nitesh mundra

8/13/2019 Nitesh mundra

1/15

Dezyne ECole

College106/10, Civil Lines, Ajmer.

ELECTRONIC COMMERCE

Submitted To: Submitted By:

Name: Nitesh Mundra

BCA 3rd

Year


2/15

I ntroduction Of Electronic Commerce

Electronic commerce is a modern business methodology that addresses the needs of

organization, merchants, and consumers to improving the quality of goods and services and

increasing the speed of service delivery.

E-commerce is associated with:-

The buying and selling of information,

Products,

And services

Via computer network.

Elements of electronic commerce

Compute

Personal

Digital assistant

Telephone

Televisio

Printer

Network

Internet

Information

Delivery

Infrastructure

Video

servers

Government

servers

Game

servers

Corporate

servers

Electronic

publishing

Libraries

Chatlines

Software

li

i


3/15

H istory of E-commerce:-

1. In 1970EFT (Electronic fund transfer) incorporated into the banks to fund transfer.2. Form 1972to1980increases the properly e-commerce in cooperated sector. These sector

included the fallowing services :-

Electronic messaging technology,

Electronic data Interchange,

E-mail.

3. From1982to 1990the electronic messaging technology becomes a vital part of informationin group computing system.

4. In mid of 1980e-commerce technique is used by consumers, and that time online servicesstarted.

5. In 1990the introduction of World Wide Web over the internet, that was a revolution arylchange in the e-commerce era.

What is E Payment

E payment is a subset of an e-commerce transaction to include electronic payment for

buying and selling goods or services offered through the Internet. Generally we think of

electronic payments as referring to online transactions on the internet, there areactually many forms of electronic payments.

How will buyers pay for goods and services?

What currency will serve as the medium of exchange in this new market place?


4/15

Everyone agrees that payment and settlement process is a potential bottleneck in the fast

moving electronics commerce environment if we rely on conventional payment methods such

as cash , checks, bank draft or bills of exchange, electronic replicas of these conventional

instrument are not well suited for the speed required in e-commerce purchase processing.

To answer these questions, This section will briefly describe the pertinent

developments in various industries to provide an overall picture of electronic payment

systems.

Electronic Funds Transfer (EFT)

EFT is defined as any transfer of funds initiated through an electronic terminal,

telephonic instrument, or computer or magnetic tape so as to order, instruct, or authori ze a

financial institution to debit or credit an account.EFT utilizes computer and

telecommunication components both to supply and to transfer money or f inancial assets.

Work on EFT can be segmented into three broad categories:

1. Banking and financial payments large-scale or wholesale payments(e.g., bank-to-bank transfer)

Small-scale or retail payments(e.g., automated teller machines and cash dispensers) Home banking(e.g., bill payment)2. Retailing payments Credit cards(e.g., VISA or MasterCard) Private label credit/debit cards(e.g., J.C. Penney Card) Charge cards(e.g., America Express)3. On-line electronic commerce payments Electronic cash(e.g., DigiCash) Electronic checks(e.g., NetCheque)

Smart cards or debit cards(e.g., Mondex Electronic Currency Card)

E cash

Electronic cash, also known as digital cash, i s a technology that uses vari ed electronic

methods to execute fi nancial transactions.The electronic cash technology is fast r eplacing

the physical cash i.e. bank notes and coins, in the day-to-day use, for smal l tr ansactions.

The electroni c cash is a very modern and fast developing technol ogy.Electronic cash (e-

cash) i s a new concept in on-l ine payment systems because it combines computer izedconveni ence with secur ity and pr ivacy.


5/15

How it is used:

Ecash is used over the Internet, email, or personal computer to other workstations in the form

of secured payments of "cash" that is virtually untraceable to the user. It is backed by real

currency from real banks.

The way ecash works is similar to that of electronic fund transfers done between banks. The

user first must have an ecash software program and an ecash bank account from which ecash

can be withdrawn or deposited. The user withdraws the ecash from the account onto her

computer and spends it in the Internet without being traced or having personal information

available to other parties that are involved in the process. The recipients of the ecash send the

money to their bank account as with depositing "real" cash.


6/15

The technology is classif ied into two types, that is the onl ine form and the off li ne form.

1. ONLINE FORM : The online form of electronic cash involves conducting transactionsthrough the Internet, means we need to interact with a bank (via a network) to conduct a

transaction with a third party.

ONLINE FORM

2. OFFLINE FORM : The offline form involves the usage of the digitally encoded smartcards, like the ATM cards or even credit cards. Offline means we can conduct a transaction

without having to directly involve a bank.

OFFLINE FORM


7/15

PROS OF ECASH

The online electronic cash systems that are operated through the Internet, provideconvenience to the user and the banker.

The online system can be accessed through the Internet from anywhere in the world. Hence,the user does not have to actually go to the bank to transact any business.

The online system also provides convenience to the banker, as he does not have to deal withlong line of people. This increases the speed of transactions in financial organizations. This

advantage is supplemented by very good accuracy as the transactions are done with the help

of machines and computers. The manual labor, involving the cashier, security and other bank

staff is reduced.

The small-scale and the local level merchants can also access and transact in the globalmarket. This can be easily accomplished through the facility of online shopping.

Another advantage of online shopping is that the shopper can sit at home and purchase thegoods he wants, with the help of a credit card.

The 'smart' cards can also be restricted to specified payments. For example: the parents of astudent studying in a far-off university, can charge his smart card that can be used only for

paying tuition fees.

Another very good advantage of e-cash is that the transactions are all recorded in a database,so one does not have to keep wondering when and for what purpose one has spent money.

The concept of smart card also reduces the possibility of robbery. The smart cards forwithdrawal, like the ATM cards, are protected by passwords.

CONS OF ECASH

The system of electronic cash is extremely convenient, but it is not a foolproof system. Theonline electronic cash system has the same problems as your email account and personal

computer.


8/15

The online facility can be hacked or can also be infected with a virus, if sufficient security isnot provided. Some of the disadvantages of electronic cash, include serious misuse of a stolen

smart card.

Criminals who have strong knowledge of the technology of these systems can easily misuseit, if a reliable security system is not deployed. The phenomena of identity protection and

credit history play a very important role in the working of the e-cash system. To safeguard

the interests of the users, protection against identity theft has become the most important

function of these service providers.

Electronic Cheque

Electronic cheque are another form of on l ine payment system. They are designed to

accommodate the many individuals and enti ties that might prefer to pay on credit or

thr ough some mechanism other than cash.

In the model shown in buyers must register with a third-party account server before they are

able to write electronic checks. The account server also acts as a billing service. The

registration procedure can vary depending on the particular account server and may require

accredit card or a bank account to back the checks.

Once registered, a buyer can then contact seller of goods and services. To

complete a transaction, the buyer sends a check to the seller for a certain amount of money.

These cheque may be sent using e-mail or other transport methods. When deposited, the

cheque authorizes the transfer of account balances from the account against which the cheque

was drawn to the account to which the cheque was deposited.

Payer Pa ee

Transfer di ital cash

Issue Check for double spending

Database of spent

notesBank Digital Currency

Server


9/15

Marits of Electronic cheque:

They work in the same way as traditional checks, thus simplifying customer education. Electronic checks are well suited for clearing micropayments; their use of conventional

cryptography makes it much faster than systems based on public-key cryptography makes it

much faster than systems based on public-key cryptography(e-cash).

The third-party accounting server can make money by charging the buyer or seller atransaction fee or a flat rate fee, or it can act as a bank and provide deposit accounts and make

money on the deposit account pool.

Reliability and scalability are provided by using multiple accounting servers. There can be aninteraccount server protocol to allow buyer and seller to belong to different domains,

regions, or countries.

Demarits of E-cheque:

E-checks can be processed accessed using specific equipment that a set for fromfinancial institutions who offer this directly defend on the size of institution.

Unauthorized transactions can give us a great pain, in case of any information breach, somaintaining paper check records is even hectic , but has to be done for surety.

Since the transactions are dependent on networking, any fault in it will

Delay the transfer. This means that for successful transfer to take place, the system has to be

working all the time.

ELECTRONIC CARDS

Credit cards, debit cards and prepaid cards currentl y represent the most common f orm of

electroni c payments. For all 3 types of cards the consumer or the business most often uses

a plastic card, commonly with a magnetic str ipe. The cardholder gives hi s or her card or

card number to a merchant who swipes the card through a terminal or enters the data to a

PC. The terminal transmits data to his or her bank , the acqui rer. The acqui rer tr ansmits

the data through a card association to the card issuer who makes a decision on the

transaction and relays it back to the merchant, who gives goods or services to the

cardholder. Funds fl ow later for settlement with credit cards and are debited immediately

for debit or pre-paid cards.


10/15

Internet

Online payments involve the customer transferring money or making a purchase online via

the internet. Consumers and businesses can transfer money to third parties from the bank or

other account, and they can also use credit, debit and prepaid cards to make purchases

online.

smart card

A smart card, chip card, or integrated circuit card (ICC) is any pocket-sized card with

embeddedintegrated circuits.Smart cards are made of plastic, Since April 2009, a Japanesecompany has manufactured reusable financial smart cards made from paper.

Smart cards can provideidentification,authentication, data storage and application

processing. Smart cards may provide strong securityauthentication forsingle sign-on(SSO)

within large organizations,

used for telephone calling, electronic cash payments, and other applications, and then

periodically refreshed for additional use. Currently or soon, you may be able to use a smart

card to:

Dial a connection on a mobile telephone and be charged on a per-call basis Establish your identity when logging on to an Internet access provider or to an online bank Pay for parking at parking meters or to get on subways, trains, or buses Give hospitals or doctors personal data without filling out a form Make small purchases at electronic stores on the Web (a kind of cybercash) Buy gasoline at a gasoline station

Over a bil li on smart cards are already in use. Currentl y, Europe is the region where they

are most used. Ovum, a research fi rm, predicts that 2.7 bil li on smart cards wil l be shipped

annual ly by 2003. Another study forecasts a $26.5 bil li on market for recharging smart

cards by 2005. Compaq and Hewlett-Packard are reportedly work ing on keyboards that

include smart card slots that can be read like bank credit cards. The hardware for makingthe cards and the devices that can r ead them is cur rentl y made pri ncipally by Bul l ,

Gemplus, and Schlumberger.
http://en.wikipedia.org/wiki/Integrated_circuithttp://en.wikipedia.org/wiki/Identity_documenthttp://en.wikipedia.org/wiki/Authenticationhttp://en.wikipedia.org/wiki/Authenticationhttp://en.wikipedia.org/wiki/Single_sign-onhttp://en.wikipedia.org/wiki/Single_sign-onhttp://en.wikipedia.org/wiki/Authenticationhttp://en.wikipedia.org/wiki/Authenticationhttp://en.wikipedia.org/wiki/Identity_documenthttp://en.wikipedia.org/wiki/Integrated_circuit


11/15

How Smart Cards Work

A smart card contains more information than a magnetic stripe card and it can be programmed for

different applications. Some cards can contain programming and data to support multiple applicationsand some can be updated to add new applications after they are issued. Smart cards can be designed to

be inserted into a slot and read by a special reader or to be read at a distance, such as at a toll booth.

Cards can be disposable (as at a trade-show) or reloadable (for most applications).

An industry standard interface between programming and PC hardware in a smart card has

been defined by the PC/SC Working Group, representing Microsoft, IBM, Bull,

Schlumberger, and other interested companies. Another standard is called OpenCard. There

are two leading smart card operating systems: JavaCard andMULTOS.

Definition of 'Debit Card'

An electronic card issued by a bank which allows bank clients access to their account to

withdraw cash or pay for goods and services. This removes the need for bank clients to go to

the bank to remove cash from their account as they can now just go to an ATM or pay

electronically at merchant locations. This type of card, as a form of payment, also removes

the need for checks as the debit card immediately transfers money from the client's account to

the business account.

MANY DEBIT CARDS ARE OF THEVI SA ORMASTERCARD BRAND, THERE ARE

MANY OTHER TYPES OF DEB IT CARD, EACH ACCEPTED ONLY WITH IN A

PARTICULAR COUNTRY OR REGION,

FOR EXAMPLE

Switch(now: Maestro) andSolo in the United Kingdom, Interac in Canada, Carte Bleue in France, Laser in Ireland, UnionPay in China, RuPay in India and EFTPOS cards in Australia and New Zealand etc.
http://whatis.techtarget.com/definition/MULTOS-Multiple-Operating-Systemhttp://whatis.techtarget.com/definition/MULTOS-Multiple-Operating-Systemhttp://whatis.techtarget.com/definition/MULTOS-Multiple-Operating-Systemhttp://en.wikipedia.org/wiki/Visa_Inc.http://en.wikipedia.org/wiki/MasterCardhttp://en.wikipedia.org/wiki/Switch_(debit_card)http://en.wikipedia.org/wiki/Solo_(debit_card)http://en.wikipedia.org/wiki/Interachttp://en.wikipedia.org/wiki/Carte_Bleuehttp://en.wikipedia.org/wiki/Laser_(debit_card)http://en.wikipedia.org/wiki/UnionPayhttp://en.wikipedia.org/wiki/RuPayhttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/RuPayhttp://en.wikipedia.org/wiki/UnionPayhttp://en.wikipedia.org/wiki/Laser_(debit_card)http://en.wikipedia.org/wiki/Carte_Bleuehttp://en.wikipedia.org/wiki/Interachttp://en.wikipedia.org/wiki/Solo_(debit_card)http://en.wikipedia.org/wiki/Switch_(debit_card)http://en.wikipedia.org/wiki/MasterCardhttp://en.wikipedia.org/wiki/Visa_Inc.http://whatis.techtarget.com/definition/MULTOS-Multiple-Operating-System


12/15

Pros of Using a Debit Card or smart card:

1. Convenience: You don't have to carry just the right amount of cash, write out a paper

check and enter it into a register, or make a credit card payment at a later date.

2. It takes less time to complete a purchase:Debit cards are accepted by merchants with

less scrutiny than are checks or credit cards. And swiping a card is much faster than writing

out a check.

3. It keeps you within budget:When you use a debit card you're limited to spending the

amount of money you have in the associated account. This prevents you from accumulating

debt or being charged interest and those annoying late fees from a credit cardcompany. Quick Tip:opting out of overdraft coverage and enrolling in a linked acount

ensures that youdon't overspend and avoid hefty fees.

4. They're easier to get than a credit card:Most bank checking andsavings accounts offer

you the option to have a debit card linked to your account, without having to complete a

lengthy application.

5. You can easily get cash:You can opt for "cash back" at most stores or use your debit card

as an ATM card at cash machines.

Cons of Using a Debit Card or smart card:

1. Disputed charges can be more difficult to resolve:Since money was spent out of your

account at the moment of purchase, you have more risk with a debit card than with a credit

card if the item is defective, misrepresented, or never gets delivered to you.

2. Some banks may charge you extra fees:There could be monthly service charges,over-

limit fees,per transaction costs, or penalties for dropping below a minimum required balance

that result from using a debit card.

3. You don't improve your credit score:Building up your credit score is an important

consideration for your financial future. Paying bills, such as credit card payments, on time is

the most effective way to increase your rating or to maintain a high credit score.

4. You can't take advantage of reward points: One of my favorite reasons for using acredit card when making any large purchase is the opportunity to get travel reward points.
http://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspxhttp://moneygirl.quickanddirtytips.com/how-to-save-money.aspxhttp://moneygirl.quickanddirtytips.com/highest-interest-rates.aspxhttp://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspxhttp://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspxhttp://moneygirl.quickanddirtytips.com/raise-credit-score-fast.aspxhttp://moneygirl.quickanddirtytips.com/raise-credit-score-fast.aspxhttp://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspxhttp://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspxhttp://moneygirl.quickanddirtytips.com/highest-interest-rates.aspxhttp://moneygirl.quickanddirtytips.com/how-to-save-money.aspxhttp://moneygirl.quickanddirtytips.com/should-you-opt-for-overdraft-coverage.aspx


13/15

There are many different types of cards that offer a variety of great incentives, and I have an

entireepisode devoted to rewards credit cards to prove it.

5. It gives you lower levels offraud protection:If a thief gets your Personal Identification

Number, they could easily empty your bank account. Fraud certainly happens with credit card

use as well. However, most credit card companies put a hold an any account that shows

unusual activity.

The Uni ted States Federal Trade Commission establ ished two acts to address the

issue of lost or stolen cards. The FTC website address isftc.gov.TheFederal Reserve

Board also has information aboutcredit protection laws on their site

atfederalr eserve.gov.

CREDIT CARD

A credit card is apayment card issued to users as a system ofpayment.It allows the

cardholder to pay for goods and services based on the holder's promise to pay for them.[1]The

issuer of the card creates arevolving account and grants aline of credit to theconsumer (or

the user) from which the user can borrow money for payment to amerchant or as acash

advance to the user.
http://moneygirl.quickanddirtytips.com/what-are-the-best-rewards-credit-cards.aspxhttp://moneygirl.quickanddirtytips.com/identity-theft.aspx?commentid=21315http://ftc.gov/http://ftc.gov/http://federalreserve.gov/http://federalreserve.gov/http://www.federalreserve.gov/pubs/consumerhdbk/electronic.htm#lawhttp://federalreserve.gov/http://federalreserve.gov/http://en.wikipedia.org/wiki/Payment_cardhttp://en.wikipedia.org/wiki/Paymenthttp://en.wikipedia.org/wiki/Credit_card#cite_note-1http://en.wikipedia.org/wiki/Credit_card#cite_note-1http://en.wikipedia.org/wiki/Credit_card#cite_note-1http://en.wikipedia.org/wiki/Revolving_accounthttp://en.wikipedia.org/wiki/Line_of_credithttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Merchanthttp://en.wikipedia.org/wiki/Cash_advancehttp://en.wikipedia.org/wiki/Cash_advancehttp://en.wikipedia.org/wiki/Cash_advancehttp://en.wikipedia.org/wiki/Cash_advancehttp://en.wikipedia.org/wiki/Merchanthttp://en.wikipedia.org/wiki/Consumerhttp://en.wikipedia.org/wiki/Line_of_credithttp://en.wikipedia.org/wiki/Revolving_accounthttp://en.wikipedia.org/wiki/Credit_card#cite_note-1http://en.wikipedia.org/wiki/Paymenthttp://en.wikipedia.org/wiki/Payment_cardhttp://federalreserve.gov/http://www.federalreserve.gov/pubs/consumerhdbk/electronic.htm#lawhttp://federalreserve.gov/http://federalreserve.gov/http://ftc.gov/http://ftc.gov/http://moneygirl.quickanddirtytips.com/identity-theft.aspx?commentid=21315http://moneygirl.quickanddirtytips.com/what-are-the-best-rewards-credit-cards.aspx


14/15

A credit card is different from acharge card:a charge card requires the balance to be paid in

full each month.[2]In contrast, credit cards allow the consumers a continuing balance of debt,

subject tointerestbeing charged. A credit card also differs from acash card,which can be

used like currency by the owner of the card. A credit card differs from a charge card also in

that a credit card typically involves a third-party entity that pays the seller and is reimbursed

by the buyer, whereas a charge card simply defers payment by the buyer until a later date.

Pros

You can use them practically everywhere, especially overseas. They can boost your purchasing power because they can be used to buy goods and services

over the phone, through the mail and online.

They provide financial backup in the event of an emergency, such as an unexpectedhealthcare cost, job loss or auto repair.

They allow you to purchase items and pay them off in monthly installments. They offerdiscounts at stores and rewards. For instance, when you make purchases using the credit card

you can collect points; these points accumulate and can be used to get free items, such as

airline tickets.

Some cards may offer cash back as an incentive to use the card. They can help build yourcredit history. They keep a record of your expenses, helping you to monitor your financial activities. They help raise your credit score, such as theFICO credit score,when you pay balances

down by the due date. This improved credit history paves the way for lower rates borrowing

rates on other loans, including a mortgage.

Credit cards allow you the right to dispute billing errors and defective merchandise. They allow you withhold payments.

Cons

Credit cards can have their disadvantages, though, especially when they're used in an unwisemanner.

Some consumers feel compelled to spend more money than they have. Consumers may continuously roll over a balance for several months. When youdefaulton credit card payments, you are charged with late fees and interest,

increasing your debt load.

Carrying a large amount of credit cards also isn't too favorable in the eyes of lenders. Acquiring too much credit card debt can ruin your credit score. Studies have indicated credit card debt as a significant factor in consumer bankruptcies. Credit card fraud is a possibility
http://en.wikipedia.org/wiki/Charge_cardhttp://en.wikipedia.org/wiki/Credit_card#cite_note-2http://en.wikipedia.org/wiki/Credit_card#cite_note-2http://en.wikipedia.org/wiki/Credit_card#cite_note-2http://en.wikipedia.org/wiki/Credit_card_interesthttp://en.wikipedia.org/wiki/Cash_cardhttp://www.investopedia.com/terms/c/credit-history.asphttp://www.investopedia.com/terms/c/credit-history.asphttp://www.investopedia.com/terms/f/ficoscore.asphttp://www.investopedia.com/terms/f/ficoscore.asphttp://www.investopedia.com/terms/d/default2.asphttp://www.investopedia.com/terms/d/default2.asphttp://www.investopedia.com/terms/d/default2.asphttp://www.investopedia.com/terms/d/default2.asphttp://www.investopedia.com/terms/f/ficoscore.asphttp://www.investopedia.com/terms/c/credit-history.asphttp://en.wikipedia.org/wiki/Cash_cardhttp://en.wikipedia.org/wiki/Credit_card_interesthttp://en.wikipedia.org/wiki/Credit_card#cite_note-2http://en.wikipedia.org/wiki/Charge_card


15/15

Since its inception 30 years ago, MasterCard International has grown from a US-basedcredit card system into a leader in the multi-trillion dollar global payments industry,

with credit, debit and chip cards as core competencies. In 1997, 23,000 member

financial institutions recorded 6.5 billion transactions worth $602 billion through

MasterCard.

Electronic payment systems in India

Due to the efforts of the RBI and the BPSS [BASELINEPERSONNEL SECURITYSTANDARD]now over 75% of all transaction volume are in the electronic mode,

including both large-value and retail payments. Out of this 75%, 98% come from the

RTGS (Real time gross settlement,large-value payments) whereas a meagre 2% come

from retail payments. This means consumers have not yet accepted this as a regular

means of paying their bills and still prefer conventional methods. Retail payments if

made via electronic modes are done by ECS (debit and credit), EFT and card payments.

In India plastics havebeen fast over-taking papers. With 130 million cards in circulation

currently, both credit and debit, and an increasing consumer base with disposable income,

India is clearly one of the fastest growing countries for payment cards in the Asis-Pacific

region. Behaviourial patterns of Indian customers are also likely to be influenced by their

internet accessibility and usage, which currently is about 32 million PC users, 68% of whom

have access to the net. However these statistical indications are far from the reality where

customers still prefer to pay in line rather than online, with 63% payments still being made

in cash. E-payments have to be continuously promoted showing consumers the various routes

through which they can make these payments like ATMs, the internet, mobile phones and

drop boxes.

The Indian payments systems have however undergone a change with respect to methods of

payments, there now being card-based payments, Electronic Funds Transfers, ElectronicClearing Services and ways to pay via the mobile and internet. In India payments can be

divided in two ways- firstly, large-scale payments and small-scale payments and secondly,

paper-based and electronic. Most large-scale payments concern corporates or government

payments and are settled by the RBI. Small-scale payments are mainly retail payments

concerning individuals which are generally paper-based transactions. Most large-value

payments are handled electronically. However, even the retail payments are showing a

tendency of shifting to the e-payment mode, mainly because of consumer awareness and

regulations by the RB

nitesh mundra

Documents