E-Commerce Payment Systems

E-Commerce Payment Systems

• E-commerce involves electronic payment methods, enabling paperless monetary transactions and reducing paperwork and transaction costs.
• Electronic payments enhance business efficiency, reduce labor costs, and facilitate market expansion.

Modes of Electronic Payments

• Credit Card:

  • A plastic card with a unique number and magnetic strip enabling transactions.
  • Purchases are paid by the issuer bank; the customer repays the bank within a specified period.
  • Key players include the card holder (customer), merchant (seller), card issuer bank, acquirer bank (merchant's bank), and card brand (e.g., Visa, Mastercard).

• Debit Card:

  • A plastic card linked directly to the user's bank account for immediate fund deduction.
  • Requires sufficient balance for transactions to proceed, differing from credit cards which allow borrowing.

• Smart Card:

  • Similar in appearance to credit and debit cards but contains a microprocessor chip.
  • Capable of storing personal and work-related information.

• E-Money:

  • Refers to transactions conducted over a network, facilitating direct fund transfers between financial entities without intermediaries.
  • Offers faster and efficient processing compared to traditional methods.

• Electronic Fund Transfer (EFT):

  • Popular method for transferring funds between bank accounts, whether in the same or different banks.
  • Requires login to the bank's website, enabling customers to initiate transfers to other accounts, with notifications upon completion.

Security Systems for E-Payments

• Confidentiality:

  • Ensures information remains inaccessible to unauthorized users and is not intercepted during transmission.

• Integrity:

  • Protects information from alteration during transmission, maintaining its original state.

• Availability:

  • Guarantees access to information whenever needed within a specified time frame.

• Authenticity:

  • Mechanisms are in place to verify a user's identity before granting access to sensitive information.

• Non-repudiation:

  • Protects against denial of orders or payments, ensuring senders cannot deny sending messages and recipients cannot deny receiving them.

• Encryption:

  • Information is secured with encryption and can only be decrypted by authorized users, ensuring data protection.