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ELECTRONIC PAYMENT SYSTEM

AMIT KUMAR NAYAK Roll no:29401 Regd no:1005105001

PRESENTATION FLOW
Introduction. Working principle. Conventional vs. Electronic payment system Requirements of Electronic payment system Types of Electronic payment system E-cash E-wallet E-check Smart cards Credit & debit cards Protocol Risk management option Conclusion . References.

INTRODUCTION
The term 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.

WORKING PRINCIPLE

CONVENTIONAL VS. ELECTRONIC PAYMENT SYSTEM


Conventional payment system Electronic Payment system
It requires a buyer's withdrawals form his/her bank account. A transfer of cash to the seller, and the Sellers deposit of payment to his/her account. Non-cash payment mechanisms are settled by adjusting is developed based on an electronic payment protocol which supports a series of payment transactions using electronic tokens or coins issued by a third party. Electronic cash would increase the vulnerability of the national financial system

REQUIERMENTS OF ELECTRONIC PAYMENT SYSTEM


Digital money Security Scalability Efficient and effective Simple and low cost Ease of Automated Processing Immediacy of result Globalization Non-repudiation

TYPES OF ELECTRONIC PAYMENT SYSTEM


E-CASH

E-cash E- wallets E-cheques Smart card Credit & Debit cards

CREDIT & DEBIT CARDS

E-WALLETS

SMART CARDS

E-CHEQUES

E-CASH
These are Digital forms of value storage and value exchange that have limited convertibility into other forms of value and require intermediaries to convert.
MERCHANT 5 4
5.

How E-Cash Works How E-cash works?


1. 2.

Consumer buys e-cash from Bank Bank sends e-cash bits to consumer (after charging that amount plus fee) Consumer sends e-cash to merchant

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Merchant checks with Bank that e-cash is valid


Bank verifies that e-cash is valid Parties complete transaction

BANK 2 1

6.

CONSUMER

E-WALLET
The E-wallet is another payment scheme that operates like a carrier of ecash and other information. likes credit card, owner identification ,address and etc..
Procedure
1. Decide on an online site where you would like to shop. Download a wallet from the merchants website. Fill out personal information such as your credit card number, name, address and phone number, and where merchandise should be shipped. When you are ready to buy, click on the wallet button, the buying process is fully executed.

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4.

E-CHECK
E Check is like writing a check, only faster and more secure. E-check is instruction to financial institution to pay a given amount of money to the payee. It is specially formatted email message sent over the internet.

State ment

SMART CARDS

A card, is embedded with integrated circuits


Which can receive input process and delivered as an output There are Two types Memory Micro-Processor Cards

CREDIT & DEBIT CARDS


Credit card
Used for the majority of Internet purchases Has a preset spending limit based on the users credit history. Most expensive e-payment mechanism MasterCard: $0.29 + 2% of transaction value Advantage Each month user can pay part or all of the amount owed Disadvantages Does not work for small amount (too expensive) Does not work for large amount (too expensive)

Debit card
Used for the majority of general purchases Has no spending limit Currently most convenient method Most non-expensive e-payment mechanism Special feature helps to withdraw from ATM as hard cash Advantages Operates like cash or a personal check Disadvantages Money is immediately deducted from users account balance

PROTOCOL
Secure Electronic Transaction (SET) Protocol
Jointly designed by MasterCard and Visa with backing of Microsoft, Netscape, IBM, GTE, SAIC, and others Designed to provide security for card payments.
SET specification Uses public key cryptography and digital certificates for validating both consumers and merchants Provides privacy, data integrity, user and merchant authentication, and consumer no repudiation

RISK MANAGEMENT OPTION


Use passwords which are at least of 8 characters, consisting alpha-numeric and one special character. Do not disclose passwords or PIN no. to anyone. No easy to guess passwords. Be smart and report immediately in case of loss of Card. Change the password immediately in case of shared. Have Reputed firewall and anti-virus at your home PC or Mobile (please purchase it.) Dont provide any personnel information via E-mails nor on phones because its illegal to ask for it in this method.

CONCLUSION
EPS is a process to protect multiple spending. Token forgery can be prevented . It requires digital signature for authorization

REFERENCE
1.http://www.scribd.com/doc/13419829/electronic payment system.pdf 2. http://seminar.basicknowledge.co.in/seminar-reports/e-

payment.html
3. http://pdf-ebooks.org/ebooks/online payments-pdf.pdf 4. http://www.encyclopedia.com/doc/1O11seminars.smart+cards.html

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