Analysis of Electronic Payment Systems
Many of us have become accustomed to electronic payment systems. These systems will continue to increase as businesses and banks present more opportunities to use them.
Resource: Ch. 9 of Essentials of Management Information Systems Answer the following questions in 200 to 300 words: 1 . Name and describe various categories of e-commerce. The three main categories of e-commerce are: Business-to-consumer (B2C) electronic commerce involves retailing products and services to individual shoppers. BarnesandNoble. om, which sells books, software, nd music to individual consumers, is an example of B2C e-commerce.
Business-to-Business (82B) electronic commerce involves sales of goods and services among businesses. ChemConnect’s Web site for buying and selling chemicals and plastics is an example of 82B e-commerce. Consumer-to-consumer (C2C) electronic commerce involves consumers selling directly to consumers. For example, Ebay, the giant Web auction site, enables people to sell their goods to other consumers by auctioning their merchandise off to the highest bidder, or for a fixed price.
Craigslist is the most widely used platform used by consumers to buy from and sell directly to others. Each of which has special characteristics that depend on the value of order. Micro Payment (less than $ 10) that is mainly conducted in C2C and B2C e-commerce. Consumer Payment that has a value between $ 10 and $ 500. It is conducted mainly in B2C transactions. Business Payment that has the value more than $ 500.
It is conducted mainly in 82B e- commerce. Three classes of typical electronic transactions: Tiny value transactions: below $1 .
Medium value transactions: between $ 1 and $ 1,000 Large value transactions: above $ 1,000. Systems that can support tiny value transactions have to trade-off between conveniences of transactions (the major part of a cost in an extremely cheap transaction) vs. the security or durability of transactions. On the other side of the amount range, large value transactions will require highly secure protocols whose implementations are costly: be on-line and/or carry traceability information.
Finally, nearly all the system can perform medium value transactions.
Another way of classifying electronic commerce transactions is by the platforms used n a transaction. Most e-commerce transactions took place using a personal computer connected to the Internet over wired networks, until recently. Now two and e-readers, such as Kindle using cellular networks, and smartphones and small tablet computers using Wi-Fi wireless networks. The use of handheld wireless devices for purchasing goods and services from any location is termed mobile commerce or m-commerce.
Both business-to-business and business-to-consumer e- commerce transactions can take place using m-commerce technology. 2. Compare and contrast electronic payment systems. Which type do you use most often? Which type is most applicable for organizations you interact with regularly? Electronic payment systems can be classified into four categories: Online Credit Card Payment System: This payment system has been widely accepted by consumers and merchants throughout the world, and by far the most popular methods of payments especially in the retail markets.
Credit card payment three basic categories: (1) payment using clean credit card details (2) payment using encrypted credit card details and (3) payment using third party verification. Online Electronic Cash System: Combines computerized convenience with security and privacy that improve on paper cash.
Its versatility opens up a host of new markets and applications. E-cash is an electronic or digital form of value storage and value exchange that have limited convertibility into other forms of value and require intermediaries to convert.
E-cash presents some characteristics like monetary value, storability and irretrievability, interoperability and security. Electronic Cheque System: The e-cheque method was created to work in much the same way as conventional paper cheque. An account holder will issue an electronic document that contains the name of the financial institution, the payer’s account number, the name of payee and amount of cheque.
Most of the information is in uncoded form. Like a paper cheques echeques also bear the digital equivalent of signature: a computed number that authenticates the cheque from the owner of the account.
The process of electronic chequing system steps: Step 1: a purchaser fills a purchase order form, attaches a payment advice (electronic cheque), signs it with his private key (using his signature hardware), attaches his ublic key certificate, encrypts it using his private key and sends it to the vendor. Step 2: the vendor decrypts the information using his private key, checks the purchaser’s certificates, signature and cheque, attaches his deposit slip, and endorses the deposit attaching his public key certificates. This is encrypted and sent to his bank.
Step 3: the vendor’s bank checks the signatures and certificates and sends the cheque for clearance. The banks and clearing houses normally have a private secure data network. Step 4: when the cheque is cleared, the amount is credited to the vendor’s account and a credit advice is sent to him. Step 5: the purchaser gets a consolidated debit advice periodically. plastic cards with the memory chips and in some cases, with microprocessors embedded in them so as to serve as storage devices for much greater information than credit cards34 with inbuilt transaction processing capability.
Some systems are quite similar, and differ only in some minor details. All these systems have ability or potential to displace cash and widely different technical specifications make it difficult to choose an appropriate payment system. The only electronic payment system I use these days is the Online Credit Card Payment System. Before debit cards I did use the Electronic Cheque System quite a bit to pay bills over the phone. Each payment system has its advantages and disadvantages for the customers and merchants.
I don’t keep a checkbook anymore though, Just my debit card. These payment systems have numbers of requirements; such as security, acceptability, convenience, cost, anonymity, control, and traceability. Therefore, instead of focusing on the technological specifications of various electronic payment systems, the researchers have distinguished electronic payment systems based on hat is being transmitted over the network; and analyze the difference of each electronic payment system by evaluating their requirements, characteristics and assess the applicability of each system. . Explain how Internet technology supports business-to-business e-commerce. As payment is an integral part of mercantile process, electronic payment system is an integral part of e-commerce.
The emergence of e-commerce has created new financial needs that in many cases cannot be effectively fulfilled by traditional payment systems. One of the technological innovations in banking, finance and ommerce is the Electronic Payments.
Electronic Payments (epayments) refers to the technological breakthrough that enables us to perform financial transactions electronically, thus avoiding long lines and other hassles. Electronic Payments provides greater freedom to individuals in paying their taxes, licenses, fees, fines and purchases at unconventional locations and at whichever time of the day,