Prepared By: Khurram

shafique Roll no 28

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Payment Systems for Electronic Commerce

Index

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Introduction to E-paymentModes of E-payment

Payment cards- Intro to credit card, debit card & charge card Acceptance and processing Advantages and Disadvantages

Electronic cash- Introduction and concern of cash Advantages Disadvantages

Click Free

Click Share

Electronic Wallet

Smart Card

Traditional Payment MethodsPayment: The transfer of money from one

individual or legal entity to another

Cash

Personal Cheques

Money orders (Bank note)

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Electronic Payment Systems

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E-payment or Electronic payment is any digital financial payment transaction involving currency transfer between two or more parties

Implementation of electronic payment systems is in its infancy and still evolving.

Electronic payments are far cheaper than the traditional method of mailing out paper invoices and then processing payments received.

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Payment Cards

Electronic Cash

Check free

Check share

Internet Cash

Wallet

Smart Card

Modes of E-Payment

Payment Cards

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Payment cards are all types of plastic cards that consumers use to make purchases:Credit cards

such as a Visa or a MasterCard, has a preset spending limit based on the user’s credit limit.

Debit cardsremoves the amount of the charge from the

cardholder’s account and transfers it to the seller’s bank.

Charge cards such as one from American Express, carries no

preset spending limit.

Payment Acceptance and Processing

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Open and closed loop systems will accept and process payment cards.

A merchant bank or acquiring bank is a bank that does business with merchants who want to accept payment cards.

Software packaged with your electronic commerce software can handle payment card processing automatically.

Payment Acceptance and Processing

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Advantages and Disadvantages of Payment Cards

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Advantages:• Payment cards provide fraud protection.• They have worldwide acceptance.• They are good for online transactions.

Disadvantages:• Payment card service companies charge

merchants per-transaction fees and monthly processing fees.

Electronic Cash

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Electronic cash is a general term that describes the attempts of several companies to create a value storage and exchange system that operates online in much the same way that government-issued currency operates in the physical world.

Concerns about electronic payment methods include:• Privacy• Security• Independence• Portability• Convenience

Holding Electronic Cash: Online and Offline Cash

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Two approaches to holding cash: online storage and offline storage.

Online cash storage means that an online bank is involved in all transfers of electronic cash.

Offline cash storage is the virtual equivalent of money you keep in your wallet. However, it must prevent double or fraudulent spending.

Advantages of Electronic Cash

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Electronic cash transactions are more efficient and less costly than other methods.

The distance that an electronic transaction must travel does not affect cost.

The fixed cost of hardware to handle electronic cash is nearly zero.

Electronic cash does not require that one party have any special authorization.

Disadvantages of Electronic Cash

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Electronic cash provides no audit trail.

Because true electronic cash is not traceable, money laundering is a problem.

Electronic cash is susceptible to forgery.

So far, electronic cash is a commercial flop.

Check Free

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Check Free provides online payment processing services to both large corporations and individual Internet users.

Check Free permits users to pay all their bills with online electronic checks.

Check Free provides part of the technology that the Web portal Yahoo! uses to provide its Yahoo! Bill Pay service.

Check Free

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Click share

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Click share is an electronic cash system aimed at magazine and newspaper publishers.

Users with an ISP that supports Click share are automatically registered with Click share.

Click share tracks users with the standard HTTP Web protocol.

Electronic Wallets

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An electronic wallet serves a function similar to a physical wallet:• holds credit cards, electronic cash, owner

identification, and owner contact information

• provides owner contact information at an electronic commerce site’s checkout counter

Some electronic wallets contain an address book.

Electronic Wallets

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Electronic wallets make shopping more efficient.

Electronic wallets fall into two categories based on where they are stored:• Server-side electronic wallet• Client-side electronic wallet

Electronic wallets store shipping and billing information, including a consumer’s first and last names, street address, city, state, country, and zip or postal code.

E.g. Microsoft .NET passport ,yahoo! Wallet

Mobile banking and EasypaisaIn 2008, Telenor acquired majority shares of

Tameer Microfinance Bank Limited for its mobile financial services project.They named the branchless banking service "Easypaisa" and launched it in October 2009.In a country of over 180 million, with only 10,000 bank branches and approximately 15 million bank accounts, easypaisa was Pakistan's first branchess banking deployment aimed to increase access to financial services for the people of Pakistan. With over 25,000 easypaisa shops across the country, Easypaisa was also quoted by CNN as the 'model to follow' in Mobile Banking at launch.

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Smart Card

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A smart card is a plastic card with an embedded microchip containing information about you.

A smart card can store about 100 times the amount of information that a magnetic strip plastic card can store.

A smart card contains private user information, such as financial facts, private encryption keys, account information, credit card numbers, health insurance information, etc.

E.g. Mondex smart card , Octopus smart card

Mondex Smart Card

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Setting up PayPal Account

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Open PayPal Account https://www.paypal.comClick on Sign upA new page will open on screen where you

select your country and then you have two options.

i- PayPal for your personal use. ii- PayPal for your business.

Now you will click on “Get started” either for personal use or for business use.

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A form will open where put information and then click on “Agree and Create Account”

After this, a new page will open where you will add payment method. Here you can add you Bank Account and Credit Card /Debit Card A/c and then click on Continue

Now your Bank A/C is your PayPal A/C. With the help of your PayPal account you can pay and receive money easily.

Now PayPal will give you some instructions and you will read and follow them carefully. Mostly these are for testing the function of your PayPal,

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Bank and Credit Card accounts. They want to check that either money can transfer from PayPal to your bank Account or not

Associate eBay Account with you PayPal Account:After this, you will login from your eBay account with your eBay-id and password. In the payment option, you have three methods of payments.  (1) PayPal Account

 (2) Credit Card detail and (3) Bank Account. You will put all the

demanded information in the fields.Now this is the stage where you can

start selling or buying on eBay.

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Thank you!!.

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