ELECTRONIC PAYMENT SYSTEM

PRESENTED BY:
108-DHRUVI MINOTRA 114-SHEETAL VERMA 121-AMIT KUMAR 131-MANU BOBAL 135-NITIN VERMA 141-DEEPIKA ARYA 145-SHILPI GOYAL

Electronic Payment

What Electronic Payment system is?

Electronic Payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an intermediary, or by a legal tender. Electronic payment system is a system which helps the customer or user to make online payment for their shopping.

Some Examples Of EPS:-

Online Reservation
Online Bill Payment Online Order Placing (Nirulas) Online Ticket Booking ( Movie)

OBJECTIVES
To understand the concept of Electronic Payment System and its security services.
To bring out solution in the form of applications to uproot Electronic Payment. To understand working of various Electronic Payment System based applications.

E-Money
Electronic Money (E-Money) is an electronic medium in which the users can simply transfer payments from their own bank accounts to the account of the merchant, electronically and securly over the internet.

Benefits of E-money
Companys expenses are reduced transferring digital money over internet is much cheaper. Easy transaction procedure. There is no need to fill out forms. Fast and instant transaction. Secured payments. Promotion of free banking and more personalized banking services.

Requirements For E-payments

The various factors that have lead the financial institutions to make use of electronic payments are: 1.Decreasing technology cost: The technology used in the networks is decreasing day by day. 2.Reduced operational and processing cost: Due to reduced technology cost the processing cost of various commerce activities becomes very less. A very simple reason to prove this is the fact that in electronic transactions we save both paper and time. 3.Increasing online commerce:

Two Storage Methods

On-line
Individual does not have possession personally of

electronic cash Trusted third party, e.g. online bank, holds customers cash accounts Off-line Customer holds cash on smart card or software wallet Fraud and double spending require tamper-proof encryption

E- CASH

E- WALLETS

SMART CARDS

CREDIT CARDS

E-Cash
A system that allows a person to pay for goods or services by transmitting a number from one computer to another. Like the serial numbers on real currency notes, the E-cash numbers are unique. This is issued by a bank and represents a specified sum of real money. It is anonymous and reusable.

Electronic Cash Security

Complex cryptographic algorithms prevent double spending Anonymity is preserved unless double spending is attempted
Serial numbers can allow tracing to prevent money laundering

E-Cash Processing
Merchant

5 4 Bank 3

Consumer

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 ecash is valid (check for forgery or fraud) 5) Bank verifies that e-cash is valid 6) Parties complete transaction

E-Wallet
The E-wallet is another payment scheme that operates like a carrier of e-cash and other information.

The aim is to give shoppers a single, simple, and secure way of carrying currency electronically.
Trust is the basis of the e-wallet as a form of electronic payment.

Procedure for using an e-wallet

1. Decide on an online site where you would like to shop. 2. Download a wallet from the merchants website. 3. Fill out personal information such as your credit card number, name, address and phone number, and where merchandise should be shipped. 4. When you are ready to buy, click on the wallet button, the buying process is fully executed.

Smart Cards
A smart card, is any pocket-sized card with embedded integrated circuits which can process data This implies that it can receive input which is processed and delivered as an output

Smart card Processing

Smart Card Applications

Ticketless travel Seoul bus system: 4M cards,1B transactions since 1996 Planned the SF Bay Area system Authentication, ID Medical records E-cash Store loyalty programs Personal profiles Government Licenses Mall parking ...

Credit cards
It is a Plastic Card having a Magnetic Number and

code on it. It has Some fixed amount to spend. Customer has to repay the spend amount after sometime.

Processing a Credit cards payment

Risk in using Credit cards

Operational Risk
Credit Risk Legal Risk

Stored-Value Cards
stored-value card A card that has monetary value loaded onto it and that is usually rechargeable Anyone can obtain a stored-value card without regard to prior financial standing or having an existing bank account as collaterral The stored-value card market is growing rapidly

B2B Electronic Payments

Current B2B Payment Practices

B2B payments are part of a much larger financial supply chain that includes: Procurement Contract administration Fulfillment Financing Insurance Credit ratings Shipment validation Order matching Payment authorization Remittance matching General ledger accounting

B2B Electronic Payments

More organizations have indicated a willingness to migrate from checks to electronic payments in the future because of: Current payment practices Electronic payments Role of EDI Integration of electronic payment and accounting systems Barriers to electronic payment Prospects for electronic payments

Secure Electronic Transaction (SET) Protocol

Jointly designed by MasterCard and Visa with backing of Microsoft, Netscape, IBM, GTE, SAIC, and others Designed to provide security for card payments as they travel on the Internet Contrasted with Secure Socket Layers (SSL) protocol, SET validates consumers and merchants in addition to providing secure transmission SET specification Uses public key cryptography and digital certificates for validating both consumers and merchants Provides privacy, data integrity, user and merchant authentication, and consumer nonrepudiation

The SET Protocol

Security Requirements of EPS

Integrity Authenticati on Nonrepudiation

Privacy Safety

INFRASTRUCTURES ISSUES
Limited bandwidth:- In most countries connections to the internet have limited bandwidth not suitable to download media rich in executable content. Language Representation Technical Issues; Presenting information using different languages presents some technical challenges and also require additional efforts in programming web and database server. Local Connection Costs: Local connection costs in many countries can be high, as the cost of a local call is proportionate to the duration of the cost so therefore information should be provided quickly.

Contd.
Digital security infrastructure: A fundamental requirement for the recognition of electronic documents is the ability to verify the identity of person online and to ensure that the sender of the message is he/she claims. The receiver must verify that a document has not been tampered during transmission or storage. Digital signature using a public key infrastructure is the most commonly used technique to ensure these requirements.

ELECTRONIC FUND TRANSFER

EFT (Electronic Fund Transfer) is the new facility provided to the Exporters for submitting the license fee through the Internet without visiting the Bank for the payment. This procedure is being proposed to facilitate payments through electronic means. The facility shall be available only for electronically filed applications

CONTD
The growing popularity of EFT for online bill payment is paving the way for a paperless universe where checks, stamps, envelopes, and paper bills are obsolete. The benefits of EFT include reduced administrative costs, increased efficiency, simplified bookkeeping, and greater security. However, the number of companies who send and receive bills through the Internet is still relatively small

What Is Payment Gateways??

A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online Shopping, etc. Payment gateway protects credit cards details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor.

How It works???....

Ever-increasing technology changes.

E-PAYMENT SYSTEM IN INDIA

Growing Internet access and mobile subscriber base Rising consumer confidence. Convenient delivery/payment models India has been one of the fastest growing country for payment cards in the Asia-Pacific region. India currently has approximately 130 million cards (both debit and credit) in circulation.

GROWTH IN e-PAYMENT SYSTEM

REGULATIONThe Reserve Bank of India (RBI) has been supportive in the development of electronic payments. In this direction, the Payments and Settlement System Act was enacted . Apart from being supporting, the RBI has also initiated various programs to encourage e-payments.

CHANNELS OF PAYMENTIndian banks have put in place various channels of electronic payments in place to encourage customers to adopt the electronic mode. Channels like the Internet, mobile, ATMs, and drop boxes are some of the most frequently used channels apart from bank branches.

MARKET MAPPING E-payments processing market has two major players, namely tech process , and Bill Desk, which is a pure play electronic transaction processing company .

ON GOING TRANSITION
FROM PAPER TO PLASTIC.

The Indian Payment System Is Transforming From Paper Mode To Electronic Mode.
Two main reasons for such shift are:1. The regulator has mandated routing all high-value transactions electronically to minimize movement of money and risk.

2. At the retail end, customers are realizing the efficiency of electronic payments.

SHIFTS IN THE PAYMENT SYSTEM

TECHNOLOGICAL ADVANCEMENT IN e-PAYMENT

Electronic Clearing Service (Credit and Debit).
National Electronic Fund Transfer (NEFT).
THE RULING PLASTIC MONEY

Credit cards Debit cards ATM Cards

CONCLUSION
Expand Market beyond Traditional geographic market. Override traditional marketing system into digital marketing system. Made human life convenient as a person can pay his payments online. Increasing the cardholder base will bring challenges to banks: Designing new products and services, managing default rates and loyalty programs,etc.