What do you mean by EPS? Discuss different types of EPS available?

What do you mean by EPS? Discuss different types of EPS available?

Meaning-

 EPS (Electronic payment system) is an online business procedure for transferring funds via electronic means, such as personal computers, services, mobile phones, and personal digital assistants (PDAs). They are frequently utilized in banks anytime payment and other means transactions are done. It aids commercial organizations in expanding their market reach/expansion by being user-friendly and taking less time than manual processing.

 

Definition-

 “Any transfer of funds initiated through an electronic terminal, telephonic instrument or computer or magnetic tape so as to order, instruct or authorize a financial institution to debit or credit an account.”

Different types of Electronic Payment System (EPS)-

There are many types of electronic payment system which is worked online. All these are explained below- 

1. Credit Cards-

A credit card is a small rectangular piece of plastic or metal provided by a bank or financial services business that enables cardholders to borrow funds to pay for products and services at merchants who accept credit cards. You can use it to purchase products now and pay for them later, but you must repay the money by the due date. If you are unable to do so, interest will be imposed on the monthly sum carried forward until the dues are paid in full. It's important to understand that the amount you can borrow using the card has a restriction. The credit limit is a limit set by the bank after taking into account a number of criteria. 

        Benefits-

                (a)   Buy on Credit.

                (b)   It is the most accepted method of payment.

                (c)   It makes travel easy.

                (d)   No need to carry money.

            2.  Debit Cards-

        A debit card is a payment card that lets you make secure and easy purchases online and in person by drawing money directly from your checking account. You're not borrowing from a line of credit like you would with a credit card; the money on your debit card is your own. You can also use a debit card to access your cash at ATMs.

                Benefits-

                (a) It avoids fees and service charges.

               (b) There are no interest charges.

               (c) It is convenient to use.

        3.  Charge Cards- 

       A charge card is an electronic payment card that does not charge interest but requires you to pay the balance in full, usually monthly. Charge cards are only available from a few issuers. They generally charge a higher annual fee and have an unlimited spending limit with high reward bonuses for the cardholder. A charge card is a type of payment card that is primarily used by corporations or high-income individuals. It works similarly to a credit card in that it can be used to make transactions without instantly debiting funds from the company's bank account. A credit application must be completed in order to receive a business charge card, and there is usually a minimum income amount that a firm must disclose in order to obtain a charge card. Charge cards cannot be used to transfer balances; they may only be used to make purchases. American Express is the most widely used charge card in the United Kingdom.

               Benefits-

                (a)   It makes man financially disciplined.

                (b)   It could help in get a lower interest rate on loans.

                (c)    Charge card is safer than some other cards.

                (d)   Get credit facilities in emergency too.

          4.  Smart Cards-

        A smart card is a security token that includes an embedded integrated circuit chip card that saves information on a microprocessor. Smart cards are usually the same size as a driver's license or credit card and are available in metal or plastic. Personal identity, authentication, data storage, and application processing are all possible with smart cards.

         Benefits-

                (a)   It provides high level of security.

                (b)   It has larger memory.

                (c)    It prevents fraud.

                (d)   It reduced cost for operators and users.

        5.  E-Cash- 

        In case of e-cash, both customer and merchant have to sign up with the bank or company issuing e-cash. It enables transactions between customers without the need for banks or other parties. E-cash usually operates on a smart card, which includes an embedded microprocessor chip. 

        Benefits-

                (a)   It can be operated cheaply.

               (b)   It can be used for very small payments.

               (c)    The system can be known.

               (d)   E-cash cannot be lost like credit cards.

        6.  Net Cash/Currency Server- 

           The method was developed by university of southern California in order to use the already existing accounting systems and procedures in financial institutions so that initial investment cost can be reduced. As this method is based on a decentralized approach, problems associated with a large number of coins. Net cash coins have a face value and a serial number along with the address of the issuing server and an expiry date. The customer gets Net cash coins from a currency server. These coins are encoded with a public key and send to the dealer.

          Benefits-

                    (a)   It saves our time.

                   (b)   It provides extra security.

                   (c)    It increases the accuracy.

                  (d)   It provides the facility of discounted transaction fees.

        7.  E-Cheques- 

            An electronic cheque, also known as an e-cheque, is a type of payment that is made over the Internet or another data network and performs the same purpose as a traditional paper cheque. The cheque may be processed in small steps because it is in electronic format. E-Cheque is the digital form of a cheque. It completely automates the cheque writing and depositing processes. Using e-Cheques to make a payment will be completely paperless. It also includes more security features than traditional paper checks, such as authentication, public key cryptography, digital signatures, and encryption.

            Benefits-

            (a)    It can be issued anytime anywhere.

            (b)    It removes the need for physical delivery and deposit.    

            (c)     It carries enhanced security features.

(d)    It removes the need of physical cheque book. The e-Cheque book is kept by the paying bank.

8.  Electronic Fund Transfer (EFT) - 

             Electronic funds transfer (EFT) is the electronic movement of funds from one bank account to another, either within a single financial institution or across numerous institutions, using computer-based systems and without the involvement of bank personnel. It's also known as a direct deposit because it deposits money into the recipient's account without the need for any physically, such as documents or cheques, and because it's freely reachable.

          

          Benefits-

                (a)   Pay for things instantly online, in-store, or over the phone.

                (b)   Making EFT payments is safe, simple, and convenient.

                (c)    Keep less cash on hand and carry less cash while doing commercial banking transactions.

                (d)   All EFT payments are recorded. Additionally, when a good POS system is used, all sales are                 quickly recorded for accounting purposes.

 9.  E-Wallets- 

            An e-wallet is an electronic card that may be used to make online purchases using a computer or smartphone. It functions similarly to a credit or debit card. To make payments, an E-wallet must be linked to the user's bank account. The primary goal of an e-Wallet is to make paperless money transactions more convenient.

         Benefits-

               (a)   It is a very convenient method.

               (b)   E-wallet is more secure payment method.

               (c)    It provides rewards for purchases.

Conclusion-

These are the various types of e-payment method. People can use any of them by their conveniency.