Introduction
Online payment system
payment(EFT , e-cash ,e check , e-wallet,micropayment)
Virtual
customer
businessman
product or service
1.Online payment system is a financial exchange that
takes place online between buyers and sellers
2.There are different methods to pay electronically like
credit cards , electronic cash etc.
Traditional payment scheme
• Payment(credit card ,cash , check)
customer businessman
• Produce or service
In earlier days ,conventional cash were most popular
because they were the only payment type available
However with time banks cane into existence and the
society underwent a financial revolution.
But all these modes of the conventional payment and
settlement process act as a bottleneck in the fast
moving electronic commerce environment
Problems in traditional payment
system
Lack of convenience
Lack of security
Lack of coverage
Lack of eligibility
Lack of support for micro transactions
PAYMENT CARDS
CREDIT CARDS
DEBIT CARDS
CHARGE CARDS
SMART CARDS
CREDIT CARDS
Two of credit cards on the market.
Credit cards issued by credit companies(e.g. Master
card, visa) and major banks (SBI, HDFC etc.).
Credit cards issed by the departmental stores(e.g.
Boygner) , oil companies(e.g. Shell).
DEBIT CARDS
Plastic card with a unique number.
Requires a bank account.
No interest charges related to this card.
CHARGE CARDS
Are similar to credit cards except they have no
revolving credit line so they have make payments every
month.
SMART CARDS
It similar to credit card and debit card in appearance bt it
has a small microprocessor chip embedded in it.
ELECTRONIC CASH
In case of e-cash, both customer and merchant have to
sign up with the bank or company issuing e-cash.
Enables transactions between customers without the
need of banks.
E-wallet is a card with microchip.
Replaces cash & coins for small ticket purchases like
road/bridges tolls, pay phones.
It is convenient & safe way to carry less cash.
Example Microsoft Wallet.
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.
HOW TYPICAL E-CASH SYSTEM WORKS?
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
E-CHEQUE WORKING
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.
Benefits of EFT
Simplified accounting
Improved efficiency
Reduced administrative costs
Improved security
PHASES IN E-PAYMENT
REGISTRATION
The payee must register themselves with the site
of online service providers.
By filling a form and creating user ID.
A Payee can access subscribed billing information
and payments, simply by login his ID.
Invoicing
In this phase, payee obtains an invoice for payment
from the payor .
PAYMENT SELECTION AND
PROCESSING
In this the payer selects type of payment (card based,
e-cash,e-cheque) based on the type of payment payee
accepts.
PAYMENT AUTHORISATION
AND CONFIRMATION
In this, the acquirer on receiving
payment details from the payee
authorises the payment and
issues a receipt containing the
success or failure of payment.
BENEFITS OF ELECTRONIC
PAYMENT SYSTEM
BENEFIT TO BENEFITS TO
BUYERS SELLERS
1. Convenience • Electronic payment methods provide a wide range of payment options and
of global enhanced financial management tools through which individuals can pay for
numerous different types of transactions ranging from parking payments to
acceptance travel tickets pr payments in foreign currency.
2. Universal • With electronic payment methods payments can be made over the phone, on
acceptance the internet, and through the post and accepted everywhere.
3. Greater • Electronic payment system is safe and secure as it follows strict encrypted
secure system for making payments keeping buyer’s identity and details
security completely confidential and reduced liability for stolen or misused cards.
4. Consumer • The electronic payment system provides additional insurance by
facilitating disputes resolution in the case of unsatisfactory
protection receipt of goods and services .
4. Accessibility • E-payment system allow consumers to transfer funds, purchase
stocks, and offer a variety of other services without having to
to immediate handle physical cash. Using credit card it is very easy to make
credit payments.
6. Better • Electronic payment also provides the ability to control payment
control over for goods and services over time by allowing buyers to pay at will
whenever they want or have sufficient funds to make payments.
payments
BENEFITS TO SELLERS
1. Speed and • EPS ensure faster processing of transaction from
verification and authorization to clearing and settlement .
security It reduces the visibility of information.
• EPS provides companies freedom from more costly labour,
2. Reduces cost materials and accounting services hat are require in paper
based processing.
• It leads to better management of cash flow, inventory and
3. Efficiency financial planning due to swift bank payment.
• When used properly the electronic aspects of purchasing and
4. Better control prepaid cards can increase internal controls over high volumes
.
SECURITY ISSUES
1. Confidential 4. Authenticity
2. Integrity 5. Encryption
3. Availability 6. Audit ability
7. Non – Rejection
