Online Payment Mechanism

8/4/2019 Online Payment Mechanism

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Amity Business School

Online Payment Mechanism

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INTRODUCTION

Electronic TransactionPayment of basic services

Electricity billsPurchase of movie or travel tickets

having gone online results in the need for development of

advanced, convenient and safe online payment options.

Barter systemUse of coin andpaper money

Tradingelectronically

over theinternet


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Different ways of online payment

Credit and Debit card

Smart cards

Paypal

Digital cash

Electronic fund transfer


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Different ways of online payment

Credit Cards & Debit Cards

Credit card transaction is preferred by the retailconsumer

Transaction takes place when the credit card holderorders the bank to make such a payment and the bankestablishes a line of credit in the name of card holder

As far as security is concerned, when using a credit card

physically, one signs a charge slip and the matching ofthis signature is required for the transaction to beauthenticated


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Debit cards largely similar to credit cards

The only difference is that here the transaction is linked to the

account of the consumer and there is a direct transfer of fundsfrom the consumers to the payees account. There is no line of

credit established

when using a debit card physically, apart from the signature

one needs to enter a secret pin to authenticate the transaction


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Smart Cards Another innovation that has come about in the online

environment is that of smart cards

Used by a certain group of people for money transactions

between them. example smart cards issued by colleges the user makes use of recharge machines that use currency

notes to load currency to his card. The card is then used to pay

at cafeterias, book stores etc that the college handles. The card

can also be used when paying tuition fees online. These cards are relatively safe as they cannot be misused too

due to the limited acceptance within the college community.


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PayPal

PayPal works as a third party settlement mechanism.

The way PayPal works is .

Consumer and vendor both open PayPal accounts.

They use credit or debit card to fund his PayPal accountand hence ends up sharing his details with PayPal only

When a transaction is made, the consumer directs PayPal

to pay a vendor, the vendor is given a cheque, bank transfer

or PayPal account deposit depending on his convenience facilitate commerce between individuals who are in different

countries or do not have compatible payment mechanisms


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Digital Cash An alternatives to constant credit card use over the internet is

digital cash.

Here the consumer buys currency online by using his credit

card only once Such digital cash has monetary value, can be traded widely

and works on the concept of digital signatures

advantage There are certain websites where the

consumer may not want to enter his credit card information.payment through digital cash would be a great alternative as

the consumers credit card details would not be exposed


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Electronic Fund Transfer (EFT)Wholesale EFT:

Useful when large sums of money need to be transferred

across borders between businesses.

International organizations like the New York Clearing HouseInterbank Payment System (CHIPS) take care of such

transactions. Two banks need to be registered with the

organization in order for such a payment.

Retail EFT: The electronic fund transfer mechanism for smaller amounts

from one account to another in the same bank. Invariably this

is done when the transferor and transferee accounts are in the

same bank


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In the case of transfer of funds from one bank to another, there

is the National Electronic Funds Transfer Scheme

Electronic funds transfer systems have the advantage of quick

credit of money. The system is also relatively secure as a

person needs his online banking id and password before such

an instruction is given.

The disadvantage however is that when applied in the

commercial environment, the seller and the buyer may not

have bank accounts in the same bank so as to afford instanttransfer of funds


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Online payment mechanism of amazon

Online payment on amazon through Flexible PaymentsService (FPS)

Every FPS transaction has a sender (party making payments), a

recipient (party receiving payments), and a caller (party makingthe API calls to Amazon FPS).

Payment Instructions include:

Transaction amounts: Set a transaction minimum,maximum, range, specific amount, or some combination of

these.Transaction Date: Configure a payment transaction to be

executed at a specific time (e.g. specific day, weekly,monthly, or date range).

Spending and usage limits: Control the maximum number,

maximum amount and frequency of payments


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Recipient list: Allow or exclude a specific set ofrecipients in a given transaction

Payment methods accepted: Credit cards, bankaccounts or Amazon Payments balance, in anycombination.

Fee preference: Specify which party pays theAmazon FPS transaction fees.

Amazon FPS provides Gatekeeper (GK) languagethat allows the parties to create PaymentInstructions.


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Once developers define these Payment Instructions, they use

anInstall Payment Instruction

API call to install these instructions and receive a token, a

unique, secure handle to the Payment Instructions. Amazon FPS makes it easy for callers to obtain Payment

Instructions from their users by providing a set of co-branded

user interface pipelines.

Callers send users to these user interface pipelines to showthem a proposed set of Payment Instructions .By agreeing to

those terms in the user interface, senders or recipients

authorize these Payment Instructions and allow the caller to

receive the corresponding token back.


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Thank youMade by

Alan wheeler 52Aman maksud 50

Documents

Online Payment Mechanism