e-banking & e-

marketing
E-banking (internet banking)

 Internet banking, also known as online banking or e-banking or

Net Banking is a facility offered by banks and financial
institutions that allow customers to use banking services over the
internet. Customers need not visit their bank’s branch office to
avail each and every small service. Not all account holders get
access to internet banking.
 If you would like to use internet banking services, you must
register for the facility while opening the account or later. You
have to use the registered customer ID and password to log into
your internet banking account.
Feature of Internet banking

 Check the account statement online.

 Open a fixed deposit account.
 Pay utility bills such as water bill and electricity bill.
 Make merchant payments.
 Transfer funds.
 Order for a cheque book.
 Buy general insurance.
 Recharge prepaid mobile/DTH.
Advantage of Internet banking

 Availability: You can avail the banking services round the clock
throughout the year. Most of the services offered are not time-
restricted; you can check your account balance at any time and
transfer funds without having to wait for the bank to open.

 Easy to Operate: Using the services offered by online banking is

simple and easy. Many find transacting online a lot easier than visiting
the branch for the same.

 Convenience: You need not leave your chores behind and go stand in
a queue at the bank branch. You can complete your transactions from
wherever you are. Pay utility bills, recurring deposit account
instalments, and others using online banking.
Advantage of Internet banking

 Time Efficient: You can complete any transaction in a matter of a

few minutes via internet banking. Funds can be transferred to
any account within the country or open a fixed deposit account
within no time on net banking.

 Activity Tracking: When you make a transaction at the bank

branch, you will receive an acknowledgement receipt. There are
possibilities of you losing it. In contrast, all the transactions you
perform on a bank’s internet banking portal will be recorded. You
can show this as proof of the transaction if need be. Details such
as the payee’s name, bank account number, the amount paid,
the date and time of payment, and remarks if any will be
recorded as well.
Disadvantage of Internet banking

 Internet Requirement: An uninterrupted internet connection is a

foremost requirement to use internet banking services. If you do
not have access to the internet, you cannot make use of any
facilities offered online. Similarly, if the bank servers are down due
to any technical issues on their part, you cannot access net
banking services.

 Transaction Security: No matter how much precautions banks take

to provide a secure network, online banking transactions are still
susceptible to hackers. Irrespective of the advanced encryption
methods used to keep user data safe, there have been cases where
the transaction data is compromised. This may cause a major
threat such as using the data illegally for the hacker’s benefit.
Disadvantage of Internet banking

 Difficult for Beginners: There are people in India who have been living
lives far away from the web of the internet. It might seem a whole new
deal for them to understand how internet banking works. Worse still, if
there is nobody who can explain them on how internet banking works and
the process flow of how to go about it. It will be very difficult for
inexperienced beginners to figure it out for themselves.

 Securing Password: Every internet banking account requires the password

to be entered in order to access the services. Therefore, the password
plays a key role in maintaining integrity. If the password is revealed to
others, they may utilize the information to devise some fraud. Also, the
chosen password must comply with the rules stated by the banks.
Individuals must change the password frequently to avoid password theft
which can be a hassle to remember by the account holder himself.
EFT

 An electronic funds transfer (EFT) is the electronic transfer of money over an

online network. Electronic funds transfers can be performed between the same
bank or a different one, and can be accomplished with several different types of
payment systems. An EFT can be initiated by a person or by an institution like a
business and often doesn’t require much more than a bank account in good
standing.

 An electronic funds transfer is a widely used method for moving funds from one
account to another using a computer network. Electronic funds transfers replace
paper-based transfers and human intermediaries, but provide the customer with
the convenience of doing her own banking.

 Every time a banking customer uses her credit or debit card, whether at a physical
point-of-sale or online, she’s engaging in an electronic funds transfer. Any
preauthorized charges, such as direct deposits or utility bills, also utilize an EFT.
EFT

 Certain services use EFTs to create a peer-to-peer payment

environment. In such a situation, the sender simply uses an app
or website to indicate that she wants to send money to a
recipient. Often, this means sending money from a bank account
to another bank account, but it can sometimes mean transferring
it to the service itself, from where the recipient can withdraw the
funds into her bank account manually.

 Electronic funds transfers are secured by a personal identification

number (PIN) or the login information that unlocks the customer’s
online banking service. An automated clearing house (ACH)
processes the payment.
EFT

 The most popular form of electronic funds transfer is a direct deposit, in

which an employee of a company preauthorizes her employer to pay her
salary directly into her bank account. However, numerous other
electronic funds transfers exist, including the following:

 ATMs.
 Online peer-to-peer payment apps like PayPal and Venmo.
 Pay-by-phone systems.
 Wire transfers.
 Online or mobile banking.
 Electronic checks.
Types of Fund transfer

NEFT
 National Electronic Fund Transfer (NEFT) is a payment system
which allows one-to-one fund transfer.
 Using NEFT, individuals and corporates can transfer funds
electronically from any bank branch to any individual or
corporate with an account with any other bank branch in the
country
 NEFT service is available 24×7 on internet banking. But, it is a
time-restricted service at the bank branch
 Usually, NEFT transfer is successfully completed within 30
minutes. Nonetheless, the time can even stretch to 2-3 hours or
might be completed in just 10 minutes
Types of Fund transfer

RTGS
 Real-Time Gross Settlement (RTGS) is a continuous settlement of funds
individually on an order by order basis.

 This payment system ensures that the receiver’s account gets

credited with the funds almost immediately and not after a certain
duration, as is the case with other payment modes like NEFT
 RTGS transactions are tracked by the RBI, thereby successful transfers
are irreversible. This method is majorly used for large value transfers
 The minimum amount to be remitted through RTGS is 2 lakh. There is
no cap on the maximum amount for transfer via RTGS
 Like NEFT, RTGS is also available online 24×7
Types of Fund transfer

IMPS
 Immediate Payment System (IMPS) is another payment method that
transfers funds in real-time.

 IMPS is used to transfer funds instantly within banks across India via
mobile, internet and ATM, which is not only safe but also economical
both in financial and non-financial perspectives
 IMPS is an inexpensive mode of fund transfer. Other fund transfer
mediums such as NEFT and RTGS charge significantly higher than IMPS
 It does not require details like account number, IFSC code, etc. Funds
can be transferred via IMPS just with the mobile number of the
beneficiary
Changing Dynamics in Banking

 Banking has witnessed a significant change in recent times. Owing to

the increasing consumer expectancies, regulations, economic changes
and constant competition, modern banking has embraced technology.
Digital platforms, mobile, internet banking, and payments bank have
revolutionized the sector in a substantial way. “The Digital India
Moment” has also given the much-needed impetus to the digitization
efforts in the banking sector.

 A multinational professional service and one of the Big fours, studied

these fluctuations in financial structure and banking landscape and
recently released a report “Banking on the Future: Vision 2020” along
with the Confederation of Indian Industry. The report highlights the role
of technology in banking and how technology-oriented innovation will
disrupt the market.
Changing Dynamics in Banking

5 crucial changes that will disrupt the Indian banking sector:

 1. Payment banks to pave the way

 2. Role of Artificial Intelligence
 3. Blockchain & Distributed Ledger Technology
 4. Cyber Security
 5. Increasing use-cases of RPA
Changing Dynamics in Banking
1. Payment banks to pave the way
 The report highlights the growing importance of payment banks in the ecosystem. In
India’s cash based economy, digital payment instruments will drive growth in non-cash
payments. PBs will have long term implications on the syntax of large financial institutions
as they disintermediate the value chain, by leveraging innovations in “Financial
Technology”, investing in innovations, and lowering transaction costs—the report
highlights. The reports also states that “Digital footprint” will be the way forward for all
PBs. How well PBs engage in coopetition with Fintech startups playing in emerging
technologies will determine how they can differentiate in an increasingly crowded market.

2. Role of Artificial Intelligence

 Artificial intelligence will be an integral part of smart banking. Banks can expand their
consumer base by learning what clicks with their users. Cognitive technology with AI can
offer features like cognitive engagement, cognitive automation, cognitive perceptions, and
cognitive strategy formation. Through AI, a support system can be developed that targets
the user’s personal preferences, reduces human intervention, catches data patterns and
devises strategies based on market subtilities. One such example is Bank of America that
has introduced the chatbot ‘Erica’ for customer assistance.
Changing Dynamics in Banking
3. Blockchain & Distributed Ledger Technology
 The concept of the banking system with Distributed Ledgers supported by Blockchain
will no longer be far-fetched. This step can initiate an uninterrupted and fairly
tamperproof information inter-changes between the involved parties in real-time.
Through a distributed network of computers, a common pool of information is
maintained. However, transactions are unassailable and inviolable due to
cryptographic algorithms. The financial services industry may be one of the firsts to be
impacted by wider adoption of Blockchain and its associated DLT, the report says.

4. Cyber Security
 Proliferation of internet and mobile banking is posing new security challenges to
financial services firms across the globe. Security measures are present in the form of
KYC, 2 step authentication and EMV chip cards. However, the game needs to be upped
with looming threats like phishing fraud, app misuse, cyber intrusion, magnetic strip
duplicating of cards and so on. The report underscores the need for enhanced cyber
risk assessment framework and testing methodology to continuously detect and
protect against evolving cyber threats.
Changing Dynamics in Banking

5. Increasing use-cases of RPA:

 Robotic process automation (RPA) will see more use cases due to
its benefits as compared to the traditional automation
technologies. The Deloitte reports lists down a number of use
cases that are already prevalent in the financial services sector,
including global investment banks and insurance firms. The
challenges in adoption are primarily around change in mind-sets,
and building the right business use case and operating model for
RPA, the report adds.
Use of Technology
in Banking
 Technology is yet another important element that the banking sector in
India is leveraging to enhance its productivity. The adoption of Core Banking
Solutions (CBS) for the incorporation of sophisticated technological solutions
was an important step towards using technology to enhance the banking
sector. CBS has not only enabled bank-to-client interactions but has also
facilitated the calculation of penalties, interests, and maturity, etc. Next,
with the coming of the digital age, technological integration has been raised
a notch higher to enable unprecedented customer experience. Some of the
current digitally-enabled government-approved banking platforms are:

 Unified Payment Interface (UPI)

 Bharat Interface For Money (BHIM)
 National Unified USSD Platform
 Aadhar Enabled Payment System
Use of Technology
in Banking

Fintech Companies
 Fintech or financial technology is indeed a disrupting force in the
sector. Due to the changing landscapes in the Indian financial
sector, many companies have emerged to be a significant part of
this ecosystem. Fintech companies specialize in developing
technology solutions that help companies to manage the
financial aspects of their business, like new software's,
applications, processes as well as business models. Investments
made on Fintech companies have increased drastically in the
past decade making it a multi-billion dollar industry globally.
Use of Technology
in Banking
Digital-only Banks
 Digital-only banks operate only through IT platforms which can
be accessed using mobile phones, laptops or tablets. Digital-only
banks operate in a paperless and branchless model and seem to
overtake the traditional system of banks in the future. These
banks provide high-speed banking facility at a low transaction
charge. These virtual banks are an ideal choice for the current
fast-paced world.
 All these recent trends will reshape the banking and finance
industry by bringing revolutionary changes in the traditional
models. This shift is not devoid of challenges, but the customers
are quite open to innovations and the government is also
showing great support for these trends.
Payment Gateway
What is Payment Gateway?
 A payment gateway is an e-commerce application service
provider service that authorizes payments for e-businesses(ex:
online shopping carts)

 Before going to the payment gateways first we need to know the

following terms.
 Terms which are related to
payment gateway
 E-commerce

 Web services

 Payment Process
 E-commerce
 Electronic Commerce, commonly known as (electronic
marketing) e-commerce or eCommerce, consists of the
buying and selling of products or services over electronic
systems such as the Internet and other computer networks.
 Web services

 A Web service is defined by the W3C as "a software system

designed to support interoperable machine-to-machine
interaction over a network”.
 For accessing every web service we need an API(Application
Program Interface) key.
 Web service is a platform independent.
 Payment Process
 A payment process is nothing but an
transaction of money between the users and
merchant (owner of the product).
 In payment process we need there are 2
types of accounts.

• Business Account (user)

• Merchant Account (owner)

Online Shopping Example
 The Payment Gateway Workflow should be inserted before
the checkout.
 After the confirm order page will the payment gateway
workflow be activated
Working of Payment Gateway

 Visitor places the order on the website and it is sent

to the merchant's web server in encrypted format.
This is usually done via SSL (Secure Socket Layer)
encryption. Content organization
 The transactions details are then forwarded to the
concerned Payment Gateway.
 The transaction information is then passed on to the
merchants acquiring bank by the Payment Gateway.
 Merchants acquiring bank then forwards the
transaction information to the issuing bank (one that
issued the credit card to the customer).
 Then the card issuing bank sends a response back to the
Payment Gateway. The response includes information
that whether the payment has been approved or
declined. In case of declination the reason is also sent in
the response.

 The response is then forwarded by the Payment Gateway

to the merchant’s server.

 At merchants server the response is encrypted again and

is relayed back to the customer. This allows the
customer to know that whether the order has been
placed successfully or not.

 The entire process typically takes less than 5 seconds.

Flow of payment process
Popular PG in India

CC Avenue India Pay

DirectPay Atom

EBS TechPoint Process

HDFC ICICI Payseal

Transecute PayU
What is SSL?

SSL stands for Secure Socket Layer

 Payment Gateways encrypt sensitive information, such as credit

card numbers, to ensure that information passes securely
between the customer and the merchant.

 SSL used HTTPS protocol.

Types of Payment Gateways
 PayPal (Global)
 Authorize. Net (US)
 VeriSign (Global)
 Link point (US)
 2Checkout (Global)
 World Pay (Global)
 Cyber Source (US)
 Protx (UK)
 EWay (AU)
 Moneris (CA)
 QuickBooks Merchant Services (US Only)
 Gateway advantages
 Gateways can provide many benefits, with its main benefit being security. We
recommend to all our customers that they use a payment gateway to handle all
credit card payments. While VP-ASP does provide credit card number encryption
and can ensure that the software is secure, it is still stored in a location that a
hacker may be able to access. Whereas, when using a payment gateway, the
credit card information is sent directly to the bank for verification and therefore
no credit card details are stored.

 In addition to security, payment gateways also provide the following benefits:

 Credit card validation and processing in real time

 Less fraud (but there are many stolen credit card numbers floating around)

 Money is normally deposited into your bank account automatically

 Reports and refunds normally allowed via browser by gateway company (not
VP-ASP)
 Gateway Disadvantages
Every gateway company charges fees. Fees can include some or
all of the following:

 Fixed fee per month

 Percentage fee per amount spent

 A fixed fee per transaction

 In addition your own bank or the gateway's bank will charge a

merchant fee for the privilege of allowing credit card
purchases. This can range from 1-5% or more.