Electronic Payment

9 Key excerpts on "Electronic Payment"

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  eBook - ePub

  E Commerce for Entrepreneurs

  Launch your E-commerce startup with strong technology and digital marketing (English Edition)

  • Priyanka Tyagi, Dr. Sudeshna Chakraborty, Priyanka Tyagi(Authors)
  • 2020(Publication Date)
  • BPB Publications

    (Publisher)

  An e-payment system may be a way of constructing transactions or paying for merchandise through an electronic medium without using checks or money. It's also referred to as electronic or online payment system. The Electronic Payment system has adult more and the last decades because of the growing unfold of internet-based banking and looking. Because the world advances a lot with technology development, we are able to see the increase of Electronic Payment systems and payment process devices. As this increase, improve, and supply ever safer online payment transactions the share of check and money transactions can decrease.

  4.2 Types of Electronic Payment Systems

  When you purchase products and services online, you acquire them using an electronic medium. This mode of payment is called an e-commerce payment system and is also known as an online or Electronic Payment system.

  The growing use of Internet banking and searches has seen the expansion of assorted e-commerce payment systems and technology has developed to extend, improve, and provide secure e-transactions.

  Paperless e-commerce payments have revolutionized the payment process by reducing paperwork, dealing with prices, and personnel price. These systems are easy and consume less time than manual payment processes, facilitating businesses to extend their market reach.

  Type 1: EFT - Notational Funds Transfer

  The second kind of payment system doesn't rely upon a central process intermediator. Instead, sensitive payment info (like MasterCard or checking account number) is transmitted alongside orders, that is in result associate open web implementation of economic Electronic Knowledge Interchange (EDI) (see Figure 4.1 ) associate Electronic Funds Transfer (EFT)

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  The E-Commerce Book

  Building the E-Empire

  • Steffano Korper, Juanita Ellis(Authors)
  • 2000(Publication Date)
  • Morgan Kaufmann

    (Publisher)

  In fact, if performed correctly, 125 126 THE E-COMMERCE BOOK electronic purchases prove far more secure than other purchases, as tradi- tional, paper-based methods frequently display complete and unen- crypted credit card numbers. Most credit card transactions within the U.S. economy occur over dial-up lines between merchants and cardholders. In the Internet econ- omy, many sites still rely on these protocols; this is especially true for merchants with existing retail systems in which a Web site acts as a counterpart to brick-and-mortar storefronts. Electronic Payment systems handle the monetary exchange transac- tions for goods and services. Along with traditional monetary instru- ments such as bank notes, drafts, and credit cards, the e-commerce world employs a variety of tools. However, each tool can be judged on its con- formance to the following requirements: independence, security, privacy, anonymity, transferability, divisibility, ease of use, and total cost. Follow these steps in order to choose payment systems that will best facilitate your transactions: 1. Learn the various categories of Electronic Payment systems, including new smart card options. 2. Find the category that dominates e-commerce. 3. Examine the differences in how transactions work in the physical world versus online. 4. Plan to put the components to enable Electronic Payments into place. 5. Evaluate payment methods for their ease-of-use by all parties involved, including consumers, merchants, and financial institutions. 6. Know the actual costs of a transaction. 7. Set up credit card verification. 8. Enact protocols that ensure online security. 9. Help your customers develop trust in online transactions. PaymentSystemCategories Electronic Payment systems fall into a variety of categories, based on their function. Micropayments, although measured in pennies, will enhance several aspects of e-commerce when a more innocuous busi-

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  Information Technology Management

  • (Author)
  • 2014(Publication Date)
  • Orange Apple

    (Publisher)

  Generally, larger firms have grown at the expense of smaller ones, as they are able to use economies of scale and offer lower prices. The lone exception to this pattern has been the very smallest category of bookseller, shops with between one and four employees, which appear to have withstood the trend. Electronic Funds Transfer Electronic funds transfer or EFT is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems. ________________________ WORLD TECHNOLOGIES ________________________ The term is used for a number of different concepts: • Cardholder-initiated transactions, where a cardholder makes use of a payment card • Direct deposit payroll payments for a business to its employees, possibly via a payroll service bureau • Direct debit payments, sometimes called electronic checks , for which a business debits the consumer's bank accounts for payment for goods or services • Electronic bill payment in online banking, which may be delivered by EFT or paper check • Transactions involving stored value of electronic money, possibly in a private currency • Wire transfer via an international banking network (generally carries a higher fee) • Electronic Benefit Transfer In 1978 U.S. Congress passed the Electronic Funds Transfer Act to establish the rights and liabilities of consumers as well as the responsibilities of all participants in EFT activities in the United States. PayPal PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to traditional paper methods such as checks and money orders. A PayPal account can be funded with an electronic debit from a bank account or by a credit card.

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  Institutional Change in the Payments System and Monetary Policy

  • Stefan W. Schmitz, Geoffrey Wood(Authors)
  • 2007(Publication Date)
  • Taylor & Francis

    (Publisher)

  4 The evolving payments landscape and its implications for monetary policy

  Sujit Chakravorti 1

  While the literature on the economics of exchange and the role of money is rather extensive, economists have devoted less time linking the evolution of the payment system and its potential implications for monetary policy.2 A smooth functioning payment system is vital for effective implementation of monetary policy. The key questions that this chapter asks are: (1) How is the payment system evolving? (2) What are the economic forces driving the adoption of new payment instruments? (3) Would recent developments in the payment system limit the central bank from conducting monetary policy?

  Large-value payment systems migrated to electronic systems in advanced economies many years ago and account for the bulk of the total value of payment transfers. However, large-value payments account for a small proportion of the total number of payment transactions.3 On the other hand, the migration from paper payments to electronic substitutes has been significantly slower for small-value or retail transactions in many advanced economies. Today, more and more payments are made via payment cards that either debit a customer’s transactions account at financial institutions or access a line of credit extended by a financial institution or a merchant. Transactional use of currency along with checks continues to decline in most advanced economies.

  More recently, stored-value cards, usually plastic cards similar in size to credit cards, are able to mimic many characteristics of money. In this chapter, stored-value cards will be defined as cards where the monetary value is recorded on the card and online verification is not necessary for the transaction to be completed. While the adoption of general-purpose stored value cards has been slow, stored value has been successfully adopted for closed-loop systems such as university campuses, military bases, and transportation systems. Financial institutions along with merchants have started to consider expanding closed-loop payment mechanisms to a wider class of merchants.

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  Cybercash

  The Coming Era of Electronic Money

  • Robert Guttmann(Author)
  • 2002(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  The internet provides a centralized and global network which will eventually absorb and/or replace all the autonomous fund-transfer networks set up by banks during the first phase of money automation. E-money is about to be turned into cybercash. Any technology-driven and innovation-rich object, such as electronic money or for that matter cybercash, is inherently difficult to define. You are faced with the problem of having to describe a dynamic phenomenon within a comparatively static framework. This dilemma is clearly evident in the official central bank definitions of electronic money supplied by the BIS. Those definitions always refer to three specific e-money variants which at the time had already emerged as coexisting alternatives, but which also represent different stages in the leap from electronic money to cybercash. 9 10 Cybercash The first and least advanced form of e-money is referred to as access products (Bank for International Settlements, 1996b, pp. 3-4). These are electronic means of communication, such as computers, which enable consumers to access otherwise conventional payments services. Credit-card payments on the internet would fall in that category, as would most online banking activities. Check conversion, which replaces paper checks with ACH transfers, would also qualify. The second type of electronic money consists of 'stored-value' cards with which to execute payments via POS terminals, through devices that are directly connected to each other, or over open communication networks such as the internet. Such prepaid cards, which sometimes are also referred to as electronic purses, store value inasmuch as they contain a record of spendable funds in the card-holder's possession. This type of electronic money involves hardware, specifically the cards and connection devices (for example POS terminals, card readers attached to PCs).

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  Payment Systems

  From the Salt Mines to the Board Room

  • D. Rambure, A. Nacamuli(Authors)
  • 2008(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  These will determine the most appropriate operating mode, legal framework, security level and tech- nology. Payment systems operate in a competitive environment and technological innovation is one of the most important drivers in the evolution of payment, chip cards being one of the most obvious examples. 3 4 The Structure and Economics of Payment Systems This opening chapter will attempt to define and describe some funda- mental concepts which will enable readers to understand the rationale behind the various payment instruments and systems described. 1 Introduction and basic concepts ‘A payment system consists of a set of instruments, banking proce- dures and, typically, interbank funds transfer systems that ensure the circulation of money’ 1 and normally requires: • a payment instrument, for example cash, a cheque, an electronic funds transfer, a credit or debit card; • scheme rules defining the procedures, practices and standards agreed between the payment service providers; • a transfer mechanism; and • a legal framework to guarantee irrevocable and unconditional finality, that is the discharge of the obligation between debtor and creditor. It is particularly important to distinguish between the information rel- evant to the payment and the final transfer of value. If you settle a purchase in cash for instance, your debt is immediately extinguished. If, however, you remit a cheque, the vendor will need to clear the cheque to ensure that the drawer has sufficient funds (or credit line) on his account for the cheque to be honoured (that it will not ‘bounce’) which can sometimes take a few days.

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  The Future of Financial Markets

  • D. Mayes(Author)
  • 2006(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  146 5 E-Money: An Addendum An area where forecasts made 25 years ago, before European financial integration was firmly on the agenda, are rather surprisingly astray, is e-money. With the rapidly rising use of credit cards at the time and the replacement of paper-based giro by ATMs, in Finland at least (see Chapter 2 on payments), one would have expected that notes and coins would be steadily replaced by electronic cards (purses – see Box for a definition) for low value transactions. 1 Trial schemes were already being undertaken and the technology for reliable transactions exists and is in use. As it is, although notes and coins in circulation A definition of an electronic purse The key characteristics of an electronic ‘purse’ are that it is a ‘card’, whose value is purchased in advance, that can be used for a range of payments for different goods and services in different outlets for typical everyday small value retail payments that would otherwise have required coins or low denomination notes. A further require- ment that is sometimes added to differentiate such cards from debit cards is that the transaction can be completed on the spot between the card and the reader without recourse to a base station to check account information through a telecommunications link. 2 1 See Wenninger and Laster (1995) and ECB (1998) for definitions of what con- stitutes electronic purses and e-money in this context. 2 Strictly speaking they could be any shape or size sufficient to incorporate the electronic chip but there is now a worldwide standard size for cards, although thickness varies a little. D.G. Mayes et al., The Future of Financial Markets © David G. Mayes 2006 have fallen substantially in most countries compared to nominal income, this is more a result of the rise in the use of credit and debit cards for larger value transactions and the development of secure inter- est bearing highly liquid alternatives for cash balances.

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  Protocols for Secure Electronic Commerce

  • Mostafa Hashem Sherif(Author)
  • 2003(Publication Date)
  • CRC Press

    (Publisher)

  27 2 Money and Payment Systems ABSTRACT In this chapter, we describe the fi nancial context within which the demate-rialization of means of payment is taking place. The fi rst part of the chapter is dedicated to the “classical” forms of money and the means of payment in some developed countries. The second half corresponds to “emerging” mon-ies, either in “electronic” or “virtual” forms. 2.1 The Mechanisms of Classical Money The term money designates a medium that can be used to certify the value of the items exchanged with respect to a reference system common to all parties of the transaction (Berget and Icard, 1997; Dragon et al., 1997, p. 17; Fay, 1997, p. 112; Mayer, 1997, p. 37). Thus, money represents the purchasing power for goods and services and has three functions: • It serves as a standard of value to compare different goods and services. These values are subjective and are affected, among other things, by currency fl uctuations. • It serves as a medium of exchange, as an intermediary in the process of selling one good for money, thereby replacing barter. • It serves as a store of value and of purchasing power. Money permits postponement of the utilization of the product of the sales of goods or services. This saving function is maintained on the condition that the general level of prices remains stable or increases only slightly. The practical terms of money depend on theoretical considerations on its nature and its intrinsic value. Primitive forms of money corresponded to 28 Protocols for Secure Electronic Commerce, Second Edition needs for storage and exchange on the basis of valued objects. Accordingly, money fi rst took a materialistic nature, in the form of a coin with a speci fi c weight and minted from a precious metal. Today, the value of money corre-sponds to a denomination that is independent of the material support medium.

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  Frontiers of Banks in a Global Economy

  • Philip Molyneux, Eleuterio Vallelado(Authors)
  • 2007(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  of use of electronic money instruments: in both cases it is useful to understand the reasons and the causes which have created these differences. Therefore, when studying the characteristics of the demand side, it seems useful to adopt an approach which also considers the factors which encourage or restrict the adoption of innovative forms of payment. 10.3 Empirical studies on payment card usage: a review Empirical studies related to payment card and electronic money use can be divided into two different groups. The first group consists of all the studies that have interpreted the phenomenon with an emphasis on the macroeco- nomic effects of the processes by which different types of instrument are chosen. Some authors (Humphrey, Pulley and Vesala, 1996) have analysed the phenomenon in relation to a number of economic (income per capita, ATM and POS availability) and institutional variables (crime rates, concen- tration of the banking system) that could be directly linked to the use of tra- ditional and innovative payment instruments. The empirical analyses have measured both differences among countries and impacts on the payment system as a whole, in terms of operation pricing and differences in product ranges, in search of theoretical models capable of providing a general equilibrium (Shy and Tarkka, 2002). In this first group of studies it is essential to remember the work of Humphrey, Kim and Vale (2001), with its important contribution of a model for consumers’ choice of different payment instruments (cash, cheques, and debit cards) based on own price, cross prices, and payment substitution flex- ibility: the authors show that consumers are very sensitive to prices when it comes to making their choices.

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