalchd11/the-e-payment-systems • http://www.slideshare.net/birubiru/electronic-payment-systems-705132 • http://www1.american.edu/initeb/sm4801a/epayment3.htm • http://en.wikipedia.org/wiki/Payment_system • http://www.slideshare.net/birubiru/eps-6953955 • http://www.irs.gov/uac/Electronic-Payment-Options-Home- Page • http://www.slideshare.net/VishalSancheti1/e-payment- 10708085 • http://pages.ebay.com/help/pay/methods.html University of Education Okara Campus 2001
- 17. Thank YouThank You University of Education Okara Campus 2001