The%20Present%20and%20Future%20of%20Electronic%20Payment%20Systems

1
The Present and Future of Electronic Payment
Systems

• Vivek Reddy
• Vjreddy_at_scu.edu
• Information Assurance 5/19/04

2
Background

• Electronic Commerce and Business
• Characteristics of Current Systems
• Advantages and Disadvantages
• What the Future may hold

3
Classifying Payment Systems

• The way money is transfer and organized
• Electronic Cash vs. Credit Systems
• Token-based vs. Account Based

4
Further classification

• Electronic Money Online Cash and Smart Cards
• Account based Credit cards and E-mail based
  systems

5
Account Based Systems The Credit Card

• First step in the evolution to electronic payment
  systems
• Authentication Protocol
• PIN
• Security Features

6
Account Based Systems Email Based Systems

• Inherently insecure
• E-mail for notification and traditional banking
  to transfer funds
• Transaction-level Security SSL
• Authentication

7
Account Based Systems PayPal

• Generic account based system
• Works off of existing financial infrastructure
• Middle man for Credit transactions
• Uses SSL
• Not secure enough for large business transactions

8
Account Based Systems General

• SSL
• Secure Electronic Transaction(SET)
• SET is a better version of SSL

9
Account Based Systems The Good and Bad

• Ease of Use and Scalability
• Works on existing networks and terminals
• No need for creating new hardware
• No Anonymity like physical cash provides

10
Electronic Currencies Smart Cards

• Credit card with a brain
• Embedded computer chip that can store 100 to 200
  times more information
• Used extensively in Japan and Europe
• Card has a number representing money stored on it
• Compatible with electronic devices such as
  phones, PDAs, and Pcs

11
Electronic Currencies E-Cash

• European Central Bank Definition
• New sub-category of money

12
Electronic Currencies The Good and Bad

• Smart Cards are a large advancement over the
  system of credit cards
• E-Cash provides anonymity
• Large Database of past transactions need to be
  kept(double spending)
• Lack of scalability
• New learning curve for consumer
• Identifiable vs. Anonymous(blind signature)

13
Future of Electronic Payment Systems RFIds

• Radio barcodes embedded in goods
• Already used in retail outlets to know what is
  going in and out of stores
• Purchase items simply by walking through a
  terminal
• Security lacking
• Can they make it scalable?

14
Conclusion

• Account Systems provide ease of use and
  scalability
• Electronic currencies provide anonymity but have
  a lot of overhead
• Systems that are successful have a low learning
  curve