Electronic Payment System

 

                                                                                   

What Is an Electronic Payment System?

·        Electronic payment systems are also known as e-payment systems and online payment systems.

·        An e-payment system is a way of making transactions or paying for goods and services through an electronic medium, without the use of checks or cash.

·        Electronic payments allow customers to pay for products or services electronically. 

·        Electronic Payment is a financial exchange that takes place online between buyers and sellers.

Types of Payment System

1. Digital Cash.
2. Electric Cheque.
3. Smart Card.
4. Credit Card.
5. Debit Card.
6. E-Money.
7. Bit coins.
8. Crypto Currency.
9. Electronic Fund Transfer (EFT).
10. UPI.
11. IMPS.

 

   1. Digital Cash

·         It is a new concept of online payment system. Digital Cash is a digital money product that provides a way to pay for products and service without resorting to the use of paper.

·         Digital Cash acts much like real cash, except that it’s not on paper.  Money in your bank account is converted to a digital code.  This digital code may then be stored on a microchip, a pocket card (like a smart card), or on the hard drive of your computer.

·       

2. Electronic Check

·        An electronic check is a form of payment made via the internet that is designed to perform the same function as a conventional paper check.

·        One of the more frequently used versions of the electronic check is the direct deposit system offered by many employers.

·        Generally, the costs associated with issuing an electronic check are notably lower than those associated with paper checks.

·        An electronic check has more security features than standard paper checks.

3. Smart Card

Smart card is again similar to a credit card or a debit card in appearance, but it has a small microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or personal information.

 

Smart cards are also used to store money and the amount gets deducted after every transaction.

Smart cards are secure, as they store information in encrypted format and are less expensive/provide faster processing.

4. Credit Card

Payment using credit card is one of most common mode of electronic payment. Credit card is small plastic card with a unique number attached with an account.

 It has also a magnetic strip embedded in it which is used to read credit card via card readers.

When a customer purchases a product via credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time period after which he/she can pay the credit card bill.

 

 

 5. Debit Card

Debit card, like credit card, is a small plastic card with a unique number mapped with the bank account number.

It is required to have a bank account before getting a debit card from the bank.

 

6. E-Money

• Electronic money is currency that is stored in banking computer systems.
• Various companies allow for transactions to be made with electronic money, such as Square or PayPal.

 

7. Bit coin

·         Bit coin is a digital currency that was created in January 2009.

·          The identity of the person or persons who created the technology is still a mystery. Bit coin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority.

8. Crypto Currency

·        A crypto currency is a digital  currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.

9. Electronic Fund Transfer

It is a very popular electronic payment method to transfer money from one bank account to another bank account without any paper money changing hands. Accounts can be in the same bank or different banks. Fund transfer can be done using ATM (Automated Teller Machine) or using a computer.

10 .Unified Payment Interface (UPI)

A Unified Payment Interface (UPI) is a Smartphone application that allows users to transfer money between bank accounts.

It is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI). 

11. Immediate Payment Service (IMPS):

·        Immediate Payment Service (IMPS) is an instant real-time interbank electronic funds transfer system in India.

·         IMPS offer an inter-bank electronic fund transfer service through mobile phones available 24×7, throughout the year including Sundays and bank holidays.

Download PDF