MBA

1. Electronic Payment System
BY: MUKESH LAL KARN
MBA 3RD SEMESTER
ROLL NO.-2
PUSOM

2. Electronic Commerce (E-Commerce)
COMMERCE REFERS TO ALL THE
ACTIVITIES THE PURCHASE AND SALES
OF GOODS OR SERVICES.
– MARKETING, SALES, PAYMENT,
FULFILLMENT, CUSTOMER SERVICE
ELECTRONIC COMMERCE IS DOING
COMMERCE WITH THE USE OF
COMPUTERS, NETWORKS AND
COMMERCE-ENABLED SOFTWARE
(MORE THAN JUST ONLINE SHOPPING)

3. 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.
 To transfer money over the Internet
 Examples- Online Reservation, Online Bill
Payment, Online Order Placing (Nirulas), Online
Ticket Booking ( Movie)

4. Use of electronic payments

5. Requirements for E-
payments
 Acceptability
 Anonymity
 Convertability
 Efficiency
 Integration
 Scalability
 Usability

6. Types of E-payments
Systems
 Digital Token based EPS
• Electronic Cash or E-cash
• Electronic Cheques or E-
cheques
• Smart card
 Retailing Payments
• Credit Card
• Debit Card

7. David Chaum
• Digital cash was invented by David Chaum in 1988.
• In 1990, he founded Digicash, a pioneering firm in the area, but
attracted only 160 US dollar in two years.
• Declared bankruptcy in 1998, and was bought by e-Cash
Technologies .
• Now e-Cash is having its own troubles and has been bought by
another company Called Info Space.

8. What is Digital Cash?
 Digital cash is a system of purchasing cash credits in
relatively small amounts, storing the credits in our
computer, and then spending them when making
electronic purchases over the Internet.
 A payment message bearing a digital signature which
functions as a medium of exchange or store of value.
 Need to be backed by a trusted third party, usually the
government and the banking industry.
 Examples- e-coins, E- wallet, Transfer money

9. Properties of a Digital Cash
System
 Monetary value
 Interoperability
 Retrievability
 Security

10. ADVANTAGES
OF
ELECTRONIC
CASH
Electronic cash transactions are more efficient
and less costly than other methods.
The distance that an electronic transaction must
travel does not affect cost.
The fixed cost of hardware to handle electronic
cash is nearly zero.
Electronic cash does not require that one party
have any special authorization.

11. DISADVANTAGES OF ELECTRONIC CASH
Electronic cash provides no
audit trail.
Because true electronic
cash is not traceable,
money laundering is a
problem.
Electronic cash is
susceptible to forgery.
So far, electronic cash is a
commercial flop.
Double spending or
deducting problem

12. Electronic Cheque(E-
cheque)
 An E-cheque is an electronic
version of paper cheque.
 Fast cheque processing and
very low transaction cost.
 Digital Signatures can be seen.
 Complex cryptographic
algorithms is used which
prevent from double
spending.
 It is for small transaction.
 We can open 99 accounts of
different banks.

13. Smart Card
 A smart card is a plastic card with an embedded microchip containing information
about you.
 A smart card can store about 100 times the amount of information that a
magnetic strip plastic card can store.
 A smart card contains private user information, such as financial facts, private
encryption keys, account information, credit card numbers, health insurance
information, etc.
 E.g. Mondex smart card , Octopus smart card

14. Credit Card
 Used for the majority of
Internet purchases
 Has a preset spending limit
 Currently most convenient
method
 Most expensive e-
payment mechanism
 MasterCard: $0.29 + 2% of
transaction value
 Disadvantages
• Does not work for small
amount (too expensive)

15. Debit Card
 A debit card is a plastic card which provides an alternative payment method to
cash when making purchases. Physically the card is an ISO 7810 card like a credit
card.
 Depending on the store or merchant, the customer may swipe or insert their card
into the terminal, or they may hand it to the merchant who will do so. The
transaction is authorized and processed and the customer verifies the transaction
either by entering a PIN or, occasionally, by signing a sales receipt.

16. Thank You!!