Unit v
- 1. UNIT=V E-Payment Systems Online Payment – Payments Cards – Electronic Cash – Electronic Cheques - Electronic Wallets – Debit Cards- Credit Cards – Smart Cards – – Stored Value Cards – Banking : Net Banking, Mobile Banking - Internet Technologies E-commerce sites use electronic payment, where electronic payment refers to paperless monetary transactions. Electronic payment has revolutionized the business processing by reducing the paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than manual processing, it helps business organization to expand its market reach/expansion. Listed below are some of the modes of electronic payments − Credit Card Debit Card Smart Card E-Money Electronic Fund Transfer (EFT) Credit Card Payment using credit card is one of most common mode of electronic payment. 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. It is usually credit card monthly payment cycle. Following are the actors in the credit card system. The card holder – Customer
- 2. EMV is short for Europay, MasterCard, and Visa, the 1994 founders. It commonly refers to a credit cardwith a smart chip. The EMV standard is a secure technology that is used worldwide for all payments done with credit, debit, and prepaid EMV smart cards. The merchant − seller of product who can accept credit card payments. The card issuer bank − card holder's bank The acquirer bank − the merchant's bank The card brand − for example , visa or Mastercard. Credit Card Payment Proces Step Description Step 1 Bank issues and activates a credit card to the customer on his/her request.
- 3. Step 2 The customer presents the credit card information to the merchant site or to the merchant from whom he/she wants to purchase a product/service. Step 3 Merchant validates the customer's identity by asking for approval from the card brand company. Step 4 Card brand company authenticates the credit card and pays the transaction by credit. Merchant keeps the sales slip. Step 5 Merchant submits the sales slip to acquirer banks and gets the service charges paid to him/her. Step 6 Acquirer bank requests the card brand company to clear the credit amount and gets the payment. Step 7 Now the card brand company asks to clear the amount from the issuer bank and the amount gets transferred to the card brand company. 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 a debit card and a credit card is that in case of payment through debit card, the amount gets deducted from the card's bank account immediately and there should be sufficient balance in the bank account for the transaction to get completed; whereas in case of a credit card transaction, there is no such compulsion. Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card readily. Having a restriction on the amount that can be withdrawn in a day using a debit card helps the customer to keep a check on his/her spending.
- 4. Smart Card Smart card is again similar to a credit card or a debit card in appearance, but it has a small microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or personal information. Smart cards are also used to store money and the amount gets deducted after every transaction. Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards are secure, as they store information in encrypted format and are less expensive/provides faster processing. Mondex and Visa Cash cards are examples of smart cards.
- 5. E-Money E-Money transactions refer to situation where payment is done over the network and the amount gets transferred from one financial body to another financial body without any involvement of a middleman. E-money transactions are faster, convenient, and saves a lot of time. Online payments done via credit cards, debit cards, or smart cards are examples of emoney transactions. Another popular example is e-cash. In case of e-cash, both customer and merchant have to sign up with the bank or company issuing e-cash. 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 the same bank or different banks. Fund transfer can be done using ATM (Automated Teller Machine) or using a computer. Nowadays, internet-based EFT is getting popular. In this case, a customer uses the website provided by the bank, logs in to the bank's website and registers another bank account. He/she then places a request to transfer certain amount to that account. Customer's bank transfers the amount to other account if it is in the same bank, otherwise the transfer request is forwarded to an ACH (Automated Clearing House) to transfer the amount to other account and the amount is deducted from the customer's account. Once the amount is transferred to other account, the customer is notified of the fund transfer by the bank.
- 6. Netbanking This is another popular way of making e-commerce payments. It is a simple way of paying for online purchases directly from the customer’s bank. It uses a similar method to the debit card of paying money that is already there in the customer’s bank. Net banking does not require the user to have a card for payment purposes but the user needs to register with his/her bank for the net banking facility. While completing the purchase the customer just needs to put in their net banking id and pin. he advent of technology has enabled the speedy and accurate functioning of services throughout all sectors. Banks keep on incorporating technology to improve their service delivery and provide better services to their customers. One such example is mobile internet banking which has enabled account holders to carry out banking activities anytime and anywhere through a registered mobile connection.
- 7. What is Mobile Internet Banking? A service provided to clients by a bank or any financial institution to carry out financial transactions remotely using a smartphone or a tablet can be termed as mobile internet banking. The bank provides software that is usually called an app to its customers for mobile banking. This service is available on a 24-hour basis to its clients. Mobile banking requires internet to be connected to the device so as to perform all the transactions. The mobile banking apps features include obtaining account balances, the latest transaction list, payment of electronic bills and fund transfer, to name a few, from a client’s account to another account.
- 8. Mobile Internet Banking Services · Account balance enquiry · Mini-statements and checking of account history Alerts on account activity · Monitoring of term deposit Access to loan statements · Access to card statements Mutual funds/equity statements · Insurance policy management Fund transfer between linked accounts · Bill payments & thirds party fund transfers Check remote deposit · Portfolio management services Real-time stock · Status of request for credit, including mortgage approval & insurance coverage · Chequebook and card requests · ATM location Advantages of Mobile Internet Banking The bank is available to its customers all the time. Customers can transfer funds, invest or exchange currency without any interruptions. Customers receive statements directly in their email addresses which cause less wastage of paper. Customers can receive super-fast services. The camera in the smartphone helps the customer to click pictures and initiate requests.
- 9. The bank provides location-based services that ensure its customers security against frauds for transactions from unfamiliar locations. The banks sometimes reward their customers for transacting through the mobile banking application in the form of points or discount coupons. The mobile banking application is safe as it configure multi-level security feature like sending OTP to the registered mobile number of the customer for transactions to happen. Limitations of Mobile Internet Banking The banks might charge the customers an amount for using the service of mobile banking. The mobile banking service can be used by only those customers who have a smartphone. The account information is stored on the device. The customers may receive fake messages to disclose their financial details as hackers present themselves as financial advisors or lead banks.
- 10. How to use Mobile Internet Banking? The customer has to send an SMS to the bank’s mobile number so as to receive the User ID, Default MPIN and the link to download the application. Download the application from the link provided by the bank. The default MPIN has to be changed through application, WAP or by sending an SMS based on the preferred mode of operation. Then the registration process has to be completed through any of the following processes:
- 11. Customers have to Login to the internet banking service and then, select the e-service option and complete the indicated steps. The customers can register using the ATM cum Debit card at any ATM of the particular bank. The customer has to follow the steps: Mobile Registration > Mobile Banking Registration > Registration and then enter their registered mobile number. The customer can also register for mobile banking by submitting the registration form at their home branch for immediate activation. Difference between Mobile Internet Banking and Online Banking Mobile banking and online banking are closely related to each other, but some definite points distinguish between the two. Many of the activities performed through mobile banking are similar to online banking. Mobile banking is done using a smartphone or a tablet, whereas online banking uses a desktop or a laptop. One requires downloading the particular application of a bank in order to use the mobile banking facilities whereas, for online banking the customer requires to open the particular website of the bank. It is also worth noting that a person can use online banking on the smartphone as well. Mobile banking provides the following services to its customers: Making mobile check deposits Transferring money Paying bills Locating ATMs While online banking provides the following services to its customers: Viewing account balances at any time of the day
- 12. Viewing or printing statements Viewing images of checks Applying for loans or credit cards Different Mobile Internet Banking Applications State Bank Anywhere: This is the mobile banking app that can be used anywhere by the State Bank of India account holders. It can be downloaded from Play Store for free. To start using this app, the customer has to enter the account number after downloading the app. This app supports intra-bank, inter-bank and secured fund transfers. The customers can use the voice-assisted transactions to know the account balance, to obtain mini statement or recharge mobile. This app can also be used to pay bills. Punjab National Bank: The account holders of Punjab National Bank can use the PNB mobile banking app for their convenience. The customers can check the validity of their ATM. The customers can also analyze their transaction history and even check their account balance. The process is secured and also funds can be transferred to other accounts. IDBI Go Mobile: The IDBI mobile banking application ensures quick and swift banking operations. The app can perform various tasks apart from transferring funds and tracking account history. The app checks account transactions. The app can also be used for online shopping and credit card bill payments. The app can be downloaded from Play Store for free. Vijaya Bank: Vijaya Bank has the Vijaya Bank mobile banking application for its customers which can be downloaded for free from the Play Store by android users. The app allows its users to carry various banking operations like NEFT and IMPS, payment of bills and even ticket booking. The customers can transfer funds online, receive as much as 9 mini-transaction statements and balance inquiry.
- 13. Bank of India: The Bank of India mobile banking application can be downloaded for free from the Play Store by the account holders using android phones. It helps the customers to perform various operations anywhere. The application makes transactions easier for the customers. Allahabad Bank App: The Allahabad bank mobile banking app is a useful application for its customers. The app has attractive UI and simple functionality which helps in easy transactions. A customer can view as much as 7 mini-statements. Also, the users can make payments, recharge their mobile numbers with the help of this mobile banking app. v Mobile Internet Banking