ELECTRONIC PAYMENT SYSTEMS LEARNING UNIT 7 ELECTRONIC PAYMENT SYSTEMS

LEARNING UNIT OUTCOMES Understand the common electronic payment systems used in electronic commerce

INTRODUCTION An E-Commerce business that is enabled to accept electronic payments, particularly credit and debit card payments, offer customers convenience and simplify the purchasing cycle Surveys show that it will soon overtake cash and cheques as the preferred method of payment

COMMON ELECTRONIC PAYMENT SYSTEMS Electronic money is a digital equivalent of cash, stored on an electronic device or remotely at a server. One common type of e-money is the 'electronic purse', where users store relatively small amounts of money on their payment card or other smart card, to use for making small payments ATM’s DEBIT AND CREDIT CARDS EFT (Electronic funds transfer) Direct deposit

Alternative Systems Electronic or digital money – system of debits and credits to exchange value. Can do it online or offline. Electronic currency – e-gold, non-gold, eee-currency Paypal or e-bullion

VIRTUAL DEBIT CARDS Various companies now sell VISA, Mastercard or Maestro debit cards, which can be recharged via electronic money systems This system has the advantage of being anonymous and more secure since the client can never be debited with more than the value of his/her prepaid card Also useful for people living in countries where international money transfers are not authorised or that do not have bank account Cards are recharged by way of a wire-transfer

ADVANTAGES OF ELECTRONIC PAYMENTS SPEED CONVENIENCE EFFICIENCY REDUCED COSTS INCREASED CUSTOMER BASE

DISADVANTAGES OF ELECTRONIC PAYMENT SYSTEMS FRAUD FAILURE OF TECHNOLOGY TRACKING OF INDIVIDUALS LOSS OF HUMAN CONTACT/INTERACTION

ICE In your opinion shortly discuss: Do you think that electronic money is likely to replace physical money (CASH) in South Africa? (5) Name three online card payment companies (3) Name one online payment platform that is used widely on the internet. (1) 4. Name one advantage of electronic payments (1)