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Chapter 1 Introduction Part

The document discusses the history and types of electronic payments. It describes how electronic payments have evolved from credit cards in the 1960s to modern systems like UPI, mobile wallets, and cryptocurrencies. The types of electronic payments covered are credit cards, debit cards, e-wallets, net banking, mobile payments, and decentralized/cryptocurrency payments.

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travon8877
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34 views

Chapter 1 Introduction Part

The document discusses the history and types of electronic payments. It describes how electronic payments have evolved from credit cards in the 1960s to modern systems like UPI, mobile wallets, and cryptocurrencies. The types of electronic payments covered are credit cards, debit cards, e-wallets, net banking, mobile payments, and decentralized/cryptocurrency payments.

Uploaded by

travon8877
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 1

1.1 INTRODUCTION
ELECTRONIC PAYMENT: CURRENT SCENARIO AND SCOPE OF
IMPROVEMENT

1.1.1 Definition ➖

E-payments are an electronic or digital way of transferring funds. Essentially, you


can utilize electronic payment methods to transfer funds as an alternative to cash
payments. In India, you can access various types of electronic payment methods
based on your requirements.

The various types of e-payment include credit and debit cards, mobile wallets,
UPI, internet and mobile banking, and many more. You simply require a bank
account and an internet-enabled device to leverage e-payment solutions and pay
for various products and services.

1.1.2 Meaning ➖

Electronic Payments entail the transfer of funds through electronic or digital


mediums. You can choose from different e-payment methods like mobile wallets,
bank cards, mobile banking, etc. E-payments are quick and efficient, and the fund
transfer typically takes place instantly. It is a secure mode of making payments.

1.1.3 Introduction to the industry ➖

when credit cards were introduced, and the 1990s, when the internet and
electronic banking became available. The first online payment system was created
in 1994 by First Virtual Holdings, and PayPal became a major online payment
system. Electronic payments (e-payments) have been around since the 1960s, in
the early 2000s. The introduction of smartphones in the late 2000s paved the way
for mobile payments, such as Apple Pay, Google Wallet, and Samsung Pay. These
systems use near-field communication (NFC) technology to securely communicate
payment information from the phone to the merchant's payment system.
On 11th April 2016 India launched their first electronic payment system, Unified
Payment Interface, commonly referred as UPI, is an instant payment system
developed by the National Payment Corporation on India (NPCI) in 2016. The
interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M)
transactions. It is used on mobile devices to instantly transfer funds between to
bank accounts. According to data from the NPCI, 12.20 billion UPI transactions
worth of Rs.18.41 lakh crore (equivalent to $ 222.17 billion) was processed in
January 2024, representing a 41.72% increase in transition value compare to
January 2023.

1.1.4 TYPES OF E-PAYMENT ➖


There are various types of digital payment system which are being used now-a-
days such as

1) Credit Card ➖ The most famous type of payment for e-commerce


transactions is through credit cards. It is simple to use; the customer needs
to simply enter their credit card number and date of expiry in the
appropriate area on the seller's web page. To improve the security system,
increased security measures, for example, the use of a card verification
number (CVN), have been introduced online.

2) Debit Card ➖ Debit cards are the second largest e-commerce payment
medium in India. Customers who need to spend online inside their
monetary limits prefer to pay with their Debit cards. With the debit card,
the customer can just compensation for purchased merchandise with the
money that is already there in his/her bank account as opposed to the
credit card where the sum that the buyer spends.

3) E-WALLET ➖ E-Wallet is a prepaid record that permits the customer to store


multiple credit cards, debit cards, and bank account numbers in a secure
environment. This eliminates the need to key in account information every
time while making payments. Once the customer has registered and
created.

4) Net Banking ➖ This is another well-known method of making e-commerce


payments. It is a simple method of paying for online purchases directly
from the customer's bank. It uses a comparable method to the debit card of
paying money that is already there in the customer's bank. Net banking
does not require the user to have a card for payment purposes yet the user
needs to register with his/her bank for the net banking office.

5) Mobile Payment ➖ One of the latest methods of making online payments


are through mobile phones. Instead of utilizing a credit card or money, all
the customer needs to do is send a payment request to his/her service
provider by means of a text message; the customer's mobile record or
credit card is charged for the purchase. To set up the mobile payment
system, the customer simply needs to download software from his/her
service provider's website and afterward interface with the credit card or
mobile charging information. Some applications are being used today for
mobile payment transaction such as Google pay, Phonepe, Paytm, Google
wallet, PayPal, rupay, Amazon pay and Bhim upi. These all applications used
the method of electronic payment for transferring amount from one bank
to another by using either UPI or Net banking method.

6) DE-CENTRALIZED PAYMENT ➖ Decentralized payment systems are a type of


electronic payment system. In a decentralized payment system, users,
customers, and vendors can exchange money without trusting a third party
to keep the network secure and operational. Instead, the network uses a
network of peers, or nodes, to communicate and cooperate to process,
validate, and settle transactions. This network could be based on a
blockchain, a distributed ledger, or a peer-to-peer protocol. Decentralized
payment is also known as future payment where banks are not involved
while exchanging the money. It’s also known as future payment system.
Some examples of cryptocurrency are Bitcoin (BTC), Ethereum (ETH) and
Solana (SOL). It is also known as DEFI, uses emerging technology to remove
third parties and centralized institutions from financial transactions. The
component of DEFI is cryptocurrency, blockchain technology, and software
which allow people to transact financially with each other.

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