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E-Payment Methods Group no. 4 Muhammad Irfan Shahid 12 Rooha Mukhtar 16 Course: Electronic-Commerce University of Education, Okara Campus

E Payment Methods

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An Introduction

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Page 1: E Payment Methods

E-Payment Methods

Group no. 4

Muhammad Irfan Shahid 12

Rooha Mukhtar 16

Course: Electronic-Commerce

University of Education, Okara Campus

Page 2: E Payment Methods

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

Page 3: E Payment Methods

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

Page 4: E Payment Methods

University of Education Okara Campus2001 4

Selection of Payment Method Based on:

Convenience Trace-ability Repudiation Financial risk Fraud protection

Page 5: E Payment Methods

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

Page 6: E Payment Methods

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

Page 7: E Payment Methods

Credit Card - Business ModelLogical Money Flow

University of Education Okara Campus

Customer

CustomerBank

Store

Visa(3rd Party)

1. Charge

2. Credit Authorization

3. Clearance/Settlement

4. Payment

Store’sBank 20

01

Page 8: E Payment Methods

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

Page 9: E Payment Methods

E-Cash Concept

1. Consumer buys e-cash from Bank2. Bank sends e-cash bits to consumer (after charging that amount plus fee)3. Consumer sends e-cash to merchant4. Merchant checks with Bank that e-cash is valid (check for forgery or fraud)5. Bank verifies that e-cash is valid6. Parties complete transaction: e.g., merchantpresent 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

Page 10: E Payment Methods

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

Page 11: E Payment Methods

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

Page 12: E Payment Methods

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

Page 13: E Payment Methods

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

Page 14: E Payment Methods

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

Page 15: E Payment Methods

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

Page 16: E Payment Methods

References• http://www.slideshare.net/Vishalchd11/the-e-payment-syste

ms• http://www.slideshare.net/birubiru/electronic-payment-syste

ms-7051324• 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