Std 12 Computer Chapter 5 Introduction to Mcommerce (Part 3 Electronic Payment System) Payment in Ecommerce/Mcommerce Traditional vs. Electronic Payment System Credit Card Debit Card Smart Card Charge Card Net Banking Electronic Fund Transfer (EFT) E-Wallet RuPay

1. Presented by Nuzhat Ibrahim Memon 1
CHAPTER 5
INTRODUCTION TO
M-COMMERCE
PART – 3
Electronic Payment
System

2. Payment in E-Commerce/M-Commerce
Presented by Nuzhat Ibrahim Memon 2
Cash
Cheque
Credit Card
Traditional Payment
Method
Payment cards
Credit card
Debit card
Smart card
Charge card
Net Banking
Electronic Fund Transfer
(EFT)
E-wallet
RuPay
Electronic
Payment System

3. Payment Card
3
Most popular and widely accepted method of payment on Internet.
Issuing bank- Issuing banks issued the credit card to the customer.
 issues the credit card and guarantees the payment to the
merchant
 The issuing banks provide the credit card of the financial
institutions which are established and reputed in the
services of credit card business.
 Example of financial institutions are : MasterCard, Visa
 Depending upon the customer’s credit history and income
level, credit limits are provided and up to that limit the
customer can spend and pay to the issuing bank within the
billing period.
Acquiring bank – For accepting payments on websites through credit
card, merchant needs to open a merchant account with the banks,
 Acquiring bank provide the service of online authorization &
Payment process
 Authorization is the process of verifying whether the card is
active; the credit limits and verifying the other details like
billing information.
Credit card
Presented by Nuzhat Ibrahim Memon

4. Payment Card
4
Customer visits the merchant’s website and payment through credit
card is transmitted to the merchant electronically.
Four parties : Customer | Merchant | Issuing Bank | Acquiring bank
 Customer (with credit card)
 Merchant (accepting the credit card)
 Issuing Bank (issues the card and guarantee the payment
to merchant)
 Acquiring bank (financial institution that establishes the
account with the merchant validates the credit card
information of the customer and authorizes sale based on
the customer’s credit limit.)
Two more entities: payment gateways | Processor
 Payment gateways (services provided by the third parties
like PayPal to perform authorization and payment in
secured manner.)
 Processor (perform the transactions and settle funds to the
merchant. Processors are connected to the E-Commerce
website of the merchant through the payment gateway.)
Credit card
Presented by Nuzhat Ibrahim Memon

5. Payment Card | Credit Card
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For online transactions secure : Secure Electronic Transfer (SET)
Authorization Settlement
Online Payment’s two Parts

6. Payment Card
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Advantages
 Gives flexibility, Customer do not have to carry cash.
 Online and offline payment is possible.
 Keeps record through bank statement.
 Allows customers to purchase goods even when they do
not have the cash in bank account.
Limitations
 Unsuitable for very small and very large payments.
 Security issues.
 Customers tend to overspend using credit card.
 Problems arise in case lost or stolen cards.
Credit card
Presented by Nuzhat Ibrahim Memon

7. Payment Card
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 Looks like credit card but works differently.
 Transfers fund directly from the customer’s bank account
to the merchant.
 Amount is immediately deducted from the bank account
of the consumer.
 Keep consumer purchases under a limit.
 Do not allow him to exceed beyond his/her budget.
 The consumer should always be aware of his account
balance.
Debit card
Presented by Nuzhat Ibrahim Memon

8. Payment Card
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 Look just like credit cards but are different as they have
microchip embedded in their surface.
 It contains user’s private information, a/c information, health
insurance information, private keys etc.
 Store 100 times more information than the normal cards.
 Much safer than the credit or debit cards as Information
stored in encrypted form.
 Range of purposes like storing digital cash, storing a patient’s
medical records etc.
 Smart card readers are available for retail outlets.
 A smart card reader is required to read information
or add data to it. It is small device into which the smart
card is inserted.
Smart card
Presented by Nuzhat Ibrahim Memon

9. Charge Card
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 Customer can pay through the card to the vendor.
 Does not carry any spending limit.
 Customer has to pay the total amount used at the end of the
billing period.
 If the total amount is not paid back then the customer has to
pay a late fee
Presented by Nuzhat Ibrahim Memon

10. Net Banking
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 Popular option: Net Banking or Online Banking that does
not involve any type of card
 Used by customers who have bank accounts enable with
internet banking.
 Bank provides the net banking username and password.
 Possible online purchase and payment.
 After the transaction, transfer the amount from user’s
account to the merchant’s account.
 Safer than credit card.
 Indian railway provide the facility to book tickets online on
their website www.irctc.co.in
Presented by Nuzhat Ibrahim Memon

11. Electronic Fund Transfer (EFT)
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 Transferring money from one bank account to another
electronically is called Electronic Fund Transfer (EFT).
 Safe, secure, efficient, less expensive than paper check
payment and collection.
 Examples :
 Online bill payment
 Transactions amongst various banks around the world
 Payment of tuition fees using an ATM
 Deposit of employee’s salaries in their account
 Monthly bank account deductions
Presented by Nuzhat Ibrahim Memon

12. E-wallet
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 E-Wallet is an electronic card for making secure online
payments towards a merchant.
 Some merchants solve the problem to give the
information for every time of purchasing, they store
the information on their servers for later use.
 IRCTC has launched e-wallet scheme for the customers
to make online booking easier. The customers having an
account can deposit money in advance with IRCTC which
can be used in future as payment option to book the
tickets online.
Presented by Nuzhat Ibrahim Memon

13. RuPay
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 RuPay – Rupee and Payment.
 Launched by National Payment Corporation of India (NPCI)
 Currently, as there is no domestic card Indian banks have to tie
with MasterCard and Visa.
 Every transaction done using a credit or debit card issued
by a domestic bank is routed through their network
switches which are outside the country. These
transactions involve additional charges for providing the
services. The banks have to pay for processing all debit and
credit card payments.
 RuPay cards are the domestic alternative to the other
payment cards.
 RuPay cards, all the transactions will be processed within India.
 RuPay will benefit the customers and the banks by reducing the
cost.
Presented by Nuzhat Ibrahim Memon

14. THANK YOU!
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Phone:
+7 888 999-000-11
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