1.

Diffence between Traditional payment methods and

electronic payment methods.

2.Types of electronic payment method.

Ans:Sure, let's break down electronic payment methods into simpler
terms:
Imagine you want to pay for something without using actual cash.
Electronic payments are just ways to move money digitally.
Here are the main types:
1. Card Payments:
o Credit Cards: You borrow money from the bank to pay
now, and pay the bank back later. (Example: Visa,
MasterCard)
o Debit Cards: Money comes directly out of your bank
account right away. (Example: Your ATM card)
 o Prepaid Cards: Like a gift card, you load money onto it
beforehand, then spend it.
2. Phone & Digital Wallets:
o Digital Wallets (like Google Pay, Apple Pay, PayPal): You
store your card details in an app on your phone or
computer. Then, you can tap your phone to pay in stores
or click a button online.
o Apps to Send Money (like Venmo, Zelle, PhonePe,
Google Pay in India): These let you send money directly to
friends or family using just their phone number or a
special ID.
3. Direct Bank Payments:
o Online Banking (NetBanking): You log into your bank's
website and tell them to send money directly from your
account to a business or person.
o Direct Debit/Automatic Payments: You give a company
permission to automatically take money from your
account for bills (like Netflix or phone bills).
4. Other Digital Ways:
o Cryptocurrency (like Bitcoin): A very new type of digital
money that's not controlled by banks or governments. Still
not widely used for everyday payments.
o Buy Now, Pay Later (BNPL): You get the item now, but pay
for it in several small payments over time. (Example:
Klarna, Afterpay)
3.Ecommerce secure payment method/system.
Ans:Common Secure Payment Methods:
• Credit and Debit Cards:
These remain popular for online payments, leveraging features like
card networks, encryption, and fraud prevention tools.
• Digital Wallets:
These platforms store payment information securely and allow for
easy online payments.
• Payment Gateways:
These providers offer secure transaction processing, fraud detection,
and PCI DSS compliance.
• Secure Electronic Transaction (SET):
A protocol that encrypts card details and authenticates users,
ensuring secure transactions.
• ACH Payments:
These electronic transfers via the ACH network are generally
considered secure, with clearinghouses enforcing regulations.
• Cryptocurrencies:
While still developing, some businesses are accepting
cryptocurrencies, offering a potentially secure option.
• Biometric Payments:
Using biometric authentication (fingerprint or facial recognition) adds
an extra layer of security.
• Buy Now, Pay Later (BNPL) Options:
These services provide flexible payment options and often have
strong security measures.
4.SSL,SED,cyber cash model,digital cash ,smart card,EDI
Ans: Secure Sockets Layer (SSL)
What is SSL?
SSL is a security protocol that encrypts data exchanged between a
web browser and a web server, ensuring secure communication over
the internet.
How SSL Works?
1. Handshake Process:
a. The client (browser) requests a secure connection.
b. The server sends its SSL certificate (contains public key and identity
details).
c. The client verifies the certificate with a Certificate Authority (CA).
2. Encryption:
a) The browser and server establish a shared encryption key.
b) Data is encrypted before transmission to prevent hacking.
3. Secure Data Transfer: Once encrypted, data is transmitted securely.
Benefits of SSL in E-Commerce:
1. Encrypts sensitive information (e.g., credit card details, login
credentials).
2. Prevents man-in-the-middle (MITM) attacks.
3. Authenticates the website using SSL certificates.
4. Boosts customer trust and SEO ranking.
Types of SSL Certificates:
1. Domain Validation (DV) – Basic encryption for personal sites.
2. Organization Validation (OV) – Verifies business identity.
3. Extended Validation (EV) – High security for e-commerce and
banking sites.
Example of SSL Usage: When you visit https://www.amazon.com, the
HTTPS and padlock icon indicate that SSL is active.
Cyber cash model
The CyberCash model (popular in the mid-1990s but no longer used)
was an early system for secure online payments.
Here's the short version:
• Goal: Allow secure online credit card payments without
merchants seeing your card number.
• How it worked:
o Customer: Used "CyberWallet" software on their
computer to encrypt card details.
o Merchant: Had "CashRegister" software to receive the
encrypted info.
o CyberCash Server: Acted as a central, secure
intermediary, decrypting the payment, sending it to banks
for authorization, and then sending the result back.
• Security: Used strong encryption and digital signatures to
protect card data.
• Why it failed: Required customers to download and install
software (which was inconvenient), and simpler "HTTPS"
encryption built into browsers became common.
Digital cash:
Digital cash is simply money that exists only in an electronic, non-
physical form.
Think of it this way:
• Physical Cash: The actual banknotes and coins you can hold.
• Digital Cash: The numbers you see in your bank account, on
your mobile wallet app, or the balance on a gift card. It's bits
and bytes, not paper or metal.
Key characteristics:
• Electronic: It's stored and transferred using computers and
networks.
• Convenient: Allows for quick, easy online and mobile payments.
• Secure: Relies on technology (like encryption) to protect
transactions.
• No Physical Form: You can't touch it.
Examples you use every day:
• Your bank account balance (when you check it online or at an
ATM).
• Money in your Google Pay, Paytm, or Apple Pay wallet.
• The balance on a prepaid debit card.
• Even Bitcoin and other cryptocurrencies are a form of digital
cash, though they operate differently from traditional bank-
backed digital money.
Smart card: A smart card is a plastic card with a tiny computer chip
embedded in it.
This chip makes the card:
• Smart: It can store and process information securely.
• Secure: Hard to fake or copy.
• Versatile: Used for payments, IDs, phone SIMs, and more.
EDI: EDI (Electronic Data Interchange) is a fancy name for computers
talking to computers about business stuff.
Instead of sending paper documents (like purchase orders or
invoices) by mail, fax, or even email, EDI lets businesses exchange
these documents electronically in a standardized format.
In short:
• What it is: Automated, computer-to-computer exchange of
common business documents (like orders, invoices).
• Goal: Replace paper and manual tasks.
• How it works:
o Your computer system creates a document.
o It's translated into a standard EDI format.
o It's sent securely to your partner's computer system.
o Their system reads and processes it automatically.
• Benefits:
o Faster: Transactions happen in minutes, not days.
o Fewer Errors: No manual re-typing, so less mistakes.
o Cost Savings: No paper, printing, or postage.
o Increased Efficiency: Automates repetitive tasks, freeing
up staff.
•