Electronic payments ystem
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The document discusses a manufacturer business model and electronic payment systems presented by a group of students. It defines business models and e-commerce business models. It then covers the key components of a business model including value proposition, revenue model, market opportunity, and competitive advantage. The document also discusses electronic payment systems including e-cash, e-wallets, smart cards, and credit cards. It covers the capabilities of a B2C e-commerce model and the advantages and risks of different electronic payment methods.
Electronic payments ystem
- 1. GROUP - 05 2012 MANUFACTURER BUSINESS MODEL & ELECTRONIC PAYMENT SYSTEM GROUP MEMBERS: ABHISHEK BHATNAGAR ABHISHEK PAL AILZA DHIRENDRA SEETA PAL INSTITUTE OF BUSINESS SARJU VERMA MANAGEMENT 22/11/2012
- 2. Definition Business model A set of planned activities designed to result in a profit in a marketplace. A business model is the method of doing business by which a company can sustain itself that is, generate revenue. The business model spells out how a company makes money by specifying its position in the value chain. 2
- 3. Definition Cont… E-commerce business model A business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web. It includes the roles and relationships among a firm's customers, allies, and suppliers; the major flows of product, information, and money; and the major benefits to the participants.
- 4. Eight Key Ingredients of a Business Model Business Model Key Questions Components Value Proposition Why should the customer buy from you? Revenue model How will you earn money? Market opportunityWhat markets pace do you intent to serve, and what is its size? Competitive environment Who else occupies your intended market space? What Competitive advantage special advantages does your firm bring to the market space? Market strategy How do you plan to promote your products to attract customer? Organizational What types of organizational structures within the firm are development necessary to carry out the business plan? What kinds of experiences and background are important for Management team the company’s leaders to have?
- 5. RE LA TIO NB Raw material ET producer WE EN manufacturer B2 B AN DB distributor 2C B2 B retailer B2 consumer C
- 6. Introduction to B2C E-commerce B2C refers to a business communicating with or selling to an individual rather than a company B2C Customer Business/organization As the name suggests, it is the model involving business and consumers. In this model, online business sell to individual customers. Business to customer covers those e-commerce websites and transactions trough which organization sell goods to customer over the internet. B2C is also known as internet retailing or E- trailing.
- 7. Introduction to B2C E-commerce (Cont…) This category has expanded greatly in the late 1990s with the growth of public access to the Internet. The business-to-consumer category includes electronic shopping, information searching (e.g. railway timetables) but also interactive games delivered over the Internet. Popular items sold using B2C model are airline tickets, books, computers, videotapes, music CDs,toys ,music, health and beauty products, jewellery etc..
- 8. B2C e-commerce transactions VISA credit card is charged Order placed by user Shopping cart Order Order is form competed Shipping carrier picks up shipment Sent to warehouse E-mail is sent to customer to
- 9. Capabilities and functionalities of B2C Model With the conduction of business on the internet ,the role and importance of electronic markets has been increasing. It lets increase the efficiency of business performance . Some of the capabilities which an electronic marketplace has, which speak of their potential are- 1. Instantaneous communication It helps in quick communication between the various participants of business systems. It also helps to reduce “Time to Market”. 2. Global Access the products and services offered through the electronic markets have global reach and give access to larger and new markets.
- 10. 3. Customization Electronic markets allows to customize or configure goods according to user’s need . 4. Increased Availability Since e-commerce provide access to company’s site 24/7 so there is much greater availability of products. 5. De-intermediation It helps in elimination the middleman, offering simplified electronic distribution and product differentiation based on customer choice. 6. Collaboration They facilitate automation of transactions between electronic enterprises and support real time exchange of information and thus enable collaborative processing.
- 11. Manufacturer Model - Selling Direct The manufacturer or "direct model", it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency, improved customer service, and a better understanding of customer preferences.
- 14. ADVANTAGES: Potential to earn an unlimited amount of money Be your own boss Initial cost is fairly cheap Can receive start-up materials for a few hundred dollars or less Opportunities to meet new people Help you build confidence and become more outgoing You can lower your commuting costs Can use the internet to increase your sales E-mail potential customers
- 15. DISADVANTAGES: Promoting this type of business can be very time consuming This type of business is highly competitive Unpredictable source of income
- 17. What Electronic Payment system is? Electronic payment system is a system which helps the customer or user to make online payment for their shopping. To transfer money over the Internet. Methods of traditional payment. oCheck, credit card, or cash. Methods of electronic payment. oElectronic cash, software wallets, smart cards, and credit/debit cards.
- 18. OBJECTIVES 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.
- 19. Some Examples Of EPS:- Online reservation Online bill payment Online order placing Online ticket booking ( Movie)
- 20. Two storage methods On-line Individual does not have possession personally of electronic cash Trusted third party, e.g. online bank, holds customers’ cash accounts Off-line Customer holds cash on smart card or software wallet Fraud and double spending require tamper-proof encryption
- 21. E- CASH E- WALLETS EFT (Electronic Fund Transfer) Types of EPS SMART CARDS CREDIT CARDS
- 22. E-Cash A system that allows a person to pay for goods or services by transmitting a number from one computer to another. Like the serial numbers on real currency notes, the E-cash numbers are unique. This is issued by a bank and represents a specified sum of real money. It is anonymous and reusable.
- 23. Electronic Cash Security Complex cryptographic algorithms prevent double spending Anonymity is preserved unless double spending is attempted Serial numbers can allow tracing to prevent money laundering
- 24. E-Cash Processing Merchant 1. Consumer buys e-cash from Bank 2. Bank sends e-cash bits to consumer (after charging that amount plus fee) 5 4 3. Consumer sends e-cash to merchant Bank 3 4. Merchant checks with Bank that e-cash is valid (check for forgery or fraud) 2 5. Bank verifies that e-cash is valid 1 6. Parties complete transaction Consumer
- 25. E-Wallet The E-wallet is another payment scheme that operates like a carrier of e-cash and other information. The aim is to give shoppers a single, simple, and secure way of carrying currency electronically. Trust is the basis of the e-wallet as a form of electronic payment.
- 26. Procedure for using an e-wallet 1. Decide on an online site where you would like to shop. 2. Download a wallet from the merchant’s website. 3. Fill out personal information such as your credit card number, name, address and phone number, and where merchandise should be shipped. 4. When you are ready to buy, click on the wallet button, the buying process is fully executed.
- 27. Smart Cards A smart card, is any pocket-sized card with embedded integrated circuits which can process data A smart card is about the size of a credit card, made of a plastic with an embedded microprocessor chip that holds important financial and personal information. This implies that it can receive input which is processed and delivered as an output
- 28. Smart card Processing :
- 29. Advantages of smart cards Stored many types of information Not easily duplicated Not occupy much space Portable Low cost to issuers and users Included high security
- 30. Disadvantages of smart cards The lack of universal standards for their design and utilization. On the other hand, smart card applications are expected to increase as a result of the resolution of these disadvantages in the near future.
- 31. Credit cards It is a Plastic Card having a Magnetic Number and code on it. It has Some fixed amount to spend. Customer has to repay the spend amount after sometime.
- 32. Processing a Credit cards payment
- 33. Risk in using Credit cards Operational Risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Credit Risk Credit risk refers to the risk that a borrower will default on any type of debt by failing to make payments which it is obligated to do . The risk is primarily that of the lender and include lost principal and interest, disruption to cash flows, and increased collection costs. Legal Risk Legal risk is a type of risks that means that a counterparty is not legally able to enter into a contract.
- 34. EFT(Electronic Fund Transfer) Electronic funds transfer is one of the oldest electronic payment systems. EFT is the groundwork of the cash-less and check- less culture where and paper bills, checks, envelopes, stamps are eliminated. EFT is used for transferring money from one bank account directly to another without any paper money changing hands.
- 35. Advantages of EFT contain the following: Simplified accounting Improved efficiency Reduced administrative costs Improved security
- 36. Online Banking Types of Transactions: You may access certain account(s) you maintain with us by computer using your assigned user ID and password by accessing the online banking services. You may use the online banking service to perform the following functions: Transfer funds between eligible accounts. Obtain balance information on eligible accounts. Review transactions on eligible accounts. Make loan payments.
- 37. Risks in Electronic Payment Systems: Tax Evasion Businesses are required by law to provide records of their financial transactions to the government so that their tax compliance can be verified. Electronic payment however can frustrate the efforts of tax collection. Unless a business discloses the various electronic payments it has made or received over the tax period, the government may not know the truth, which could cause tax evasion.
- 38. Risks in Electronic Payment Systems: Fraud Electronic payment systems are prone to fraud. The payment is done usually after keying in a password and sometimes answering security questions. There is no way of verifying the true identity of the maker of the transaction. As long as the password and security questions are correct, the system assumes you are the right person. If this information falls into the possession of fraudsters, then they can defraud you of your money.
- 39. Risks in Electronic Payment Systems: Impulse Buying Electronic payment systems encourage impulse buying, especially online. You are likely to make a decision to purchase an item you find on sale online, even though you had not planned to buy it, just because it will cost you just a click to buy it through your credit card. Impulse buying leads to disorganized budgets and is one of the disadvantages of electronic payment systems.
- 40. Risks in Electronic Payment Systems: Payment Conflict Payment conflicts often arise because the payments are not done manually but by an automated system that can cause errors. This is especially common when payment is done on a regular basis to many recipients. If you do not check your pay slip at the end of every pay period, for instance, then you might end up with a conflict due to these technical glitches, or anomalies.
- 41. Secure Electronic Transaction (SET) Protocol Jointly designed by MasterCard and Visa with backing of Microsoft, Netscape, IBM, GTE, SAIC, and others Designed to provide security for card payments as they travel on the Internet Contrasted with Secure Socket Layers (SSL) protocol, SET validates consumers and merchants in addition to providing secure transmission SET specification Uses public key cryptography and digital certificates for validating both consumers and merchants Provides privacy, data integrity, user and merchant authentication, and consumer nonrepudiation
- 42. Cryptography
- 43. The SET protocol
- 44. Security Requirements of EPS Integrity Privacy Safety Authentication
- 45. What Is payment Gateways?? A payment gateway is an e-commerce application service provider service that authorizes payments for e-businesses, online Shopping, etc. Payment gateway protects credit cards details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor.
- 46. CONCLUSION Expand Market beyond Traditional geographic market Override traditional marketing system into digital marketing system. Made human life convenient as a person can pay his payments online while he is taking rest.