The capability of buying and selling products, information and services on

the Internet and other online environments.

Electronic payment systems have been in operations since 1960s

Traditionally, a customer sees a product, examines it, and then pays for it by

cash ,

check, or credit card.

Payment (credit card,

cash, check)

Products/service

Costumer Businessma

n

Traditional payment

scheme

Payment

(EFT, E cash, E check, E

wallet, )

Products/service

Costumer Virtual Business

man

Electronic payment scheme

In the e-commerce world, in most cases the customer does not actually see

the

concrete product at the time of transaction, and the method of payment is

performed electronically.

1. Consumer buys e-cash from Bank.

2. Bank sends e-cash bits to consumer.

3. Consumer sends e-cash to merchant.

4. Merchant checks with Bank that e-cash

is valid (check for forgery or fraud)

5. Bank verifies that e-cash is valid

6. Parties complete transaction.

Merchant

Consumer

Bank

1

2

3

4

5

E-cash

Concept

EPSs enable a customer to pay for the goods and services online by

using integrated hardware and software systems.

The main objectives of EPS are to increase efficiency, improve security,

and

enhance customer convenience and ease of use.

While customers pay for goods/services by cash, check, or credit cards

in conventional businesses, online buyers may use one of the following

EPSs to pay for products/services purchased online.

• PAYMENT CARDS:

Credit cards, debit cards, charge cards and electronic wallet. They are the

most popular tool for electronic payment transactions.

Credit cards:

o A very common method of payment .

o Credit cards issued by credit card companies (e.g., MasterCard, Visa) and

major banks (e.g. United Bank , HBL etc).

o The customer uses these cards to buy goods and services or get cash

from the participating financial institutions.

o Unique 16-digit number (including check digits) and an expiration date

o Two limitations of credit cards are their unsuitability for very small or very

large payments.

o It is not cost-justified to use a credit card for small payments. Also, due to

security issues, these cards have a limit and cannot be used for

excessively large transactions

Debit cards

Debit cards task similar to checks in that the charges will be

taken from the customer's checking account.

The benefit for the customer is the easiness of use and

convenience.

These cards also keep the customer under his budget

because they do not allow the customer to go beyond his

resources.

The advantage to the merchant is the speed at which the

merchant collects these charges.

Charge Cards

Charge cards are similar to credit cards except they have no revolving credit line,

so the balance must be paid off every month.

Credit, debit, and charge card methods of payments have been successfully utilized in the pre-Internet period,

and they are often used in the e-commerce world as well.

Some of the reasons for their popularity in the e-commerce world are their availability , easy of use, and acceptance. To use these cards as an online payment system.

Electronic wallets

Electronic wallets being very useful for frequent online

shoppers are commercially available for pocket.

They offer a secure, convenient, and portable tool for

online shopping.

They store personal and financial information such as credit

cards, passwords, PINs, and much more.

Electronic wallets allow higher speed and efficiency for

online shoppers.

ALTERNATE CUNSUMER PAYMENT

OPTIONS

Although electronic payment is more convenient , internet

merchant’s that do not accept credit cards can accept

payments such as checks or money orders through the

mail.

Cash on delivery (COD) is another possible, but rarely

used , option for those hesitant to pay electronically.

Banks and businesses are also creating option for online

payment that do not involve credit cards.

Companies such as AmeriNet ( www.debit-it.com) allows

merchants to accept a customer ‘s checking-account

number as a valid form of payment .

AmeriNet provides authorization and account settlement,

handles distribution and shipping (known as fulfillment ) and

manages customer service inquiries.

The most common alternative payment methods are debit

cards, charge cards, prepaid cards, direct debit, bank

transfers, phone and mobile payments, checks, money orders and

cash payments.

Types :

THE END

Design By: Izaz Khan Roghani