Electronic Payment Systems: Bachu Vinay Chaithanya (1421408)

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ELECTRONIC PAYMENT SYSTEMS

BACHU VINAY CHAITHANYA (1421408)


ELECTRONIC PAYMENT SYSTEMS
E-Commerce or Electronics Commerce sites use electronic payment where electronic payment refers
to paperless monetary transactions.
Electronic payment has revolutionized the business processing by reducing paper work, transaction
costs, labour cost.
Being user friendly and less time consuming than manual processing, helps business organization to
expand its market reach / expansion.
Credit Card
Debit Card
Smart Card
E-Money
Electronic Fund Transfer (EFT)
E- Wallet
Types of EPS
E Cash / E Money:

A system that allows a person to pay for goods or services by transmitting a number from one computer to another.

Like the serial numbers on real currency notes, the E-cash numbers are unique.

This is issued by a bank and represents a specified sum of real money.

It is anonymous and reusable.

E-Wallet:

The E-wallet is another payment scheme that operates like a carrier of e-cash and other information.

The aim is to give shoppers a single, simple, and secure way of carrying currency electronically.

Trust is the basis of the e-wallet as a form of electronic payment.


Types of EPS
Smart Card:

A smart card, is any pocket-sized card with embedded integrated circuits which can process data.

This implies that it can receive input which is processed and delivered as an output.

Credit Card :

 It is a Plastic Card having a Magnetic Number and code on it.

 It has Some fixed amount to spend.

 Customer has to repay the spend amount after sometime.

Debit Card :

 Similar to Credit card on coding and encryption.

 Purchase limit depends on the available balance in the account.


Types of EPS (Electronic Payment Systems) - Interfaces

No Security Model

Examples : Bill payments, Mobile Recharges on calling to customer care.


Third Party Processor
Processing payments using encrypted credit cards

Send encrypted credit


card number
Merchant's
Customer server
Send information

Monthly Check for credit card


purchase authenticity and sufficient OK
statement funds

verify
Online credit
Customer’s card
bank authorize processors
Encryption & credit cards

Sequence of steps for secure transaction

1. Customer presents card to the merchant


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 info to customer’s bank for authorization approval
5. Customer’s bank returns authentication & authorization to the
merchant
Secure Electronic Transaction (SET) Protocol
Widely Applicable E Payment System

Blowfish provides a good encryption rate in


software and no effective cryptanalysis of it has
been found to date.

However, the Advanced Encryption


Standard (AES) now receives more attention.
Pros and cons
Pros
 It’s easier for customers to buy your products or services.
 You can add custom loyalty programs, gift cards and customized e-commerce websites.
 You can integrate it with accounting software, making it easier to manage money.
 You don’t have to waste as much time depositing paper checks and cash at the bank.

Cons
 You have to pay a processing fee to accept plastic and some other electronic payments.
 If you use a traditional physical credit card terminal, monthly or annual fees might apply.
 Some payment processing services lock you into contracts that are costly to terminate early.
 To accept credit cards you usually need a merchant account, which is a bank account where payments
are deposited. Many electronic payment systems include one as a built-in feature. Note that you don’t
need a merchant account if you use a third-party processor such as PayPal.

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