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Electronic Business
E-Payment:
E-Payment Electronic Payment System is a way of transferring money over Electronic Media.
Some Examples:
Some Examples Methods of traditional payment Check, credit card, or cash Methods of electronic payment Electronic cash, Scrips, software wallets, smart cards, and credit/debit cards Scrip is digital cash minted by third-party organizations
Electronic Transactions:
Electronic Transactions Internet Based EDI Based Mobile Based
Electronic Transactions:
Electronic Transactions Business-to-Business Business-to-Customer Customer-to-Customer or Peer-to-Peer
Types of E-payments:
Types of E-payments Credit Card Debit Card E-cash Electronic Money Stored-Value cards Electronic Check System Electronic Fund Transfer Accumulating Balance Intermediaries peer-to-peer Mobile Payment
Definitions:
Definitions Consumer = Browser connected to Internet Merchant = Web store front (e.g. Amazon.com). Provides catalog, shipping, shopping cart functionality Payment Gateway take credit information from consumer and implement financial transaction with Merchant and Issuer bank Merchant Bank Web store fronts bank Issuer Bank Issuer of consumers credit card
Debit Card:
Debit Card On spot payment Easy to obtain Eliminates the need to carry cash or check book Anonymity is there Advantage for the merchants
Electronic Cash:
Electronic Cash Primary advantage is with purchase of items less than $10 Credit card transaction fees make small purchases unprofitable Micro-payments Payments for items costing less than $1
E-cash Concept:
E-cash Concept Merchant Consumer Bank 1 2 3 4 5 1. Consumer buys e-cash from Bank 2. Bank sends e-cash bits to consumer (after charging that amount plus fee) 3. Consumer sends e-cash to merchant 4. Merchant checks with Bank that e-cash is valid (check for forgery or fraud) 5. Bank verifies that e-cash is valid 6. Parties complete transaction: e.g., merchant present e-cash to issuing back for deposit once goods or services are delivered
E-cash Systems:
E-cash Systems CyberCash CyberCoins Stored in CyberCash wallet, a software storage mechanism located on customers computer Used to make purchases between .25c and $10
E-cash Systems:
E-cash Systems Coin. Net Millicent Digicash Trailblazer in e-cash Allowed customers to purchase goods and services using anonymous electronic cash
Electronic Wallets:
Electronic Wallets Stores credit card, electronic cash, owner identification and address Makes shopping easier and more efficient Eliminates need to repeatedly enter identifying information into forms to purchase Works in many different stores to speed checkout Amazon.com one of the first online merchants to eliminate repeat form-filling for purchases
Slide 23:
An Electronic Checkout Counter Form
Electronic Wallets:
Electronic Wallets Agile Wallet E-Wallet Microsoft Wallet Comes pre-installed in Internet Explorer 4.0, but not in Netscape All information is encrypted and password protected Microsoft Wallet Merchant directory shows merchants setup to accept Microsoft Wallet
Slide 25:
Entering Information Into Microsoft Wallet
PayPal Structure:
PayPal Structure PayPal Private Bank X.COMs BANK INTERACTS WITH BANKING SYSTEM THROUGH ACH ONLY MAINTAINS LEDGERS NO MOVEMENT OF REAL MONEY WITHIN PAYPAL User Users Bank USER INTERACTS WITH PAYPAL THROUGH BROWSER BETWEEN TWO PAYPAL USERS, TRANSACTIONS ARE PURELY BOOK ENTRIES IF REAL MONEY MUST MOVE, PAYPAL SENDS INSTRUCTIONS TO ITS BANK USER MAINTAINS NORMAL RELATIONS WITH HIS BANK eBay PUBLIC COMPANY
PayPal:
PayPal Its a big disk drive! SHAMOS WEISS - $100 + $100
PayPal:
PayPal ACCOUNT HOLDER A ACCOUNT HOLDER AS BANK ACCOUNT HOLDER X PAYPAL ACCOUNT A . . . ACCOUNT X ACCOUNT HOLDER XS BANK ACH PROCESSOR ACCOUNT HOLDER AS CREDIT CARD INTERNET EMAIL PAYPALS BANK 1. A PAYS X VIA PAYPAL (A HAS ENOUGH IN PAYPAL ACCOUNT) 6. PAYPAL NOTIFIES X OF PAYMENT. X CHOOSES PAYMENT METHOD 2. OR: PAYPAL CHARGES XS CREDIT CARD 3. OR: PAYPAL INITIATES ACH DEBIT 4. FUNDS ARE DEPOSITED IN PAYPALS BANK 7. OR: PAYPAL INITIATES ACH CREDIT 5. PAYPAL CREDITS XS PAYPAL ACCOUNT 8. OR: PAYPAL MAILS CHECK TO X
Business-to-Business:
Business-to-Business Electronic Fund Transfer Electronic Checks Transfer Financial EDIs Purchase Cards