Chapter 15 E-Payments: Getting the Money

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Chapter 15E-Payments Getting the Money
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OBJECTIVES

• Brief History of Money
• Features of Real-World Cash
• Electronic Money
• Internet-based Systems
• Electronic Payment Media
• Issues and Implications

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BRIEF HISTORY OF MONEY

• Barter
• Medium of Exchange
• Tokens
• Notational Money
• Credit System

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FEATURES OF REAL-WORLD CASH

• Convenience
• Wide Acceptance
• Anonymity
• No Hidden Cost of Use
• No Audit Trail

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ELECTRONIC MONEY (E-Money)

• Identified and Online (IL)
• Credit cards and debit cards
• Identified and Offline (I-L)
• Check
• Anonymous and Online (-IL)
• Cash payments
• Anonymous and Offline (-I-L)
• Electronic cash

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ACID TEST

• Atomicity
• Consistency
• Isolation
• Durability

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ICES TEST

• Interoperability
• Conservation
• Economy
• Scalability

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TRANSACTION PROPERTIES
Token Atomicity Consistency Isolation Durability Interoperability Conservation Economy Scalability
Cash Y Y Y Y Y Y N Y Y
Check N Y Y N Y N Y N Y
Credit Card N N Y N Y N - N Y
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INTERNET-BASED PAYMENTS

• Electronic Cash
• Credit Cards
• Debit Cards
• Smart Cards

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NONTECHNICAL PROPERTIES

• Acceptability
• Ease of Integration
• Customer Base
• Ease of Use and Access

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ELECTRONIC TRANSACTION SYSTEMS

• CyberCash
• Netbill
• First Virtual

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SECURE ELECTRONIC TRANSACTIONS (SET)

• Confidentiality
• Integrity
• Authentication
• Interoperability

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ELECTRONIC PAYMENT MEDIA

• Trusted Third Party
• Notational Fund Transfer-related Type
• Digital Cash/ Electronic Money

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CREDIT CARDS

• Shopping Cart
• Credit Card Processing Services
• Risks of Using Credit Cards
• Credit Card Laundering

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DEBIT CARDS

• Convenience
• Widely Accepted
• Easy Application
• No Grace Payment Period
• Less Protection for Undelivered Items
• Risks for Merchants - Overspent Customers

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SMART CARDS

• Provide users the ability to make a purchase
• Hold users cash, ID information and keys
• Provide authentication of transaction
• Contain encryption and decryption of messages
• Enhance data portability
• Similar to electronic purse

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DIGICASH E-WALLET

• No audit trail
• Offers true digital economy
• Resistance from the Treasury Department
• E-wallet
• A carrier of e-cash
• A simple and secure way of carrying currency
  electronically

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ELECTRONIC FUNDS TRANFER AUTOMATED CLEARING
HOUSE

• Electronic Funds Transfer (EFT)
• A computer-based system that facilitates the
  transfer of money between two financial
  institutions overnight
• Automated Clearing House (ACH)
• Involves more than one financial institution
  routing to debit and credit the correct accounts

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ISSUES IMPLICATIONS

• Consumer Needs
• Corporate Processes
• Corporate Strategy
• Regulation of Competition
• Economics Social Processes

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Chapter 15E-Payments Getting the Money