1. Assignment on
CHAPTER 15: GETTING THE MONEY
Subject code: BAN 385

2. Submitted To:
Md. Zillur Rahman
Assistant Professor
Dept. of Business Administration
Shahjalal University of Science and Technology
Submitted By: Team One
Syeda Fatima Banu 2009731007
Muhsina Jannat 2009731015
Sharmistha Tribedi 2009731020
Taskia Akter 2009731039
Mahmuda Akter 2009731045

3. Learning Objectives:
• Real-world Cash and Electronic Cash
• Key Requirements for Internet-based Systems
• Electronic Transaction System
• Secure Electronic Transactions
• Electronic Payment Media
• Methods of E-payment
• General Guide to E-payment
• Issues and Implications

4. Real World Cash: Money
• Money is a medium of exchange to simplify transactions, a
standard of value to decide the worth of goods, and a store of
value to facilitate savings.
Money offers the following features:
 Convenience  No hidden cost of use
 Wide acceptance  No audit trail
 Anonymity

5. Electronic Money (E-Money)
• E-Money: an electronic media for making payments.
• There are four types of e-money:
1. Identified and online (+I+L): credit card and debit card
transactions
2. Identified and offline (+I-O): purchasing by check or postal
money order
3. Anonymous and online (-I+L): cash payments
4. Anonymous and offline (-I-L): electronic cash

6. There are two distinct sets of properties should be considered
in money transfer:
ACID Test
1. Atomicity 3. Isolation
2. Consistency 4. Durability
ICES Test
1. Interoperability 3. Economy
2. Conversion 4. Scalability

7. Internet Based Payments
• Electronic Payment: financial transactions made without use
of paper documents.
• Users: PayPal, Brodia, CyberCash, e-cash, eCharge,
InternetCash, iPIN, Qpass, Windows Live ID etc.
• Four main Internet based payment systems:
Electronic Currency Debit Cards
Credit Cards Smart Cards

8. Properties of E-Payment System
• Several nontechnical properties are relevant to an
electronic payment system -
▫ Acceptability
▫ Ease of Integration
▫ Customer Base
▫ Ease of Use and Access

9. Electronic Transaction System: CyberCash
• Electronic transaction system makes it possible to process
transactions over the Internet.
• CyberCash is an internet payment service which offered a
range of e-commerce solution using E-Transaction System.
• Initially provided an e-wallet software to consumers and
software to merchants to accept credit card payments.
• They offered "CyberCoin", a micropayment system modeled
after the NetBill research project.
• On January 1, 2000, CyberCash fell victim to the Y2K Bug,
got bankrupt on March 11, 2001.

10. Secure Internet Credit Card Payment Process
• The main CyberCash transaction systems centered on secure
credit card payment with the following procedures:

11. Secure Electronic Transactions (SET)
• SET protocol is a proven standard for handling transactions
on the Internet.
• The system is administered jointly by Visa and MasterCard
to ensure reliable E-Payment Media.
• It was developed with four important goals:
1. Confidentiality of payment
2. Integrity of transmitted data
3. Authentication of card user
4. Interoperability across network providers.

12. Classical flow of a SET Transaction

13. Electronic Payment Media
• Different companies, such as PayPal, WebMoney etc are
working as Electronic Payment Medias to transfer E-Payment.
• There are three types of electronic payment media
1. Trusted third party: Banks, that maintain all sensitive
information.
2. Notational fund transfer-related type: Visa/Master
Card’s SET based transactions.
3. Digital cash or electronic money: allows the transfer of
money itself which carry values.

14. Credit Card
• Credit card is a plastic payment card issued by a
financial institution for the purchase of goods or
services on credit to users as a system of payment.
• Features of credit card:
▫ Leaves a complete audit trail
▫ Are not well suited for impulse buying
▫ Are not convenient for making small products

15. Process of Credit Card Transaction

16. Risks of Using Credit Cards
• Though monthly full payment is not made, interest will
be charged.
• Interest charged from the date of purchase even before the
payment.
• Credit card transactions result in immediate credit to the
merchant’s bank account as cash.
• Card holder’s risk of losing a credit card amount to $50
and has to notify the issuing bank.
• A card holder can dispute charges or purchases to the card
issuer if he is not satisfied.

17. Credit Card Laundering
• A violation of merchant's agreement with the bank or
credit card company.
• Allowing a person to use a merchant account though he
has no own merchant account.
• Customers and credit card issuing company face losses
and write off the amount to bad debt.
• Simple procedure for earning extra cash by merchant.
• Often turns into losses beyond all commissions.
• This practice is illegal and strictly prohibited.

18. Debit Card
• Debit card is a payment card that transfers funds directly from
the customer’s bank account to the merchant. It look exactly
like credits cards, except they directly tap customer’s checking
account every time he makes a purchase or a withdrawal.
• Features of Debit Card:
Convenience
Widely Accepted than checks
Easy Application
No Grace Payment Period
Less Protection for Undelivered Items
Risks for Merchants - Overspent Customers

19. Difference between Debit and Credit Card
Debit card Credit card
A debit card takes money Credit card charges money to
directly from customer’s customers line of credit.
banking account
Debit card is a quick-pay-now There is generally a grace
process where no grace period period of approximately thirty
is given. days before interest is charged
in credit card purchase.
Debit card carries less security With credit card purchases,
for undelivered, defective or customer can contest the
fraudulent items. charge and put a hold on
payments.
Debit cards are used for retail Credit cards are used for large
or small purchases on faith. businesses.

20. Smart Card
• A thin and credit card sized piece of plastic provide
identification, authentication, data storage and application
processing
• Contains a half-inch-square area that serves as the card’s
input/output system
• With a built-in chip capable of storing information in its
memory
• Used typically for electronic processes such as financial
transactions
• First produced by Motorola, in 1977

21. Uses & Applications of Smart Card
• Provides users with the ability to make a purchase
• Holds cash, ID information, and a key to a house or an office
• Provides three categories of applications -
1. Authenticate an individual’s claim of personal identification
2. Authorization for things like drug prescription fulfillment
and voting purposes
3. Transaction processing and capturing fingerprint
• Provides encryption and decryption of messages to ensure
security, integrity, and confidentiality
• Acts as a carrier of value, called as an Electronic Purse

22. DigiCash and E-Cash
• DigiCash:
▫ Another alternative method of digital payment
▫ Leaves no audit trail
▫ Offers true digital economy
▫ Resistance from the treasury department
▫ One such digital cash system is CyberCoin
• E-Cash:
• Electronic currency service
• Requires a client-server interaction
• Customers buy it with a secure credit card transaction
• Safest way for fraudulent protection

23. E-Wallet
• An electronic payment system that operates like a carrier
of e-cash and information in the same way a real world
wallet functions.
• It gives the shopper a single, simple, and secure way of
carrying currency electronically.
• Trust is the basis of the e-wallet as a form of electronic
payment.
• The most popular wallet vendors are Brodia.com, IBM,
Yahoo!, Trintech, eWallet, CyberCash, America Online
and so on.

24. Electronic Funds Transfer and Automated
Clearing House
• Electronic Funds Transfer (EFT)
▫ A computer-based system that facilitates the transfer
of money between two financial institutions.
• Automated Clearing House (ACH)
▫ Where Bank’s transactions involve more than one
financial institution routing to debit and credit the
correct accounts.

25. Generic Life Cycle of Check Clearance

26. M-Commerce and M-Payment
▫ The ability to secure payments over wireless devices like
mobile phones and personal digital assistant (PDA).
▫ Depends on its payment infrastructure, delivering
confidential data safely and reliably.
▫ Capable of handling payments between authorized parties
in a consistent and interoperable manner.
▫ Products and services are - Mobile ATM, Mobile ticketing,
vouchers, coupons and loyalty cards, Content purchase and
delivery, Location-based services, Mobile banking,
brokerage. Auctions, Mobile marketing and advertising etc.

27. General Guide to E-Payment
• Using a secure Web browser
• Reading the Web site’s privacy policy carefully
• Figuring out merchant’s refund policies in advance
• Investigating the trustworthiness of the merchant before
initiating a purchase
• Keeping a record of all online transactions and check e-mail
and other contacts regularly
• Reviewing credit card statements line-by-line to ensure
authenticity

28. Issues and Implications Regarding Electronic
Payment Methods and Methodologies
• Consumer Needs
• Corporate Processes
• Corporate Strategy
• Regulation of Competition
• Economics & Social Processes

29. Thank You For
Being With Us