E-PAYMENT

. What is E-Payment?E-payment defined as electronic payment, is asubset of an e-commerce transaction. It includeselectronic payment for buying/selling goods orservices which are offered on the internet.Generally we think of electronic payments asonline transactions made over internet. Actually,there are many forms of electronic payments. Withthe development of the technology, the range ofdevices and processes to transact electronicallycontinues to increase while cash and checktransactions decreases. 3. E-payment systemGood or Service that Good or Service that is bought is soldBUYER SELLERBetween the buyer and seller there is always an epaymentsystem. In electronic environment, the buyer and seller do notsee each other. Between them, there is a secure paymentmethod made, which is called the e-payment system. 4. E-payment typesThere are several e-payment types. The e-payment types also depends on thecountry where you live in. Day by day world widely, the use of e-payment increases.There are still countries that epayment process is not in a range variety of use. Themost general ones of e-payment types are: E-Cash Micropayments E-Wallets Debit and Credit Cards Smart Card Peer to Peer Payments B2B and B2C Transactions 5. E-CashE-cash defined as electronic cash, is an internet based systemgenerated by a computer. It allows funds to be transferred anditems to be purchased by debit/credit card, check or moneyorder. Secure online transaction processing is provided.Its more efficient and has lower transaction costs. Anybody canuse it and does not require special authorization. You can makepayments less than a 1$, which costs cents, and thats calledmicropayment. 6. 2 BANK 4 1 5 Buyer Seller 31. Firstly the buyer buys e-cash from the bank2. The bank sends e-cash bits to buyer (after charging thatamount

plus fee)3. Buyer sends the e-cash to the seller4. Seller checks that e-cash with the bank if its valid5. The bank verifies that e-cash is valid6. Then the buyer and seller complete transaction. Oncegoods or services are delivered to buyer, seller takesdeposited e-cash. 7. MicropaymentsA micropayment is an e-commerce transaction involving a verysmall sum of money in exchange for something made availableonline, such as an application download, a service or Webbasedcontent. Micropayments are sometimes defined as anything lessthan 75 cents and can be as low as a fraction of a cent. A specialtype of system is required for such payments, which are toosmall to be feasible for processing through credit cardcompanies. 8. E-WalletE-wallet stands for electronic wallet, which keeps your electronicmoney exactly as same as your wallet in your pocket. It stores yourcredit card, electronic money, owner identification, address informationand provides it at e-commerce sites. An e-wallet provides security andencryption for personal information.You can make shopping easier and more efficiently with an e-wallet.You do not need each time to enter information into forms to purchase.Neteller is one of the biggest and first e-wallet. Click2Pay andMoneybookers are other big ones. And there are a lot more. Most ofthe services related to e-payment now provide ewallet. 9. Identity Card Credit and Debit Card Money e-WalletYour e-wallet is your wallet in the electronicenvironment. All your information is stored in. Thereare lots of organizations providing secured e-wallets. 10. Debit and Credit Cards A Debit Card is a plastic card that provides the cardholder electronic access to his/her bank account to withdraw cash or pay for goods and services. It removes the need to go to your bank to make payments. It transfers immediately money from the clients account to the business account. Its very convenient and secure. It also gives you the ability to take directly cash money from ATMs (Automatic or

Automated Teller Machine). A Credit Card is a card issued by a financial company giving the holder an option to borrow funds. Credit cards charge interest and are primarily used for short-term financing. Borrowing limits are pre-set according to the individuals credit rating. It provides the cardholder to make purchases up to the amount fixed by the card issuer. Its the most used form of payment system given its high convenience. 11. Payment acceptance and ProcessingMerchants has to set up merchant accounts in order to acceptpayments. The payment card transaction requires: Merchant to authenticate payment card Merchant must check with card issuer to ensure funds are available and to put hold on funds needed to make current charge. Settlement occurs in a few days when funds travel through banking system into merchants account. 12. 1 2 3 Merchant processes Electronically Customer pays by credit card using submitted to credit card software provided by principal bank PPI 4 5 6 Issuing bankPrincipal bank sends approves/declines Principal bank sends request to issuing sends transaction transaction back to bank back to the principal merchant. bank All Process takes 5-15 seconds 13. Difference between Debit and Credit CardDebit cards and credit cards are accepted at the same places.Debit cards all carry the symbol of one of the major types ofcredit cards on them, and can be used anywhere that creditcards are accepted. They both offer convenience. Thefundamental difference between a debit card and a credit cardaccount is where the card pulls the money. A debit card takes itfrom your banking account and a credit card charges it fromyour line of credit. Debit cards offer the convenience of a creditcard but works in a different way. With a debit card you canspend as much as you have in your account. But with a creditcard you can spend up to the limit your bank allows you. Youspend a borrowed money that you will pay in further with fees. 14. Smart CardsA smart card is a plastic card in the size of a credit card with anembedded microchip that can be loaded with data, used

fortelephone calling, electronic cash payments and otherapplications. It stores more information than a magnetic stripecard. It can be programmed for different applications and somecan be updated to add new applications after they are issued.Smart cards are designed to be inserted into a slot that can beread by a special reader or to be read at a distance. It containsuser information, such as account information, credit cardnumbers, health insurance etc Smart cards are disposable andreloadable. Another standard is called OpenCard. There are 2leading smart card operating systems: JavaCard and MULTOS(Multiple Operating System). 15. Peer to Peer PaymentsA peer-to-peer payment service allows the transfer ofelectronic cash (e-Cash) via e-mail between two peoplewho have accounts at e-Cash-enabled banks. These are servicessuch as PayPal, AlertPay, ePay etc Peer-to-peer transactionsallow online financial transfers between consumers. It allows auser to send money to anyone with an e-mail address,regardless of what bank either person uses. It also gives you theability to add your credit/debit card, your bank account toperform transactions through them. 16. B2B and B2C TransactionsThe fastest grossing sector of e-commerce payments is business-to-business(B2B) transactions. These payments are often much larger than business-to-customer (B2C) transactions and involve complex business accountingsystems. For example, Paymentech is one of the largest payment solutionsproviders for point-of-sale transactions on the Internet. The service providesreporting and processing tools and services to help manage amerchant account and electronic check processing. Paymentech supports alltypes of credit and debit cards and conducts all transactions in a secureenvironment. Merchants using Paymentech can customize their paymentprocessing.B2C market transactions are less complicated than B2B transactions. UsingElectronic Bill Presentment and Payment (EBPP) a company can display a billon multiple platforms online and offer actual payment processes. Paymentsare generally electronic transfers from consumer checking

accounts. This isconducted through the ACH (Automated Clearing House), the current methodfor processing electronic monetary transfers. 17. ConclusionE-payment is improving and developing very fast. The usage,comfort ability is being wider and wider day by day. In somecountries there is approximately no Merchant that doesntsupport credit or debit card payment and those Merchants thatdoes not support are starting to setup their e-payment system.Governments support e-payment system. Also governments aredeveloping their e-payment based system and setup e-paymentsystems where there is no support of e-payment. Gatheringpayments in an easier, more comfortable and convenient waycan be made by e-payment. e-Payment is usable in every placewhere a payment is to be made. The developing is taking placein every sector. 18. References http://www1.american.edu/initeb/sm4801a/epayment1.htm http://www.ecash.com/ http://www.scribd.com/doc/29030723/Types-of-EPayments http://searchsecurity.techtarget.com/definition/smart-card http://www.investopedia.com/terms/d/debitcard.asp#axzz27J TfBvz9 http://en.wikipedia.org The evolution of electronic payments Thesis by Benjamin Graham http://innovexpo.itee.uq.edu.au/2003/exhibits/s334853/thesi s.pdf