Chapter 4 Payment Systems

CHAPTER 4
Electronic Payment Systems- Part 2
© LMS SEGi education group 1

Last Updated: © LMS SEGi education group 2
Tuesday, August 31, 2021
Learning Objectives
• Alternative electronic payment methods

• Other method used primarily for B2B payments
• Requirements and operations of and arising
issues.
Last Updated: © LMS SEGi College 3

SIX (6) requirement of safe E-Commerce
payment and transaction.
1. Confidential − Information should not be accessible to
unauthorized person. It should not be intercepted during
transmission.
2. Integrity − Information should not be altered during its
transmission over the network.
3. Availability − Information should be available wherever and
whenever requirement within time limit specified.
4. Authenticity − There should be a mechanism to authenticate user
before giving him/her access to required information.
5. Non-Repudiation − It is protection against denial of order or denial
of payment. Once a sender sends a message, the sender should
not able to deny sending the message. Similarly the recipient of
message should not be able to deny receipt.
6. Encryption − Information should be encrypted and decrypted only
by authorized user.
Electronic market (e-marketplace)
• An online marketplace where buyers and

sellers meet to exchange goods, services,
money, or information
• Exist as 2 types: public and private
marketplace

E- Marketplace

1. Public e- marketplace -B2B marketplace
owned/managed by third party that include
many sellers and many buyers.
2. Private e- marketplace A marketplace
used to connect a limited number or pre-
qualified buyers or sellers in one market,
owned and operated by a single company.
The owner uses the exchange to trade
product with established suppliers and
customers.
Different between Credit card and E -Wallet
Credit Card E-Wallet
1. A Credit card is basically an electronic card It is a virtual wallet that can be used to pay
with magnetic data strip or a chip, issued to anything; groceries, pay bill, pay transport, food,
customers by banks and other credit agencies. ect
2. Credit cards are lines of credit when you use An e wallet apps needed to be downloaded into
a credit card, the issuer puts money toward the smart phone and internet connection is required
transaction. This is a loan you are expected to when using it.
pay back in full unless you won't to be charged
interest.
3. Credit Card Not required to be connected to a To make payment, user scan QR code and the
checking account. payment will be charged directly to credit card or
debit card or to digital money stored in the
cloud.
4. Credit cards in the U.S are not very secure Heavily encrypted, password and pin number
and of themselves many still deted card required and is much safer compared to credit
technology. However consumers are not held card
liable for this poor security
5. Pin code is required when making physical Offers reward to customers; like collecting points
purchase or verification is needed in online and discounted product
purchase where the code is sent to user’s phone

B2B Payment systems
1. e - Checks
• e- Checks is an electronic check payment. Most
online vendors accept electronic check
payments, and many prefer them.
• An electronic check is a digital version of a
paper check that transfers money directly from
one checking account into another
• Simple and relatively cheap with a long float.
They do not have setup costs or a complex
system to learn.
B2B Payment systems
2. Credit cards
• They make it easy to access credit and
are convenient. They tend to be fairly

secure
• However, they can be an expensive
payment method with numerous costs and

fees attached to each transaction.

B2B Payment systems
3. Electronic funds transfer (EFT)

• EFT, is the electronic transferring of money from
one bank account to another, often called
electronic banking, direct deposit
• Many companies rely on EFT to directly deposit
paychecks into employee’s accounts, and many

people use EFT to pay utility or other bills.

4. Wire Transfer
• Transfer money immediately, safest and most reliable
way.
• A wire transfer is a method of transferring money from
one group to another, either through bank accounts or

transferring cash through a third party vendor or service.
• Wire transfers are particularly useful when transferring
money to a person or business internationally because

money can be made available right away and does not
require a bank account.
• The receiver can pick up money from bank or post office.

5. Purchasing card
• Often referred to as a P-card, is a type of company credit
card given to employees to make business purchases.

• Businesses can put tight restrictions on the card, such as
spending limits and business location limits.

• You can even set up a P-card that can only be used for
one specific vendor or type of service, and inversely set

a card to block certain types of purchases

6. Online payment platforms
• Online payment platforms like PayPal,
Venmo, ApplePay, Amazon Payment,

Google Wallet, WePay

• The major retail e-payment systems in
Malaysia are Financial Process Exchange
(FPX) and Interbank GIRO (IBG).

Financial Process
Exchange (FPX)
• FPX is a national Internet-based multi-bank payment
gateway/infrastructure in Malaysia. It was launched in October 2004
to facilitate on-line payments for electronic commerce (e-commerce)
transactions.
• It also provides business-to business (B2B) and business-to-

customer (B2C) payments via Internet. It is a secure online payment
gateway system that allows consumers to make real time online
payments by using their existing current or savings account.
• For personal banking accounts, the minimum
limit per transaction is RM1.00 and the maximum amount is
limited up to RM30,000* per transaction. However, this is subject to
change or variation
• Currently there are 11 participating Malaysian banks offering FPX

services.
Last Updated: © LMS SEducation group 21
Interbank GIRO (IBG)
• IBG is an electronic fund transfer payment system designed to

handle high volume of low-value interbank payment that is less than
RM100,000 per transaction.
• IBG is a daily exchange of electronic transactions through MEPS
system that allows transfer of funds between financial institutions.
• IBG transactions can be conducted via Internet banking channel as

well as over the counter at participating banks.
• To date, there are 18 participating banks (14 commercial banks, 2

Islamic banks and 2 developmental financial institutions) are offering
IBG services

Issues in electronic payment system
Fraud
• As e-commerce expands, opportunities
for fraudulent misuse of payment networks

and data theft grow right alongside.

• Most common types of fraud causing concern among
merchants are identity theft (71%), phishing (66%) and
account theft (63%).
• Order items online under a false name and pay using
someone else’s credit card information
• Another technical method is known as pharming, in
which manipulated browsers direct unsuspecting
customers to fraudulent websites.
• Man-in-the-middle attacks' are even more sophisticated.
These involve hackers muscling in on communications
between customers and merchants (or between
customers and banks) in order to take out login data.
• Lack of Awareness
Online payment is not an easy task. Even educated people
also face problems in making online payments.
Therefore, they always prefer traditional way of shopping

instead of online shopping. Sometimes there is a technical
problem in server customers tried to do online payments
but they fails to do. As a result they avoid it.

• Lack of Trust
Electronic payments have a long history of fraud, misuse
and low reliability as well as it is new system without
established positive reputation. Potential customers often
mention this risk as the key reason why they do not trust a
payment services and therefore do not make internet
purchases

• Issues with e-Cash
The main problem of e-cash is that it is not universally
accepted because it is necessary that the commercial
establishment accept it as payment method.
Another problem is that when we makes payment by using

e-cash, the client and the salesman have accounts in the
same bank which issue e-cash. The payment is not valid in
other banks.

• Data Breaches
• A study by the Ponemon Institute found that 43% of
companies of all types had been breached
• Home Depot’s breach, 56 million cards exposed;
cyberattack exposed names, phone numbers and email
information on 76 million consumers and 7 million small
businesses
• The latest scam trend reported in Malaysia is phone
scamming. What happens is that these scammers will
call and ‘alert’ you on an outstanding credit card balance
– usually a high amount – and that if you don’t make
some payment, you will get penalized.
• Another scam to look out for is phishing.
• Do not click on a link that is sent to you through
e-mail or other channels no matter how reliable it
may look,
• Fraudsters to acquire your personal banking
information such as your online banking
password, bank account number and credit card
details.
• Never share any sensitive information like these
over e-mail or phone calls.
Ways to prevent online fraud

Ways to prevent online fraud.
1. Know who you’re dealing with. In any transaction you

conduct, make sure to check to see if the seller, charity,
company, or organization is credible. Always call the
number found on a website’s contact information to
make sure the number legitimately belongs to the entity
you are dealing with.
2. Don’t believe promises of easy money. If someone
claims that you can earn money with little or no work,
get a loan or credit card even if you have bad credit, or
make money on an investment with little or no risk, it’s
probably a scam. Oftentimes, offers that seem too good
to be true, actually are too good to be true.

3. Guard your personal information. Crooks pretending to be from
companies you do business with may call or send an email, claiming
they need to verify your personal information. Don’t provide your credit
card or bank account number unless you are actually paying for
something and know who you are sending payment to.
Be especially suspicious if someone claiming to be from a company
with whom you have an account asks for information that the
business already has.

4. Stay safe online. Don’t send sensitive information such
as credit card numbers by email because it’s not secure.
Look for clues about security on Web sites. At the point
where you are asked to provide your financial or other
sensitive information, the letters at the beginning of the
address bar at the top of the screen should change from
“http” to “https” or “shttp.”

5. Be cautious about unsolicited emails. They are often fraudulent. If
you are familiar with the company or charity that sent you the email and
you don’t want to receive further messages, send a reply asking to be
removed from the email list.
However, responding to unknown senders may simply verify that yours
is a working email address and result in even more unwanted
messages from strangers. The best approach may simply be to delete
the email.

Reference:
• Efraim Turban, David King, Judy Lang,

Introduction to Electronic Commerce (2010),
3rd edition,
Pearson Publisher.


Chapter 4 Payment Systems

Uploaded by

Copyright:

Available Formats

You might also like

Chapter 4 Payment Systems

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 4 Payment Systems

Uploaded by

Copyright:

Available Formats

CHAPTER 4

Electronic Payment Systems- Part 2

© LMS SEGi education group 1

• Alternative electronic payment methods

Last Updated: © LMS SEGi College 3

• An online marketplace where buyers and

Last Updated: © LMS SEGi education group 8

Last Updated: © LMS SEGi education group 9

Last Updated: © LMS SEGi education group 11

are convenient. They tend to be fairly

payment method with numerous costs and

Last Updated: © LMS SEGi education group 15

3. Electronic funds transfer (EFT)

paychecks into employee’s accounts, and many

Last Updated: © LMS SEGi education group 16

one group to another, either through bank accounts or

money to a person or business internationally because

Last Updated: © LMS SEGi education group 17

card given to employees to make business purchases.

spending limits and business location limits.

one specific vendor or type of service, and inversely set

Last Updated: © LMS SEGi education group 18

Venmo, ApplePay, Amazon Payment,

Last Updated: © LMS SEGi education group 19

Last Updated: © LMS SEGi education group 20

• It also provides business-to business (B2B) and business-to-

• Currently there are 11 participating Malaysian banks offering FPX

• IBG is an electronic fund transfer payment system designed to

• IBG transactions can be conducted via Internet banking channel as

• To date, there are 18 participating banks (14 commercial banks, 2

Last Updated: © LMS SEGi education group 22

for fraudulent misuse of payment networks

Last Updated: © LMS SEGi education group 24

Therefore, they always prefer traditional way of shopping

Last Updated: © LMS SEGi education group 26

Last Updated: © LMS SEGi education group 27

Another problem is that when we makes payment by using

Last Updated: © LMS SEGi education group 28

Last Updated: © LMS SEGi education group 31

1. Know who you’re dealing with. In any transaction you

Last Updated: © LMS SEGi education group 32

Last Updated: © LMS SEGi education group 33

Last Updated: © LMS SEGi education group 34

Last Updated: © LMS SEGi education group 35

• Efraim Turban, David King, Judy Lang,

Last Updated: © LMS SEGi education group 36

You might also like