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Chapter 8 Payment Systems: Getting the Money. Awad –Electronic Commerce 1/e © 2002 Prentice Hall 2 OBJECTIVES Brief History of Money Features of Real-World.

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Presentation on theme: "Chapter 8 Payment Systems: Getting the Money. Awad –Electronic Commerce 1/e © 2002 Prentice Hall 2 OBJECTIVES Brief History of Money Features of Real-World."— Presentation transcript:

1 Chapter 8 Payment Systems: Getting the Money

2 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 2 OBJECTIVES Brief History of Money Features of Real-World Cash Electronic Money Internet-based Systems Electronic Payment Media Issues & Implications Payment Systems: Objectives

3 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 3 BRIEF HISTORY OF MONEY Barter Medium of Exchange –Tokens –Notational Money –Credit System Internet Service Providers: Brief History of Money

4 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 4 FEATURES OF REAL WORLD CASH Convenience Wide Acceptance Anonymity No Hidden Cost of Use No Audit Trail Internet Service Providers: Features of Real World Cash

5 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 5 ELECTRONIC MONEY (E-Money) Identified & Online (+I+L) –Credit cards & debit cards Identified & Offline (+I-L) –Check Anonymous & Online (-I+L) –Cash payments Anonymous & Offline (-I-L) –Electronic cash Internet Service Providers: Electronic Money

6 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 6 ACID TEST Atomicity Consistency Isolation Durability Internet Service Providers: Electronic Money

7 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 7 ICES TEST Interoperability Conservation Economy Scalability Internet Service Providers: Electronic Money

8 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 8 TRANSACTION PROPERTIES Internet Service Providers: Electronic Money TokenAtomicityConsistencyIsolationDurabilityInteroperabilityConservationEconomyScalability CashYYYYYYNYY CheckNYYNYNYNY Credit CardNNYNYN-NY

9 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 9 INTERNET-BASED PAYMENTS Electronic Cash Credit Cards Debit Cards Smart Cards Internet Service Providers: Internet-Based Payments

10 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 10 NON-TECHNICAL PROPERTIES Acceptability Ease of Integration Customer Base Ease of Use & Access Internet Service Providers: Internet-Based Payments

11 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 11 ELECTRONIC TRANSACTION SYSTEMS CyberCash Netbill First Virtual Internet Service Providers: Internet-Based Payments

12 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 12 SECURE ELECTRONIC TRANSACTIONS (SET) Confidentiality Integrity Authentication Interoperability Internet Service Providers: Internet-Based Payments

13 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 13 ELECTRONIC PAYMENT MEDIA Trusted Third Party Notational Fund Transfer-related Type Digital Cash/ Electronic Money Internet Service Providers: Electronic Payment Media

14 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 14 CREDIT CARDS Shopping Cart Credit Card Processing Services Risks of Using Credit Cards Credit Card Laundering Internet Service Providers: Electronic Payment Media

15 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 15 DEBIT CARDS Convenience Widely Accepted Easy Application No Grace Payment Period Less Protection for Undelivered Items Risks for Merchants - Overspent Customers Internet Service Providers: Electronic Payment Media

16 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 16 SMART CARDS Provide users the ability to make a purchase Hold users cash, ID information & keys Provide authentication of transaction Contain encryption & decryption of messages Enhance data portability Similar to electronic purse Internet Service Providers: Electronic Payment Media

17 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 17 DIGICASH & E-WALLET No audit trail Offers true digital economy Resistance from the Treasury Department E-wallet –A carrier of e-cash –A simple & secure way of carrying currency electronically Internet Service Providers: Electronic Payment Media

18 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 18 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 Internet Service Providers: Electronic Payment Media

19 Awad –Electronic Commerce 1/e © 2002 Prentice Hall 19 ISSUES & IMPLICATIONS Consumer Needs Corporate Processes Corporate Strategy Regulation of Competition Economics & Social Processes Internet Service Providers: Issues & Implications

20 Chapter 8 Payment Systems: Getting the Money


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