Brief description about the various E-Payment Systems : E-Cash, E-Cheques,E-Wallets, Credit and Debit Cards transaction systems, Electronic Clearing Systems... Their various drawbacks and advantages and disadvantages.

1. Electronic Payment System

2. ~Objectives~
About E-Payment Systems
Advantages
E-Cash
E-Cheque Payment System
E-Wallet
Modes of E-Payment System
Credit Card Payment System
Debit Card Payment System
Electronic Clearing System

3. E-Payment Systems
Financial Exchange that takes
place between buyers and sellers
in the form of some digital
financial instrument that is backed
by a bank oran intermediary orby
a legal tender.
Factors To Use
This System:
 Decreasing
Technology Cost
 Reduced Operational
& Processing Cost
 Increasing Online
Commerce

4. Problems with
Traditional Payment
Systems
Advantages Of E-
Payment Systems
» Lackofconvenience
» Lackofsecurity
» Lackofcoverage
» LackofEligibility
» LackofSupportformicro-
transactions
» Increased Sales
» Decreased Costs

5. Conceptual View
 Issuers
 Customers
 Merchants or Traders
 Regulators
E-Cash
Founded in 1995, e-Cash is a
computer generated internet
based system which allows
funds to be transferred and
items to be purchased by
online payment.
Transaction Stages
 Account Setup
 Purchase
 Authentication

6. E-Cash Payment System Model

7. The E-Cheque System
A form of payment made via the internet that is
designed to perform the same function as a conventional
paper cheque .
Because the cheque is in electronic format , it can be
processed in a fewer steps and has more security
features like:
i. Authentication
ii. Public-Key Cryptography
iii. Digital Signatures
iv. Encryption etc.
than a conventional paper cheque.

8. Benefits :
No physical movement of
cheques , hence no loss of
cheque.
Quicker clearance.
Decreased errors and
frauds.
Serve corporate markets –
Firms can use them in more
cost effective manner.
Reduce processing costs up
to 60%.
Drawbacks :
• The problems come when
your merchants does not
accept e-cheques.
• When there can be more
than 1 signer or endorser.

9. E-CHEQUE PAYMENT SYSTEM

10. E-WALLET
Any device or
software that
allows the user to
store money ,
personal
information & other
data associated for
an online
transaction.
Features
 All ID information in 1 location.
 Current balance can be stored and read.
 Universal access.
 Cannot be duplicated.
 Firewall encrypted security logic.
 No separate card reader is required to access
e-Wallet.

11. ModesofE-PaymentSystems
Modes of
E-Payment
Systems
ECS
Debit
Cards
Credit
Cards

12. Credit Cards
Essentially a credit card
allows you to:
Purchase products or services whenever or
wherever you want , without cash , and paying
them at a later date.
Have an option of paying only a part of total
expenses. The balance amount can be carried
forward , with an interest charged.
Enjoying a credit limit without any charges for a
limited period (mostly 20 to 50 days).
A credit card is a
small plastic card
issued to users as
a system of
payment.
It allows its
holders to buy
goods & services
based on the
holder’s promise
to pay for these
goods & services.

14. Sequence of steps for secure
transaction :
1. Customer presents card to the merchants.
2. Merchant validates customer’s identity as the owner
of the card.
3. Merchant relays credit card charge & signature to its
bank.
4. Bank relays this information to customer’s bank for
authorization approval.
5. Customer’s bank returns authentication &
authorization to the merchant.

15. Debit Cards
Debit cards are plastic cards, which look like credit cards
but are electronically connected to a card holder’s
depository institution account. Money is automatically
withdrawn from the designated account when a purchase is
made . Debit cards can be used when there is not enough
money in the account , which will result in a non- sufficient
fund fee.

16. Electronic Clearing Systems
 Refers to the Electronic Fund Transfer mode
from 1 bank account to another to using the
services of a clearing house.
 Used for bulk transfers –
i) Making payments like: distribution of
dividend, interest, salary, pension
ii) Payments to Utility Companies :
telephone, electricity, loan instalments
etc.