of Electronic Payment methods
Many electronic payment methods have been developed
with the advancements in the Internet technologies. Based on the value of money
transactions, processing time, processing requirements, security issues and
usability, electronic Payment systems are generally classified into two types.
● Micro electronic Payment Systems
● Macro electronic Payment Systems
It is an on-line payment system designed to allow
efficient and frequent payments of small amounts. In order to keep transaction
costs very low, the communication and computational costs are minimized here.
Unlike macro electronic payments, which use expensive public key cryptography,
micro electronic payment are relaxed by using light weight cryptographic
primitives and off-line payment verifications.
As the security of micro electronic payment systems
is comparatively low it can be tampered but, the cost of fraud is much higher
than the possible value to be gained by fraud itself. So the security in micro
electronic payment methods is considered to be adequate. The majority of micro
electronic payment systems are designed to pay for simple goods on the
Internet. e.g., subscriptions of online games, read journals, listen to a song
or watch a movie online etc.
In general, the parties involved in the micro
on-line payments are Customer, Service Provider and Payment processor. The
Micro electronic payment transactions can be explained in the following way.
Step 1 Customer
proves his authentication and the
payment processor issues micro payments.
Step 2: Customer
pays the micro payments to the
online service provider and gets the requested goods or services from them.
Step 3: Service
provider deposit micro payments
received from the customer to the payment processor and gets the money.
Macro electronic payment systems support payments
of higher value. The security requirements are more rigorous in macro payment
systems because of huge money transactions. Banks will impose a minimum
transaction overhead on macro payment systems. These transactional over heads
for the usage of computationally expensive cryptographic operations prevent
these payment systems to be used for the payment of small amounts. Some of the
popular macro on-line payment systems are mentioned below
● Card based payment systems
● Electronic account transfer
● Electronic cash payment systems
● Mobile payment systems and internet payment