Tutorial Week 2

Name: Davi Gibran Sukada

Question
1. Critically analyze TWO (2) types of electronic-payment systems that could
be implemented by an online book retailer.  Support your answer with relevant
examples. 
2. Critically discuss TWO (2) differences between cash and electronic-cash.  Support
your answer with relevant examples.
3. Discuss the characteristics of credit and debit card, and its security measures that
facilitate online payment systems.  Support your answers with relevant examples. 

Answer
1. There are many type of electronic-payment system that we can use in our daily life,
two of them are Online Credit Card Payment and Electronic Cash. These two method
can be used also for people who want to make an online book retailer. The first one is
Online Credit Card Payment, actually online credit card is an account that extend
credit to consumer and also can be understand by permitting the customer to purchase
some goods while differing a payments and allows consumer to make a payment to
multiple vendor at once. In a simple word it is a use someone else’s money at first this
is why it has an interest. For example, when customer see a book that he want to buy,
he can use his credit card for a payment but there are some step first before he
purchase the good. First one is Authorization where it is an approval from merchant
bank that makes sure the account have a sufficient funds available for the purchase.
Second step is Capture, where after the fund is available, a hold is placed on the
money. And the last step is the settlement, this is where the process from customer
credit card to the merchant bank account. This process is verry fast, only counted by
second.
Second is an Electronic Cash. It's a type of digital money that allows us to pay for
goods and services without having to use paper or coin money. For e-cash
transactions, two models have emerged first is the online form of E-cash and the
offline form of E-cash. The online form is a worked for all types of internet
transaction and the offline form of E-cash involved a digitally encoded card that
 replace paper money. For example, when customer want to buy the book they can use
a E-cash system for the purchase, but first E-Cash user will download the
electronic money from their bank account and store this on their hard drive.
When they are ready to use the electronic cash to pay an Internet merchant or
shareware provider, the same software is then used to take the amount from
their E-Cash “wallet” and add it to the merchant’s “wallet.” After that, to
ensure that the transaction is checked, the E-cash passes through an E-cash
bank. The merchant or shareware provider will then use this E-Cash to pay
their bills or save it in a conventional bank account for later use. Except for a
small fee charged by the e-cash company, transactions are free. As a result, it is
better suited to small online transactions than any other payment method.

2. Cash
The delivery of the payment is one of the fundamental differences between electronic
payment systems and cash. When we pay with cash, the payment delivery can be a bit
more difficult. We'll need to figure out how to get the money to the business or other
party physically. When we pay with an electronic method, the money is sent through
the Automated Clearing House or another network used by the financial institution.
Another factor to consider is the security of these two payment processes. When
working with currency, there is very little security. We have no way of getting the
cash back if it is lost or stolen on the way to making a payment. An electronic
payment, such as one made with a debit or credit card, may be cancelled or reversed.
We can easily revoke the card and get a new one if it is lost or stolen. With all types
of cards, our liability is limited. We must also consider the level of convenience
involved. When paying cash, we must ensure that we have regular access to the funds.
When we use an electronic payment system, on the other hand, your payments will be
made automatically on a regular basis without the need for you to first obtain cash.

Electronic Cash
Although the concept of e-cash is still new, its versatility and dependability have
made it a big hit. Human life has been transformed by computers. The internet has
given computer use new dimensions. It is now used in every field and in every part of
the world. E-money functions in a similar way to paper money, but without the risks
 and inconveniences associated with cash money. Unlike cash, it can be transferred
instantly between the two parties involved in the online transaction. Money can be
transferred quickly using smart cards and credit cards. E-money has a lot of benefits
over traditional currency, which is why it's so popular. Fast transactions, no need to
carry large amounts of cash, just your small chip card, trustworthy and secure, no fear
of theft or robbery, round-the-clock banking, better information about your account
details, and more personalised banking services and instruments are just a few of the
advantages.

3. Credit Card
Like I mentioned before in answer number 1, online credit card is an account that
extend credit to consumer and also can be understand by permitting the customer to
purchase some goods while differing a payments and allows consumer to make a
payment to multiple vendor at once. In a simple word it is a use someone else’s
money at first this is why it has an interest. Most credit card companies give
customers 30 days to pay before interest is charged on the outstanding balance,
though interest may begin accruing immediately in some cases. There are three
process of credit card, First one is Authorization where it is an approval from
merchant bank that makes sure the account have a sufficient funds available for the
purchase. Second step is Capture, where after the fund is available, a hold is placed on
the money. And the las step is the settlement, this is where the process from customer
credit card to the merchant bank account. This process is verry fast, only counted by
second.

Debit Card
A debit card resembles a credit card, it differs significantly. A bank issues a debit card
to its customers so they can access funds without having to write a paper check or
withdraw cash. A debit card is linked to a checking account and can be used anywhere
that accepts credit cards. If your debit card, for example, bears the Visa logo, it can be
used anywhere that accepts Visa. The bank places a hold on the amount you've spent
when you use a debit card. Money is automatically taken out of your checking
account when you use a debit card. Debit cards have a variety of security features. A
signature panel, a three-digit card security code, and a unique debit card number
(which can be used for electronic transactions) are all physical features that ensure no
one can simply copy your information from the front of the card and use it to buy
things online.