3. INTRODUCTION
E-PAYMENT or electronic payment is any digital
financial payment transaction involving currency
transfers between two or more parties.
It is a system of financial exchange between buyers
and sellers in the online environment that is
facilitated by a digital financial instrument ( such as
encrypted credit card numbers, electronic checks or
digital cash) backed by a bank, an intermediary, or
by legal tender.
4. Electronic payments can
benefit our business by:
• extending customer base;
• boosting cash flow;
• reducing costs;
• enhancing customer
service
• improving your competitive
advantage.
ELECTRONIC PAYMENT BENEFITS
5. IMPROVE CUSTOMER SERVICE
Choice – like our competitors, we can offer a wide range of payment
options
Convenience – they remove the need for invoices, cheques & cash
Credit – they may allow purchases that would otherwise be delayed
Concessions – small discounts to encourage online purchases improve the
perception of value
Competitive Edge - if we don’t offer the full range of payment options but
your competitors do, what does this say about your business?
6. INCREASE PROFITABILITY
Convenience – removing administrative resources required by invoices,
cheques and cash
Immediacy – credit cards enable instant purchasing (without delay)
Improved cash flow – payment at the time of purchase reduces the
pressures caused by 30-day invoicing
Growth – open additional payment channels via the phone, mail order and
Internet and increase your customer base. More customers mean more
revenue.
Competitive advantage – match and beat the services of your competitors
and gain the edge
7. TYPES OF TRANSACTIONS
1. A one-time customer-to-vendor payment is commonly used
when you shop online at an e-commmerce site, such
as Amazon. You click on the shopping cart icon, type in your
credit card information and click on the checkout button. The
site processes your credit card information and sends you an
e-mail notifiying you that your payment was received. On
some Web sites, you can use an e-check instead of a credit
card. To pay by e-check, you type in your account number and
your bank's routing number. The vendor authorizes payment
through the customer's bank, which then either initiates
an electronic funds transfer (EFT) or prints a check and
mails it to the vendor.
8. 2. You make a recurring customer-to-vendor payment when
you pay a bill through a regularly scheduled direct debit from
your checking account or an automatic charge to your credit
card. This type of payment plan is commonly offered by car
insurance companies, phone companies and loan
management companies. Some long-term contracts (like
those at gyms or fitness centers) require this type of
automated payment schedule.
3. To use automatic bank -to-vendor payment, your bank must
offer a service called online bill pay. You log on to your
bank's Web site, enter the vendor's information and authorize
your bank to electronically transfer money from your account
to pay your bill. In most cases, you can choose whether to do
this manually for each billing cycle or have your bills
automatically paid on the same day each month.
10. PAYMENT CARDS
• Payment cards are all types of plastic cards that consumers
use to make purchases:
• Credit ( such as a Visa or a MasterCard, has a preset
spending limit based on the user’s credit limit.)
• Debit cards ( cards removes the amount of the charge from
the cardholder’s account and transfers it to the seller’s bank. )
• Cards such as one from American Express, carries no preset
spending limit.
11. ELECTRONIC CASH
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.
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
12. ELECTRONIC WALLETS
• 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
13. SMART CARD
• 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
