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Electronic payment system

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Electronic payment system

  1. 1. Electronic Payment <br />
  2. 2. OBJECTIVES<br /><ul><li>To understand the concept of Electronic Payment System and its security services.
  3. 3. To bring out solution in the form of applications to uproot Electronic Payment.
  4. 4. To understand working of various Electronic Payment System based applications.</li></li></ul><li>What Electronic Payment system is?<br />Electronic Payment is a financial exchange that takes place online between buyers and sellers. The content of this exchange is usually some form of digital financial instrument (such as encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an intermediary, or by a legal tender.<br />Electronic payment system is a system which helps the customer or user to make online payment for their shopping. <br />
  5. 5. Requirements For E-payments<br />The various factors that have lead the financial institutions to make use of electronic payments are:<br />Decreasing technology cost:<br /> The technology used in the networks is decreasing day <br /> by day.<br />Reduced operational and processing cost:<br />Due to reduced technology cost the processing cost of <br /> various commerce activities becomes very less. A very <br /> simple reason to prove this is the fact that in electronic <br /> transactions we save both paper and time.<br />Increasing online commerce:<br />
  6. 6. Some Examples Of EPS:-<br />Online Reservation<br />Online Bill Payment<br />Online Order Placing <br /> (Nirulas)<br />Online Ticket Booking<br /> ( Movie)<br />
  7. 7. Two Storage Methods<br /><ul><li>On-line
  8. 8. Individual does not have possession personally of electronic cash
  9. 9. Trusted third party, e.g. online bank, holds customers’ cash accounts
  10. 10. Off-line
  11. 11. Customer holds cash on smart card or software wallet
  12. 12. Fraud and double spending require tamper-proof encryption</li></li></ul><li>E- WALLETS<br />E- CASH<br />Types of EPS<br />SMART CARDS<br />CREDIT CARDS<br />
  13. 13. E-Cash<br />A system that allows a person to pay for goods or services by transmitting a number from one computer to another.<br />Like the serial numbers on real currency notes, the E-cash numbers are unique.<br />This is issued by a bank and represents a specified sum of real money.<br />It is anonymous and reusable.<br />
  14. 14. Electronic Cash Security<br />Complex cryptographic algorithms prevent double spending<br />Anonymity is preserved unless double spending is attempted<br />Serial numbers can allow tracing to prevent money laundering <br />
  15. 15. E-Cash Processing<br />Merchant<br />Consumer buys e-cash from Bank<br />Bank sends e-cash bits to consumer (after charging that amount plus fee)<br />Consumer sends e-cash to merchant<br />Merchant checks with Bank that e-cash is valid (check for forgery or fraud)<br />Bank verifies that e-cash is valid<br />Parties complete transaction<br />5<br />4<br />Bank<br />3<br />2<br />1<br />Consumer<br />
  16. 16. E-Wallet<br /><ul><li>The E-wallet is another payment scheme that operates like a carrier of e-cash and other information.
  17. 17. The aim is to give shoppers a single, simple, and secure way of carrying currency electronically.
  18. 18. Trust is the basis of the e-wallet as a form of electronic payment.</li></li></ul><li>Procedure for using an e-wallet<br />Decide on an online site where you would like to shop.<br />Download a wallet from the merchant’s website.<br />Fill out personal information such as your credit card number, name, address and phone number, and where merchandise should be shipped.<br />When you are ready to buy, click on the wallet button, the buying process is fully executed.<br />
  19. 19. Smart Cards<br /><ul><li>A smart card, is any pocket-sized card with embedded integrated circuits which can process data
  20. 20. This implies that it can receive input which is processed and delivered as an output</li></li></ul><li>Smart card Processing<br />
  21. 21. Smart Card Applications<br />Ticketless travel<br />Seoul bus system: 4M cards, 1B transactions since 1996<br />Planned the SF Bay Area system<br />Authentication, ID<br />Medical records<br />Ecash<br />Store loyalty programs<br />Personal profiles<br />Government<br />Licenses<br />Mall parking<br /> . . . <br />
  22. 22. Credit cards<br /><ul><li> It is a Plastic Card having a Magnetic Number and code on it.
  23. 23. It has Some fixed amount to spend.
  24. 24. Customer has to repay the spend amount after sometime.</li></li></ul><li>Processing a Credit cards payment<br />
  25. 25. Risk in using Credit cards <br /><ul><li>Operational Risk
  26. 26. Credit Risk
  27. 27. Legal Risk</li></li></ul><li>Secure Electronic Transaction<br />(SET) Protocol<br />Jointly designed by MasterCard and Visa with backing of Microsoft, Netscape, IBM, GTE, SAIC, and others<br />Designed to provide security for card payments as they travel on the Internet<br />Contrasted with Secure Socket Layers (SSL) protocol, SET validates consumers and merchants in addition to providing secure transmission<br />SET specification<br />Uses public key cryptography and digital certificates for validating both consumers and merchants<br />Provides privacy, data integrity, user and merchant authentication, and consumer nonrepudiation<br />
  28. 28. The SET Protocol<br />
  29. 29. Security Requirements of EPS<br />Integrity<br />Privacy<br />Safety<br />Authentication<br />Non-repudiation<br />
  30. 30. What Is Payment Gateways??<br /><ul><li>A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online Shopping, etc.
  31. 31. Payment gateway protects credit cards details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor.</li></li></ul><li>How It works???....<br />
  32. 32. Payments In India<br /><ul><li> Going the e-way</li></li></ul><li>e-PAYMENT SYSTEM IN INDIA<br /><ul><li>Ever-increasing technology changes.
  33. 33. Growing Internet access and mobile subscriber base
  34. 34. Rising consumer confidence.
  35. 35. Convenient delivery/payment models
  36. 36. India has been one of the fastest growing country for payment cards in the Asia-Pacific region.
  37. 37. India currently has approximately 130 million cards (both debit and credit) in circulation.</li></li></ul><li>GROWTH IN e-PAYMENT SYSTEM<br />
  38. 38. REGULATION- <br /><ul><li>The Reserve Bank of India (RBI) has been supportive in the development of electronic payments.
  39. 39. In this direction, the “Payments and Settlement System Act” was enacted .
  40. 40. Apart from being supporting, the RBI has also initiated various programs to encourage e-payments.</li></ul>CHANNELS OF PAYMENT-<br /><ul><li>Indian banks have put in place various channels of electronic payments in place to encourage customers to adopt the electronic mode.
  41. 41. Channels like the Internet, mobile, ATMs, and drop boxes are some of the most frequently used channels apart from bank branches.</li></ul>MARKET MAPPING-<br /><ul><li>E-payments processing market has two major players, namely</li></ul>Tech Process, and Bill Desk, which is a pure play electronic transaction processing company.<br />
  43. 43. The Indian Payment System Is Transforming From Paper Mode To Electronic Mode.<br />Two main reasons for such shift are:-<br />The regulator has mandated routing all high-value transactions electronically to minimize movement of money and risk.<br />At the retail end, customers are realizing the efficiency of electronic payments.<br />
  45. 45. TECHNOLOGICAL ADVANCEMENT IN e-PAYMENT<br />Electronic Clearing Service (Credit and Debit).<br />National Electronic Fund Transfer (NEFT).<br />THE RULING PLASTIC MONEY<br /><ul><li>Credit cards
  46. 46. Debit cards
  47. 47. ATM Cards</li></li></ul><li>CONCLUSION<br /> Expand Market beyond Traditional geographic market.<br /> Override traditional marketing system into digital marketing system.<br /> Made human life convenient as a person can pay his payments online.<br /> Increasing the cardholder base will bring challenges to banks:<br /><ul><li>Designing new products and services, managing default rates and loyalty programs,etc.</li></li></ul><li>THANK YOU<br />
  48. 48. Questions…??<br />
  49. 49. Feedback Time….<br />