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Paper based payments
Use of paper based instruments(like cheques, drafts,) accounts for nearly 60% of the volume of total non-cash transactions in the country.
In value terms, the share is presently around 11%.
Paper based payments occupy an important place in the country, Reserve Bank had introduced Magnetic Ink Character Recognition(MICR).
Technology for speeding up and bringing in efficiency in processing of cheques.
What is E-payment ?
E-payment as defined as electronic payment is subset of an E-commerce transaction. It includes electronic payment for buying/selling or services which are offered on the internet.
Objectives of E-payment
To understand the concept of Electronic Payment System and its security services. To bring out solution in the form of applications to uproot Electronic Payment. To understand working of various Electronic Payment System based applications. Principles and Recommendations
CPSS (committee on payment and settlement systems) core principles for systematically Important payment systems (SIPS)
CPSS-IOSCO Recommendations for securities settlement systems (SSS) CPSS-IOSCO Recommendations for Central Counter Parties (CCP)
Types of E-payment system
Debit and credit cards
Peer to payment
B2B and B2C transactions E-cash
It is defined as Electronic cash. It is an internet based system generated by a computer
It allows fund to be transferred items should be purchased by debit/credit card, cheque or money order.
It is more efficient and has lower transaction cost Micro payments
A micropayment is an E-commerce transaction involving a very small sum of money in exchange for something made available online. such as application download, a service web based content etc.,
Debit card & Credit card Debit card :-
A debit card is a plastic card that provides the card holder electronic access to his bank account to withdraw cash or pay for goods and services.
It removes the need to go to your bank to make payments it also gives you the ability to take
directly cash from ATM‘s
credit card is a card issued by a financial company giving the holder an option to borrower funds.credit card charge interest and are primarly used for short term financing. It is most used payment system given its high convenience.
Smart card :
Smart card is a plastic card in the size of credit card with an embedded microchip that can be loaded with data, used for telephone calling, electronic cash payments and other application.
It stores more information than magnetic strip card. It contain information such as
Credit card no
Health insurance etc., Peer to Peer payment
It allows the transfer of electronic cash (E-cash) Via E-mail between two people who have account at E-cash enabled Bank.
Peer to peer transaction allow online financial transfers between consumers. B2B and B2C Transactions
The fastest grossing sector of E-commerce Payment is B2B transactions.
These payment are much larger than B2C transactions and involve complex business accounting system
E-Payment pros & cons Pros :
Potential for great flexibility
Low transaction costs
Rapid and diverse purchase power
Perfect copying of transactions is possible
Vulnerability to world wide attack
Lack of anonymity, potential for privacy intrusion.
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