Electronic Payment System and E- Banking

7/30/2019 Electronic Payment System and E- Banking

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Prof. (Dr.) V. Balakista Reddy

Professor of International Law &Head, Centre for Air & Space LawNALSAR University of Law, Hyderabad

E-mail: [email protected]: www.nalsar.ac.in


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Introduction

Internet banking refers to systems that enable bankcustomers to access accounts and general informationon bank products and services through a personalcomputer (PC).

Today, websites, electronic mail, and electronic bill

payment systems are an important way for banks toreach their customers


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Role of Financial system a number of entities that work together to permit the transfer of

value of financial claims by means of systematic procedures.

entities known as financial intermediaries participate.

The financial system lubricate the wheels of commerce, moderncommerce would grind to a halt without the payment systems areregarded as an exciting and strategically crucial feature ofelectronic commerce.

the newer systems for electronic payment has introduced newroles for example. The processing, communicating and storing ofdigital data as value. Thus entities such as digital service providesand certification authorities now participate directly in these

payment system.


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Meaning of E- Banking

e-banking implies provision of banking products andservices through electronic delivery channels.

Some time in the form of automatic teller machines (ATMs)and telephone transactions.

recent times, it has been transformed by the internet - a newdelivery channel that has facilitated banking transactions forboth customers and banks.

For customers, the internet offers faster access, is moreconvenient and available around the clock irrespective ofcustomers location.


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Need of E- Banking

widespread growth of the internet

customers may use this technology anywhere in the world toaccess a banks network.

The internet- enabling technology-has made bankingproducts and services available to more customers by

eliminating geographic and proprietary systems barriers. opportunities to expand or change their product and service

offerings.

internet for delivery of banking products and services

no longer confined to the branches In true internet banking, any inquiry or transaction is

processed online without any reference to the branch at anytime. Providing internet banking is increasingly becoming a

need to have than a nice to have service.


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ew oppor un es o ere y e-banking -Business Strategies

to scale borders, change strategic behaviour and thus bringabout new possibilities.

moved real banking behavior closer to neo- classicaleconomic theories of market functioning.

absolute transparency of the market, clients (both businessas well as retail) can compare the services of various banksmore easily.

the internet has significantly reduced the physical costs of

banking operations. internet has facilitated its transmission

electronic banking services, whether delivered online orthrough other mechanisms


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The Payment Systems

Money

The term money is a generic one that can be applies toa wide array of objects depending on the context.

Characteristics of money

Acts as a medium of exchange

Act as a unit of exchange

a measure of what is owed, by whom and to whom. Act as a means of final payment


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Paying for goods and Services in thetraditional way

A service is provided ora product ismanufactured

The service or productis brought and paidfor with cash or bycard

Productor

service

Payment(Cash or Card)

Bank


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ay ng or goo s an serv cesusing Electronic technology

SellersComputer

BuyersComputer

Providing aservice ormanufacturinga product

Electronictransfer of

value

Product orservicereceived

BANK


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Continue Automated Teller Machines Electronic Fund Transfer at the Point of Sale (EFTPOS)

These transactions incorporate from point of sale, typically at a paymentterminal within the premises of merchants. Online Payment Process

Who are the participants involved in an online transaction? What are the various payment modes? How the online transaction process works?

Participants The participants involved in an online transaction are: Customer Merchant Card issuer/ customers bank

Merchants bank Acquirer Payment gateways

Payment Modes Cash Cheque

Credit


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Electronic Payment System Risks

Credit risk:

Liquidity risk:

Transaction risk Strategic risks

Reputation Risk:

Compliance risk

Foreign exchange risk

ADVANTAGES OF E BANKING


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ADVANTAGES OF E-BANKING Benefits to Customers

Anytime Banking

Anywhere Banking Quick Service

Saving in Time

Customer Satisfaction.

Benefits to Banks Minimise cost

Global Coverage

Central Data Base

Customer-Bank Relationship. Reduces paper work

Minimise Frauds

High Productivity

Advertising Tool


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Continue Benefits to Government

Global Market

Cash less Banking

Transparency.

Benefits to Merchants Traders

Minimise Risk

Instant Settlement Promotions of business enterprises

Increased purchasing


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LIMITATION OF E-BANKING

Banking System not Ready Laws of Land Not Ready

Lack of Infrastructure Facilities

adequate steps have not yet been taken (facilities )

Security Issue

Costly

Low level of Awareness

Hesitation on the part of Customers

Lack of Initiative

Insignificant Role of Govt


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Thank You

Documents

Electronic Payment System and E- Banking