ELECTRONIC PAYMENT SYSTEM

MEANING

EPS (Electronic payment system) is an online business process used for fund transfer using electronic means, i.e

Personal computers services Mobile phones and hand held devices(PDA)They are widely used in bank whenever

transactions are made in terms of payment and other means.

DEFINITION

“Any transfer of funds initiated through an electronic terminal , telephonic instrument or computer or magnetic tape so as to order, instruct or authorize a financial institution to debit or credit an account.”

DIFFERENT VIEWS

Consumer point of view:-An EPS is a convenient way of making a purchase

or paying for a service without holding cash or having to got through in process of completing a cheque producing some form of acceptable identification.

supplier point of view:-E- payment represents an efficient means changing

funds and cash flows, offering improved security.In order for the supplier, to provide goods and

services to there modern EPS systems have be designed.

ELEMENTS OF ONLINE COMMERCE AND THEIR RELATIONSHIPS TO THE BANKING NETWORKS

The consumer & the associated browser to interact with the consumer.

An online shopping mall that may help direct consumers to the merchant servers.

The merchant system residing on an online web-server with a connection of web-browsers on the internet.

The background backing network to support online payments from consumers the merchant.

BROWSER WEB-SITES

BANKING SYSTEM

WEB-SITES

2.) LINK TO MERCHANT

1.) SELECT A STORE

CONSUMER 6.)CONFIRM PAYMENT

4.) select foods make payment

5.) obtain payment authorization

3.) present home page

BANKING SYSTEM IN ONLINE COMMERCE

TYPES OF E-PAYMENT SYSTEMS

Digital token based EPSE-tokens are equivalent to cash that is

backed by a bank.E-token are of three types-I. Cash to real timeII. Debit or prepaidIII. Postpaid or credit

BENEFITS OF E-CASH

The potential for fraud is reduced because in proper verification is done in case of e-business.

Merchant would prefer an e-cash scheme , since it prevents denial by the customer or lack of funds in a customer’s account.

It can protect the customer’s anonymity so that merchant is assured of the payment.

E-CASH WORKING ELECTRONIC MINT

CONSUMER’S BANK

2.)TRANSFER MONEY

MERCHANTBANK

CONSUMER MERCHANT

4.)SEND E-CASH

5.) DELIVERS GOODS

7.) CREDIT MERCHANT BANK

1.) REQUEST TO OBTAIN CASH

3.)SEND E-CASH

6.)RETURN E-CASH

2.) E- cheques

E-chequing pertains to the use of networking services to issue and process payments that emulate real world chequing.

BENEFITS OF E-CHEQUES E-checks works in the same way as the

traditional cheques, the simplifying customer education.

E-checks serve such corporate markets. They can use it to complete payment over the payments in a more cost effective than present alternatives.

3.) CREDIT CARDS

For the online transactions, the credit cards are the easiest method of others because people are already accustomed by using them remotely. The credit card transaction simply requires that the consumer have a valid credit card number & expiration date when placing an order. This information has been provided through standard internet options, like-email/sms.

WORKING OF E-CHEQUES

CONSUMER BROWSER

MERCHANT SYSTEM

1.) ACCESS & BROWSER

2.)SELECT GOODS PAY E-CHEQUE

4.) CLOSE TRANSACTION

CLEARING HOUSE

MERCHANT’ BANK

3.)VALIDATE CHEQUES

6.) FORWARD CHEQUE

5.) FORWARD TO BANK

CONSUMER’S BANK

7.) FORWARD CHEQUE

8.) ACCOUNT UPDATE

4.) SMART CARDS

Smart cards looks very much like a traditional credit card with one major transaction. Smart card combines with the characteristics of the credit or debit cards.They are being offered to consumer for small purchases less than $10 or more/less for. smart cards are also called stored value cards uses magnetic strip technology or intrgrated circuits(ICs) chip to store the consumer specific information including e-money.

BENEFITS:Smart cards offer clear benefits to both merchant &

consumer. They reduce cash hand expenses and losses caused by frauds.

5.)ELECTRONIC PURSE DIGITAL WALLET AND DEBIT CARDS

E-purse or d- purse is wallet size smart card embraced with programmable micro chip that store monitory value in form of money to be used with point of sale(POS) terminal.

BENEFITS:• After we get e-purse from the bank , we can use it for

different purpose depending upon the type of POS.• The corresponding POS scans the E-purse to

authenticate the e-purse & perform the operation accordingly.

• When the balance on the e-purse is shown the same machine, can be used to recharge the same card.

6.) ELECTRONIC BILL

E- bill is similar with general bill used to pay offline exchange with merchant. It consists of digital document(document file), which is signed by the consumer by using private key.

the merchant use the paper public key to decode the digital document if the result return the receiver identification that match with the sender’s identity, it means the digital documents are valid

Components of an effective electronic payment system

Consumer AND the browser Shopping mall Merchant system Banking network