1. Chapter 8 Payment Systems: Getting the Money

2. OBJECTIVES Brief History of Money Features of Real-World Cash
Payment Systems: Objectives
OBJECTIVES
Brief History of Money
Features of Real-World Cash
Electronic Money
Internet-based Systems
Electronic Payment Media
Issues & Implications

3. BRIEF HISTORY OF MONEY Barter Medium of Exchange Tokens
Internet Service Providers: Brief History of Money
BRIEF HISTORY OF MONEY
Barter
Medium of Exchange
Tokens
Notational Money
Credit System

4. FEATURES OF REAL WORLD CASH
Internet Service Providers: Features of Real World Cash
FEATURES OF REAL WORLD CASH
Convenience
Wide Acceptance
Anonymity
No Hidden Cost of Use
No Audit Trail

5. ELECTRONIC MONEY (E-Money)
Internet Service Providers: Electronic Money
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

6. ACID TEST Atomicity Consistency Isolation Durability
Internet Service Providers: Electronic Money
ACID TEST
Atomicity
Consistency
Isolation
Durability

7. ICES TEST Interoperability Conservation Economy Scalability
Internet Service Providers: Electronic Money
ICES TEST
Interoperability
Conservation
Economy
Scalability

8. TRANSACTION PROPERTIES
Internet Service Providers: Electronic Money
TRANSACTION PROPERTIES
Token
Atomicity
Consistency
Isolation
Durability
Interoperability
Conservation
Economy
Scalability
Cash Y N
Check
Credit Card -

9. INTERNET-BASED PAYMENTS
Internet Service Providers: Internet-Based Payments
INTERNET-BASED PAYMENTS
Electronic Cash
Credit Cards
Debit Cards
Smart Cards

10. NON-TECHNICAL PROPERTIES
Internet Service Providers: Internet-Based Payments
NON-TECHNICAL PROPERTIES
Acceptability
Ease of Integration
Customer Base
Ease of Use & Access

11. ELECTRONIC TRANSACTION SYSTEMS
Internet Service Providers: Internet-Based Payments
ELECTRONIC TRANSACTION SYSTEMS
CyberCash
Netbill
First Virtual

12. SECURE ELECTRONIC TRANSACTIONS (SET)
Internet Service Providers: Internet-Based Payments
SECURE ELECTRONIC TRANSACTIONS (SET)
Confidentiality
Integrity
Authentication
Interoperability

13. ELECTRONIC PAYMENT MEDIA
Internet Service Providers: Electronic Payment Media
ELECTRONIC PAYMENT MEDIA
Trusted Third Party
Notational Fund Transfer-related Type
Digital Cash/ Electronic Money

14. CREDIT CARDS Shopping Cart Credit Card Processing Services
Internet Service Providers: Electronic Payment Media
CREDIT CARDS
Shopping Cart
Credit Card Processing Services
Risks of Using Credit Cards
Credit Card Laundering

15. DEBIT CARDS Convenience Widely Accepted Easy Application
Internet Service Providers: Electronic Payment Media
DEBIT CARDS
Convenience
Widely Accepted
Easy Application
No Grace Payment Period
Less Protection for Undelivered Items
Risks for Merchants - Overspent Customers

16. SMART CARDS Provide users the ability to make a purchase
Internet Service Providers: Electronic Payment Media
SMART CARDS
Provide users the ability to make a purchase
Hold user’s cash, ID information & keys
Provide authentication of transaction
Contain encryption & decryption of messages
Enhance data portability
Similar to electronic purse

17. DIGICASH & E-WALLET No audit trail Offers true digital economy
Internet Service Providers: Electronic Payment Media
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

18. ELECTRONIC FUNDS TRANFER & AUTOMATED CLEARING HOUSE
Internet Service Providers: Electronic Payment Media
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

19. ISSUES & IMPLICATIONS Consumer Needs Corporate Processes
Internet Service Providers: Issues & Implications
ISSUES & IMPLICATIONS
Consumer Needs
Corporate Processes
Corporate Strategy
Regulation of Competition
Economics & Social Processes

20. Chapter 8 Payment Systems: Getting the Money