E-Payment systems Unit : V

Pranjal Sharma

Content


Smart Card
Types of Smart Card Application of Smart Card Steps involved in accepting Smart Card Advantages & Disadvantages

Credit Card
Types of credit Card Payments Advantages Credit Card Frauds

Smart Cards

Smart Card


 

 

A Smart Card is a plastic card the size of a credit card with an integrated circuit built into it. It functions on at least three levels (credit debit - personal information). Smart cards include a microchip as the central processing unit, random access memory (RAM) and data storage of around 10MB. Smart cards are secure, compact and intelligent data carriers. Smart cards can store and process information and are fully interactive or an electronic recording device.

Types of Smart Cards

 

  

Contact Cards Contactless Cards Combi Cards Hybrid Cards Proximity Cards

Contact Cards
Cards the size of a conventional credit or debit card with a single embedded integrated circuit chip that contains just memory or memory plus a microprocessor. Popular Uses: Network security, vending, meal plans, loyalty, electronic cash, government IDs, campus IDs, ecommerce, health cards

Contactless Cards


Cards containing an embedded antenna instead of contact pads attached to the chip for reading and writing information contained in the chip's memory. Popular Uses: Student identification, electronic passport, vending, parking, tolls, IDs

Combi Cards
Cards containing one smart chip that can be accessed through either contact pads or an embedded antenna. Popular Uses: Mass transit and access control combined with other applications such as network security, vending, meal plans, loyalty

Hybrid cards
Cards containing two or more embedded chip technologies such as a prox chip with its antenna and a contact smart chip with its contact pads. Popular Uses: Accommodates legacy system infrastructure while adding applications that require different e-card technologies

Proximity Cards


"Prox cards" communicate through an antenna similar to contactless smart cards except that they are read-only. Popular Uses: Security, identification, access control

The most common Smart Card Applications

     

  

Health care (Medical) Credit cards Electronic cash Computer security systems Wireless communication Loyalty systems (like frequent flyer points) Banking Satellite TV Government identification

Steps involved in accepting Smart Cards

Benefits of Smart Cards

 

Smart cards can be used for identification, authentication, and data storage. Smart cards provide a means of effecting business transactions in a flexible, secure, standard way with minimal human intervention. Smart card can provide strong authentication for single sign-on or enterprise single sign-on to computers, laptops, data with encryption, enterprise resource planning platforms such as SAP, etc.

Advantages
1. 2.

3. 4. 5. 6.

Atomic, debt-free transactions Feasible for very small transactions (information commerce) Durability and long expected life span Security of physical storage (Potentially) currency-neutral Support multiple applications and secure independent data storage in one single card.

Disadvantages
1.

2.

3.

4. 5.

Low maximum transaction limit (not suitable for B2B or most B2C) High Infrastructure costs (not suitable for C2C) Single physical point of failure (the card) Not (yet) widely used Relatively higher cost of smart cards as compared to magnetic strip cards.

Credit Card

Credit Cards


A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. Credit cards are the currency of the internet.

Types of Credit Card Payments

1.

Payments using plain credit card details

The easiest method of credit network such as

telephone lines or the internet. The low level of security inherent in the design of the internet makes this method problematic. Authentication is also a significant problem, and the vendor is usually responsible to ensure that the person using the credit card is its owner.

2. Payment using

encrypted credit card details

It would make sense to encrypt the credit card details before sending them out, but even then there are certain factors to consider. One would be the cost of a credit card transaction itself. Such cost would prohibit low value payments by adding costs to the transactions.

3. Payment using third party verification

One solution to security and verification problems is the introduction of a third party a company that collects and approves payments from one client to another.

Advantages of Credit Cards

          

A universal medium Currency exchange Improved cash flow Reduce expenses Credibility Working capital Profitability Customer convenience Impulse buying Win competition Security

        

Avoid time delay Instant approval Increased sales Make money with convenience Instant gratification Level playing field Increases market size Customer loyalty Enhanced advertising

Credit Card Fraud



Merchant Fraud
merchant originated fraud ranges from honest merchants with a dishonest member of staff, to a dishonest or fake merchant that is operating in collision with fraudsters.

Cardholder Fraud
This category refers to instances where the fraud is being generated by the named cardholder, rather than by someone pretending to be the cardholder.

Third Party/ Cross Border Fraud

Stolen Cards
In case of stolen cards, the fraudster will usually move quickly to make as many purchases as possible within the window of time until the card is reported stolen and blocked by issuing bank.

Skimming
Skimming is the copying of the information from the magnetic strip of a card in order to create a counterfeit copy of card.

Counterfeit credit card

To make fake cards criminals use the newest technology to skim information contained on magnetic stripes of cards and to pass security features such as holograms.

Identity theft
Application fraud Application fraud happens when a criminal uses stolen or fake documents to open an account in someone else's name. Account takeover Account takeover happens when a criminal tries to take over another person's account, first by gathering information about the intended victim, then contacting their card issuer masquerading as the genuine cardholder, and asking for mail to be redirected to a new address.