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Electronic

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14 views

Electronic

Uploaded by

kamaladevi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Electronic

Classification of EFT
segmented into three broad categories:
1. Banking and financial payments
2. Retailing payments
3. On-line electronic commerce payments
4. Token-based payment systems.
5. Credit card-based payments systems
• Banking and financial payments.
• Large-scale or wholesale payments (e.g., bank-to-bank
transfer)
• Small-scale or retail payments (e.g.automated teller
machines)
• Home banking (e.g., bill payment)
Retailing payments
• Credit Cards (e.g., VISA or MasterCard)
• Private label credit/debit cards (e.g., J.C. Penney Card)
• Charge Cards (e.g., American Express)
• On-line electronic commerce payments
A) Token-based payment systems
• Electronic cash (e.g., DigiCash)
• Electronic checks (e.g.. NetCheque)
• Smart cards or debit cards (e.g., Mondex Electronic
Currency CDigiCard
B) Credit card-based payments systems
• Encrypted Credit Cards (e.g., World Wide Web form-
based encNetCheque
• Third-party authorization numbers (e.g.. First Virtual)
• ON-LINE ELECTRONIC COMMERCE PAYMENTS
1. DIGITAL TOKEN-BASED PAYMENT SYSTEMS
2. CREDIT CARD-BASED PAYMENTS SYSTEMS
Conventional methods of banking or retailing payment
methods assumes that The parties will at some time or
other be in each other’s physical presence There will be
sufficient delay in the payment process for frauds.
Overdrafts and other undesirables to be identified and
corrected.
These assumptions do not hold for e-commerce applications.
So new forms of financial instruments are being developed.
• ON-LINE ELECTRONIC COMMERCE PAYMENTS
1. DIGITAL TOKEN-BASED PAYMENT SYSTEMS
a) Electronic Cash
b) Electronic Checks
c) Smart cards
2)CREDIT CARD-BASED PAYMENTS SYSTEMS
• DIGITAL TOKNAISED ELECTRONIC PAYMENT
SYSTEMS
• Electronic Tokens – Electronic Cash /Money
/Checks
• Electronic tokens are designed as electronic
analogs of various forms of Payment backed
by a bank or financial institution
TYPES OF ELECTRONIC TOKENS
• 1. Cash or Real-time
Transactions are settled with exchange of electronic currency.
Eg for on-line currency exchange is electrome cash (e-cash)
2. Debit or Prepaid
• Users pay in advance for the privilege of getting information.
Eg smart cards and electrome purses that store electronie
money
• 3. Credit or Postpaid
• The server authenticates the customers and verifies with the
bank. That funds are adequate before purchase. Eg
credit/debit cards and electronic checks
Electronic Tokens
The nature of the transaction for which the instrument is designed
Identify the parties involved, the average amounts and the purchase
2. Interaction
• The means of settlement used Tokens must be backed by cash/ credit/ electronic bill
payments/ cashier’s checks etc
• Each has its own speed, risk and cost
3. Approach to security, anonymity and authentication
• Electronic tokens vary in the protection of privacy and confidentiality of transactions
• Encryption can help with authentication, non-repudiation and asset Management
4. The question of risk
• Tokens may become worthless and currency that nobody will accept
• The customers might have Risk arises if transaction has long lag times between
product
Delivery and payment to merchants
Electronic cash
• E-cash focuses on replacing cash as the principal
payment vehicle in consumer-oriented electronic
payments
• Cash remained as systems due to:
The dominant form of payment even after 30 years of
electronic payment
• 1. Lack of trust in the banking system
• 2. Inefficient clearing and settlement of non-cash
transactions
• 3. Negative real interest rates paid on bank deposit
Definition
• Electronic cash (“ecash”) involves a system in which The
customer withdraws electronic tokens from a bank over the
Internet (in the same way as one draws physical cash from an
ATM) onto their personal computer’s hard disk.

• The coins may then sent over the Internet to other users who
may store them for later use or deposit them with a bank which
accepts that version of ecash.

• One of the most developed and tested of these systems is


DigiCash’
• Some qualities of credit and debit cards.
• They are restricted to one user-identification
cards owned by the user
• They are not legal tender-merchants have the
right to refuse to accept them
• They are not bearer instruments-usage
requires an account relationship and
authorization system
• Some qualities of cash that current credit/debit cards lack
• Cash is negotiable can be given/traded to someone Else
• Cash is a legal tender the payee is obligated to take it Cash
is a bearer instrumentits possession is a proof of
ownership
• Cash can be held and used by anyone even those who
don’t have a bank account
• Cash places no risk on the part of the acceptor that the
medium of exchange may not be good
• • So we need to develop e-cash that has some properties
of cash.

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