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Monday, March 19, 2012

Explain Different Types of Popular e-Payment Systems

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What are the popular e-payment systems? Explain.



Explain Different Types of Popular e-Payment Systems
Explain Different Types of Popular e-Payment Systems



The following are the most popular e-payment systems
1) Credit Card 2) Debit card 3) EFT 4) Stored value cards and e-cash 5) e-checks


1: Credit Card

 
What are different types of e-payment systems in e-commerce
What are different types of e-payment systems in e-commerce

The Credit Card is plastic credit card with a magnetic strip issued by a bank or financial institution. Holders of a valid credit card have the authorization to purchase goods and services up to a predetermined amount, called a credit limit. The vendor receives essential credit card information from the cardholder, the bank issuing the card actually repays the vendor, and eventually the cardholder repays the bank through regular monthly payments. If the entire balance is not paid in full, the credit card issuer can legally charge interest fees on the unpaid portion.

2: Debit Card:


A debit card is a plastic card issued by banks to customers. The card allows instant purchase, removing the correct balance from the user’s attached bank account. Debit cards are distinct from credit cards in that they allow purchase based on available funds in the account to be deducted immediately, instead of by using a line of credit that can be repaid at a later time. Debit card/Check card is used instead of cash in shopping. The Buyer’s account is instantly debited. It is an alternative to carry cash or check book.
Advantages:

  • Obtaining Debit card is easier then Credit card.
  • Debit card frees you from carrying cash.
  • Merchants prefer debit card then check.

3.ELECTRONIC FUND TRANSFER (EFT):


Electronic fund transfer is used to transfer money value from one account to another in same or different bank electronically. EFT refers to any fund transfer initiated by an electronic terminal, including Credit card, ATM, Point of sale terminal or Internet based EFT.
EFT is safer, secure, efficient and less expensive. While it costs the U.S Govt $1.03 to issue each check payment. It costs only .05 cents to issue on EFT payments.

4. Stored value cards & E-Cash:


E-Cash is cash usually stored in smart card or E-Wallet. It can be used for micro E-Payments. Suppose a consumer has purchased a digital picture or listened a song for $.25 fee.
Now the minimum cost to process E-Payment by credit card is about $1.00 which should be charged to seller. In such cases E-Cash payment system can be used.

5. Electronic Check or e-check:

A form of payment made via the internet that is designed to perform the same function as a conventional paper check. Because the check is in an electronic format, it can be processed in fewer steps and has more security features than a standard paper check. Security features provided by electronic checks include authentication, public key cryptography and digital signatures. Electronic checks have been developed in response to the e-commerce transactions. Electronic checks can be used to make a payment for any transaction that a paper check can cover and are governed by the same laws that apply to paper checks.This is the first form of internet-based payment that the U.S. Treasury uses for making large online payments.
An eCheck is an electronic order to your bank to pay the amount specified from funds in either your checking or savings account. This is also referred to as a web check or an ACH payment.
To process an eCheck, you must enter your bank information into the student eCommerce system. The bank information needed is your bank's 9-digit bank routing number and either your checking or savings account number.

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