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    CH-6 E Marketing

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    abdelamuzemil8
    The document discusses various electronic payment systems used for e-commerce transactions. It describes electronic funds transfer, credit cards, debit cards, smart cards, and e-money as common payment methods. It provides details on how credit card transactions work by outlining the key steps and actors involved in a credit card payment process.

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    CH-6 E Marketing

    Uploaded by

    abdelamuzemil8
    21 views17 pages
    The document discusses various electronic payment systems used for e-commerce transactions. It describes electronic funds transfer, credit cards, debit cards, smart cards, and e-money as common payment methods. It provides details on how credit card transactions work by outlining the key steps and actors involved in a credit card payment process.

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    The document discusses various electronic payment systems used for e-commerce transactions. It describes electronic funds transfer, credit cards, debit cards, smart cards, and e-money as common payment methods. It provides details on how credit card transactions work by outlining the key steps and actors involved in a credit card payment process.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    21 views17 pages

    CH-6 E Marketing

    Uploaded by

    abdelamuzemil8
    The document discusses various electronic payment systems used for e-commerce transactions. It describes electronic funds transfer, credit cards, debit cards, smart cards, and e-money as common payment methods. It provides details on how credit card transactions work by outlining the key steps and actors involved in a credit card payment process.

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    You are on page 1of 17

    CHAPTER SIX

    E-COMMERCE PAYMENT SYSTEMS

    Contents
    6.1. Payment Systems
    6.2. Credit Card E-commerce Transactions
    6.3. E-commerce B2C Payment Systems
    6.4. E-commerce B2B Payment Systems
    6.1. Electronic Payment Systems (EPSs): An Overview

     6.1. Electronic Payment Systems (EPSs): An Overview


     In traditional brick-and-mortar establishments, a customer sees a
    product, examines it, and then pays for it by cash, check, or credit
    card. In the e-commerce world, in most cases the customer does
    not physically see the actual product at the time of transaction, and
    the method of payment is performed electronically. Therefore,
    issues of trust and acceptance play a more important role in the e-
    commerce world than in traditional businesses as far as payment
    systems are concerned.
     EPSs utilize integrated hardware and software systems that enable
    a customer to pay for the goods and services online. Although
    these systems are in their infancy, some significant progress has
    been made. The main objectives of EPS are to increase efficiency,
    improve security, and enhance customer convenience and ease of
    use.
    Conti….
     There are several methods and instruments that can be used to
    enable EPS implementation. As mentioned previously, in
    conventional businesses customers pay for goods and services
    by cash, check, or credit cards. Online shoppers may use one of
    the following EPSs to pay for goods and services purchased
    online:
     • Electronic funds transfer (EFT) involves electronic transfer of
    money by financial institutions.
     • Payment cards include stored financial value that can be
    transferred from the customer’s computer to the merchant’s
    computer.
     • Credit cards are used by charging against the customer credit
    and are by far the most popular method used in EPSs.
     • Electronic money (e-money or e-cash) is standard currency
    converted into an electronic format to pay for online purchases.
    Conti….
    • Electronic gifts are one way of sending electronic currency
    or gift certificates from one individual to another. The
    receiver can spend these gifts in their favourite online stores
    provided they accept this type of currency.
     • Online payment of monthly utility, Internet, or phone bills.
     • Smart cards include stored financial value and other
    important personal and financial information used for
    online payments.
     • Electronic wallets (e-wallets) are similar to smart cards in
    that they include stored financial value for online payments.
     • Micro payment systems are similar to e-wallets in that they
    include stored financial value for online payments; however,
    they are used for small payments, such as pennies and
    fractions of pennies.
    Electronic Funds Transfer

     Electronic funds transfer (EFT) is one of the oldest EPSs


    and is used for transferring money from one bank account
    directly to another without any paper money changing
    hands. EFT is the foundation of the cashless and checkless
    society where checks, stamps, envelopes, and paper bills
    are eliminated. The most popular application of EFT is the
    direct deposit option used by millions of workers in the
    United States. (Please note different names may be used
    outside of the United Sates.) Instead of receiving a pay
    check and depositing it into an account, the money is
    deposited to an account electronically. The Federal
    Reserve’s Fedwire and New York Clearing House
    Interbank Payment Systems (CHIPS) are two major users
    of EFT systems.
    Conti…
     Customers, companies, and government agencies use EFT for all
    kinds of applications. EFT is considered to be a safe, reliable, and
    convenient way to conduct business. Direct deposit is used for
    payroll, travel, and expense reimbursements, annuities and
    pensions, dividends, and government payments such as Social
    Security and veterans benefits. Other types of EFT are frequently
    used for bill payments, retail purchases, Internet purchases,
    corporate payments, and treasury management, and for the
    disbursement of food stamps and other government cash assistance.
    In broad terms EFT refers to any transfer of funds initiated through
    an electronic terminal, including credit card, ATM, Fedwire, and
    point-of-sale (POS) transactions. It is used for both credit transfers,
    such as payroll payments, and for debit transfers, such as mortgage
    payments. Many utility companies and sport clubs also use EFT.
    The advantages of EFT include the following:
     • Reduced administrative costs
     • Increased efficiency
     • Simplified bookkeeping
    6.2. Credit Card E-commerce Transactions
    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. Some of the modes of electronic payments are following.
     Credit Card
     Debit Card
     Smart Card
     E-Money
     Electronic Fund Transfer EFT
     B2C and B2B are two forms of commercial transactions. B2C, which stands
    for business-to-consumer, is a process for selling products directly to
    consumers. B2B, which stands for business-to-business, is a process for
    selling products or services to other businesses. The business systems that
    support B2B or B2C communications, transactions and sales administration
    differ in complexity, scope, scale and cost, so it is important that you
    Credit Card
     Credit Card

     Payment using credit card is one of most common mode of electronic


    payment. Credit card is small 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 on
    behalf of the customer 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. Following are the actors in the credit card
    system.
     The card holder - Customer
     The merchant - seller of product who can accept credit card
    payments.
     The card issuer bank - card holder's bank
     The acquirer bank - the merchant's bank
     The card brand - for example , visa or mastercard.
     Credit card payment process
    Step Description
     Step 1 => Bank issues and activates a credit card to customer on
    his/her request.
     Step 2 => Customer presents credit card information to merchant site
    or to merchant from whom he/she want to purchase a product/service.
     Step 3 => Merchant validates customer's identity by asking for
    approval from card brand company.
     Step 4 => Card brand company authenticates the credit card and paid
    the transaction by credit. Merchant keeps the sales slip.
     Step 5 => Merchant submits the sales slip to acquirer banks and gets
    the service chargers paid to him/her.
     Step 6 => Acquirer bank requests the card brand company to clear the
    credit amount and gets the payment.
     Step 7=> Now card brand company asks to clear amount from the
    issuer bank and amount gets transferred to card brand company.
    Debit Card
    Debit Card
     Debit card, like credit card is a small plastic card with a unique
    number mapped with the bank account number. It is required to
    have a bank account before getting a debit card from the bank.
     The major difference between debit card and credit card is that
    in case of payment through debit
     card, amount gets deducted from card's bank account
    immediately and there should be sufficient balance in bank
    account for the transaction to get completed. Whereas in case of
    credit card there is no such compulsion.
     Debit cards free customer to carry cash, cheques and even
    merchants accepts debit card more readily. Having restriction on
    amount being in bank account also helps customer to keep a
    check on his/her spending.
    Smart Card

     Smart Card
     Smart card is again similar to credit card and debit
    card in apperance but it has a small microprocessor
    chip embedded in it. It has the capacity to store
    customer work related/personal information. Smart
    card is also used to store money, which is reduced
    as per usage. Smart card can be accessed only
    using a PIN of customer. Smart cards are secure as
    they stores information in encrypted format and are
    less expensive/provides faster processing. Mondex
    and Visa Cash cards are examples of smart cards.
    E-Money
     E-Money
     E-Money transactions refers to situation where payment is
    done over the network and amount gets transferred from one
    financial body to another financial body without any
    involvement of a middleman. E-money transactions are faster,
    convenient and saves a lot of time. Online payments done via
    credit card, debit card or smart card are examples of e-money
    transactions. Another popular example is e-cash. In case of e-
    cash, both customer and merchant both have to sign up with
    the bank or company issuing e-cash.
     Electronic Fund Transfer
     It is a very popular electronic payment method to transfer
    money from one bank account to another bank account.
    Accounts can be in same bank or different bank. Fund transfer
    can be done using ATM Automated Teller Machine or using
    Conti…….
     Now a day, internet based EFT is getting popularity. In this
    case, customer uses website provided by the bank. Customer
    logins to the bank's website and registers another bank account.
    He/she then places a request to transfer certain amount to that
    account. Customer's bank transfers amount to other account if it
    is in same bank otherwise transfer request is forwarded to ACH
    Automated Clearing House to transfer amount to other account
    and amount is deducted from customer's account. Once amount
    is transferred to other account, customer is notified of the fund
    transfer by the bank.
    6.3. E-commerce B2C Payment Systems
    In B2C, consumers who buy products from you pay the same price as other
    consumers. In B2B, price may vary by customer. Customers who agree to place
    large orders or negotiate special terms pay different prices to other customers.
    Payment mechanisms also differ. In B2C transactions, consumers select
    products and pay for them at the point of sales using payment mechanisms
    such as credit or debit cards, checks or cash. B2B transactions require a more
    complex business system. Customers select products, place an order and
    arrange delivery through an agreed logistics channel. Customers do not pay at
    the time of the order, but receive an invoice which they settle within agreed
    payment terms.
     B2C e-commerce is a process for selling products directly to consumers
    from a website. Consumers browse product information pages on your
    website, select products and pay for them before delivery at a checkout,
    using a credit or debit card, or other electronic payment mechanism.
    Consumers enter their address details and select one of the delivery options
    you offer. The basic B2C business system is relatively simple. You need a
    method of displaying products and prices on your website, a mechanism for
    recording customer details, and a checkout to accept payment.
    6.4. E-commerce B2B Payment Systems
     6.4. E-commerce B2B Payment Systems
     You can use a similar website-based business system if you sell low-value
    products to business customers and you take payment with orders.
    However, B2B transactions normally require a more complex business
    system. The system must be capable of accepting orders in different
    formats such as email, documents or electronic orders. It must integrate
    order capture with your other administrative systems such as invoicing,
    customer records and accounting.
     At a more advanced level, you can offer groups of products customized
    to different customers. The business system selects the appropriate
    products to display when a customer logs in. This streamlines the
    process for business customers, as they do not have to browse a complete
    catalogue to find the products they want to buy from you .
    GROUP ASSIGNMENT
    Q1.case study:-Consider to select one
    business organization delever product or
    service and To accommodate by using
    internet marketing technology;How can to
    achieve vission,mission and core value
    about the organization?
    Q2.Imagine,to discuss in group explian
    importance about E-marketing?
    Q3.List and explian different Electronic
    Payment Systems (EPSs)?
    COVER END
    OF CHAPTER
    END OF CHAPTER

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