2. Introduction Of Electronic Commerce
Electronic commerce is a modern business methodology that addresses the needs of
organization, merchants, and consumers to improving the quality of goods and services and
increasing the speed of service delivery.
E-commerce is associated with:The buying and selling of information,
Products and servicesvia computer network.
3. 1. In 1970 EFT (Electronic fund transfer) incorporated into the banks to fund transfer.
2. Form 1972 to1980 increases the properly e-commerce in cooperated sector. These
sector included the fallowing services :Electronic messaging technology,
Electronic data Interchange,
3. From 1982 to 1990 the electronic messaging technology becomes a vital part of
information in group computing system.
4. In mid of 1980 e-commerce technique is used by consumers, and that time online
5. In 1990 the introduction of World Wide Web over the internet, that was a revolution
aryl change in the e-commerce era.
What is E Payment
E payment is a subset of an e-commerce transaction to include electronic payment for buying
and selling goods or services offered through the Internet.
4. Electronic Funds Transfer (EFT)
“EFT is defined as “any transfer of funds initiated through an electronic terminal, telephonic
instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial
institution to debit or credit an account.”EFT utilizes computer and telecommunication
components both to supply and to transfer money or financial assets.”
Work on EFT can be segmented into three broad categories:
1. Banking and financial payments
large-scale or wholesale payments(e.g., bank-to-bank transfer)
Small-scale or retail payments(e.g., automated teller machines and cash
Home banking(e.g., bill payment)
2. Retailing payments
Credit cards(e.g., VISA or MasterCard)
5. Private label credit/debit cards(e.g., J.C. Penney Card)
Charge cards(e.g., America Express)
3. On-line electronic commerce payments
Electronic cash(e.g., DigiCash)
Electronic checks(e.g., NetCheque)
Smart cards or debit cards(e.g., Mondex Electronic Currency Card)
“Electronic cash, also known as digital cash, is a technology that uses varied
electronic methods to execute financial transactions.The electronic cash technology is
fast replacing the physical cash i.e. bank notes and coins, in the day-to-day use, for
small transactions. Electronic cash (e-cash) is a new concept in on-line payment
systems because it combines computerized convenience with security and privacy.”
How it is used:
E-cash is used over the Internet, email, or personal computer to other workstations in the
form of secured payments of "cash" that is virtually untraceable to the user. It is backed by
real currency from real banks.
The way e-cash works is similar to that of electronic fund transfers done between banks. The
user first must have an e-cash software program and an e-cash bank account from which ecash can be withdrawn or deposited. The user withdraws the e-cash from the account onto her
computer and spends it in the Internet without being traced or having personal information
available to other parties that are involved in the process. The recipients of the e-cash send
the money to their bank account as with depositing "real" cash.
6. The technology is classified into two types thatare the online form and the offline form.
1. ONLINE FORM:The online form of electronic cash involves conducting
transactions through the Internet, means we need to interact with a bank (via
a network) to conduct a transaction with a third party.
7. ONLINE FORM
2. OFFLINE FORM:The offline form involves the usage of the digitally encoded
smart cards, like the ATM cards or even credit cards. Offline means we can
conduct a transaction without having to directly involve a bank.
PROS OF E-CASH
The online electronic cash systems that are operated through the Internet
provide convenience to the user and the banker.
The online system can be accessed through the Internet from anywhere in the
world. Hence, the user does not have to actually go to the bank to transact any
8. Another advantage of online shopping is that the shopper can sit at home and
purchase the goods he wants, with the help of a credit card.
The concept of smart card also reduces the possibility of robbery. The smart
cards for withdrawal, like the ATM cards, are protected by passwords.
CONS OF E-CASH
The system of electronic cash is extremely convenient, but it is not a
foolproof system. The online electronic cash system has the same
problems as your email account and personal computer.
The online facility can be hacked or can also be infected with a virus,
if sufficient security is not provided. Some of the disadvantages of
electronic cash include serious misuse of a stolen smart card.
Electronic cheques are another form of on line payment system. They are designed to
accommodate the many individuals and entities that might prefer to pay on credit or
through some mechanism other than cash.
9. SMART CARD
A smart card, chip card, or integrated circuit card (ICC) is any pocket-sized card with
embedded integrated circuits. Since April 2009, a Japanese company has manufactured
reusable financial smart cards made from paper.
Currently or soon, we may be able to use a smart card to:
Dial a connection on a mobile telephone and be charged on a per-call basis
Establish your identity when logging on to an Internet access provider or to an online
Make small purchases at electronic stores on the Web (a kind of cyber cash)
Buy gasoline at a gasoline station
Definition of 'Debit Card'
An electronic card issued by a bank which allows bank clients access to their account to
withdraw cash or pay for goods and services. This removes the need for bank clients to
go to the bank to remove cash from their account as they can now just go to an ATM or
pay electronically at merchant locations. This type of card, as a form of payment, also
removes the need for checks as the debit card immediately transfers money from the
client's account to the business account.
10. Pros of Using a Debit Card or smart card:
2. It takes less time to complete a purchase.
3. It keeps you within budget.
4. They're easier to get than a credit card.
5. You can easily get cash.
Cons of Using a Debit Card or smart card:
1. Disputed charges can be more difficult to resolve.
2. Some banks may charge you extra fees.
3. You don't improve your credit score.
4. You can't take advantage of reward points.
5. It gives you lower levels of fraud protection.
Electronic payment systems in India
11. Due to the efforts of the RBI and the BPSS [BASELINEPERSONNEL SECURITY
STANDARD] now over 75% of all transaction volume are in the electronic mode,
including both large-value and retail payments. Out of this 75%, 98% come from the
RTGS (Real time gross settlement, large-value payments) whereas a meager 2% come
from retail payments. This means consumers have not yet accepted this as a regular
means of paying their bills and still prefer conventional methods. Retail payments if
made via electronic modes are done by ECS (debit and credit), EFT and card payments.
In India ‘plastics’ have been fast over-taking ‘papers’. With 130 million cards in
circulation currently, both credit and debit, and an increasing consumer base with
disposable income, India is clearly one of the fastest growing countries for payment
cards in the Asian-Pacific region. Behavioral patterns of Indian customers are also likely
to be influenced by their internet accessibility and usage, which currently is about 32
million PC users, 68% of whom have access to the net.E-payments have to be
continuously promoted showing consumers the various routes through which they can
make these payments like ATM’s, the internet, mobile phones and drop boxes.
The Indian payments systems have however undergone a change with respect to
methods of payments, there now being card-based payments, Electronic Funds
Transfers, Electronic Clearing Services and ways to pay via the mobile and internet. Most
large-scale payments concern corporate or government payments and are settled by the
RBI. Small-scale payments are mainly retail payments concerning individuals which are
generally paper-based transactions. Most large-value payments are handled