Delivery Channels and Inter Bank Payment System, E-Payments, Types of Electronic Fund Transfer system, Real Time Gross Settlement,National Electronics Funds Transfer ,Immediate Payment Service, Credit Card, Automatic Teller Machine, Smart Card, E-Money, E- Wallet, E-Cheque
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Electronic fund transfer system
1. Delivery Channels and Inter
Bank Payment System
Prepared by-
Dr Ramandeep
Assistant Professor
Deptt of Commerce
GCW, Sirsa (Haryana)
2. E-Payments-Meaning
E-Payments refers to paperless monetary
transactions. The important modes of E-
Payments are Debit Cards, Credit Cards, Smart
Cards, EFT, Internet Banking and e-commerce
payment system.
3. Methods of E-Payments
Methods of E-
Payments
Credit Payment
System
Debit Card
Credit Card
E-Wallet
Smart Card
Cash Payment
System
Direct Debit
E-Cheque
E-Cash
Store value
card
6. Phases in E-Payments
1. Registration
2. Invoicing
3. Payment Selection and Processing
4. Payment Authorization and Confirmation
7. E-Payments Benefits
• Speed and Convenience
• Increased sales
• Time saving
• Reduced costs
• Variety of payment options
• Highly effective Security
• Improved customer support
• User friendly
8. Electronic Fund Transfer–Meaning
• Electronic funds transfer (EFT) is the electronic
transfer of money from one bank account to another.
• It is done through computer-based systems, without the
direct intervention of bank staff.
• It allows customers to make money transfers at the
comfort of their homes using integrated banking tools
such as internet and mobile banking.
9. Electronic Fund Transfer System
The electronic payment system covers all
electronic credit and debit money transactions
including debit cars, ATM transactions, online
bill payment, wire transfers and automatic
deductions from the account of the customers
to make regular payments.
10. Types of Electronic Fund Transfer System
National Electronics Funds Transfer
(NEFT)
Real Time Gross Settlement
(RTGS)
Immediate Payment Service
(IMPS)
11. Types of EFT system (Continue……)
1. Real Time Gross Settlement (RTGS)
Real Time Gross Settlement as the name suggests is a real time
funds transfer system which facilitates you to transfer funds from
one bank to another in real time. The transaction isn’t put on a
waiting list and cleared out instantly.
RTGS payment gateway, maintained by the Reserve Bank of
India makes transactions between banks electronically.
The transferred amount is instantly deducted from the account of
one banks and credited to the other bank’s account.
12. Types of EFT system Continue…
2. National Electronics Funds Transfer (NEFT)
It is one of the most prominent electronic funds transfer system of
India started in November 2005.
NEFT is a facility provided to customers to enable them to transfer
funds easily and securely on a one-to-one basis. It is done via
electronic messages.
NEFT facilities are available in 30,000 bank branches all over the
country and work on a batch mode.
13. Types of EFT system Continue…
3. Immediate Payment Service (IMPS)
It is an instant real-time inter-bank electronic funds transfer system in
India. IMPS offers inter-bank electronic fund transfer service through
mobile phones.
Unlike NEFT and RTGS, the service is available 24X7 throughout the
year including bank holidays.
It is managed by the National Payments Corporation of India (NPCI).
IMPS was publicly launched on November 22, 2010.
14. Credit Card: Meaning
• Payment using credit card is one of most common mode of
electronic payment.
Credit card is a plastic card with a unique number attached with
an account. It has also a magnetic strip embedded in it which is
used to read credit card via card readers.
When a customer purchases a product via credit card, credit card
issuer bank pays the amount and customer has a certain time
period after which he/she can pay the credit card bill.
It is usually credit card monthly payment cycle.
15. Parties of Credit Card
1. The card holder – Customer.
2. The merchant - Seller who accept credit card payments.
3. The card issuer bank - Card holder's bank.
4. The acquirer bank - The merchant's bank.
5. The card brand - Visa or Mastercard
16. Parties of Credit card
Card, Telephone, Internet
Buyer
Seller’s Bank
Seller
Buyer’s Bank
Card
Association
17. Factors to be considered while Selecting Credit Card
• Credit limit
• Interest rate
• Reward on card
• Annual percentage rate
• Fees and penalty rate
• Free credit period
• Added services
18. Importance of Credit Card
• Availability of cheap and easy credit
• Risk element
• Helpful to small account business
• Enhanced sales
• Personal accident insurance
• Cash withdrawal facility
• Increased credit limit
• Add-on-cards
• Leveraged investment facility
20. Advantages of Credit Card
• Advantages to card holder
1. Cash substitute
2. Simple mode of payment
3. Taking credit anytime
4. Document of creditworthiness
5. Cash withdrawal
6. Single payment system
7. No confusion
8. Attractive rewards
9. Flexibility of payment
10. Enhances purchasing power
11. Insurance coverage
12. Helpline
21. Advantages of Credit Card
• Advantages to Merchant/Shopkeepers
1. Increased sales
2. Guaranteed Payments
3. Reduces the risk of holding cash
4. Validation of transactions
22. • Advantages to Bank
1. Attract customers
2. Source of revenue
3. Additional bank products
Advantages of Credit Card
23. Disadvantages of Credit Card
1. Risk of overspending
2. Financial indiscipline
3. High interest rate
4. Risk of fraud
24. Debit Card: Meaning
• A Debit Card is a plastic card that can be used instead
of cash when making purchases.
• Debit cards free customer to carry cash, cheques and
even merchants accepts debit card more readily.
• The amount is immediately transferred directly from
the cardholder's bank account when performing any
transaction.
25. Advantages of Debit Card
• Avoid fees and service charges
• Stay accountable for your spending
• Faster payments
• No interest charges.
• Security
• Bank and Merchant Rewards
• Easily accepted
27. Automatic Teller Machine (ATM)
ATM is an electronic device which is operated by
customer himself to make withdrawals, deposits
and other banking transactions.
All banks offer ATM facility to their customers.
ATM allows customers to complete basis
transactions without the help of branch
representative.
28. Advantages of ATM
• Round the clock service
• Convenience to customers
• Cost beneficial
• Reduces workload of the staff
• Error free service
• Beneficial for travelers
29. Benefits of ATMs to the Bank
• Reduced footfalls
• Reduced cost
• Anytime anywhere business
30. Disadvantages of ATMs
• ATM card cloning frauds
• Fake ATM
• Attack on ATMs
• OIN crack
• Out of service ATM
• Robbery in ATMs
31. Smart Cards
Smart card is a chip based card. In simple layman’s
words, a smart card is the card with which we can
exchange the data, store it and manipulate data.
It performs all functions of magnetic strip cards like
ATM Card, Debit and Credit Card etc.
32. Smart cards
Examples of Smart cards
• Used as payment cards like credit/ debit cards. These are issued by
commercial companies or banks.
• Hospitals use these cards to store patient details.
• EBT (Electronic benefits transfer) cards are used for the distribution
of government benefits.
• Smart cards are used by educational institutions, government
authorities etc for access control.
33. Features of Smart Card
• To store personal information
• Personal identification proof
• Financial transactions can be done
• Can be used at ATM to withdraw cash
• It is of two types-
• Contact less
• Contact card
• Can be used as digital cash
34. Advantages of Smart Card
• Safe and secure
• Convenient to carry
• Store personal information
• Performs payment of bills
• Inbuilt security
• Tamper resistant
• Capable of processing
35. Demerits of Smart Card
• Fear of loss
• Security risk
• Risk of theft of personal details
• Usage charges
36. E-Money
Electronic money refers to money that exists in banking
computer systems that may be used to facilitate electronic
transactions. Although its value is backed by fiat currency and
it can be exchanged into a physical form. E-money is primarily
used for electronic transactions.
E money is stored and transferred electronically through a variety
of means - a mobile phone, tablet, contactless card (or smart
cards).
37. E-MONEY
• Electronic money is currency that is stored in
banking computer systems.
• Various companies allow for transactions to be
made with electronic money, such as Square or
PayPal.
• The prevalence of electronic money has led to the
diminishing use of physical currency.
38. E-Purse (Digital Wallet)
E-wallet is an online prepaid account where
one can stock money, to be used when
required.
As it is a pre-loaded facility, consumers can
buy a range of products from airline tickets to
grocery without swiping a debit or credit card.
40. Benefits of E Wallet
1. Ease of use without having to enter your debit/credit
card details for every online transaction.
2. Instant cashless payment, no need to swipe a credit card
or debit card.
3. They also provide option for securely storing your Card
details,
4. There is no minimum amount and you can deposit an
amount as low as Rs 10.
41. Get reward and discount offers on every purchase
using wallet
Get extra cash backs for every amount spent using wallet.
The money will be refunded in case of failure.
You can transfer money to your friends and family as well.
There is no chance of a decline of payment.
No need to access your bank account for making e-payment.
Benefits of E Wallet
42. Disadvantages of E-Purse
Companies must ensure that their customers'
information is encrypted and well protected.
You cannot redeem your money back from the wallet
you need to make purchase to use this money.
If you lose your mobile your wallet is lost.
You can use wallet till your mobile battery lasts.
It may be possible that you will end up spending more
money using wallet.
43. E-Cheque (Digital Cheque)
An e-Cheque is an electronic document which
substitutes the paper check for online
transactions. Digital signatures (based on public
key cryptography) replace handwritten
signatures.
44. Benefits of E-Cheque to Customers
•No physical movement of cheques so no fear of loss of
cheque in transit.
•Quicker clearance; within 3-4 working days.
•Its more secured than physical cheques.
•Decrease errors and fraud.
•They can serve corporate markets. Firms can use them
in more cost-effective manner
45. Benefits of E Cheque to Banks
Reduce the risk associated with paper clearing
Superior verification and reconciliation process
No geographical restrictions
No physical movement of cheques- it saves cost
and time for banks.
No chance of cheque dishonor-
