Electronic Payment Systems [EPS]

INTRODUCTION:

An electronic payment system is needed for compensation for information, goods and services provided through the Internet - such as access to copyrighted materials, database searches or consumption of system resources - or as a convenient form of payment for external goods and services - such as merchandise and services provided outside the Internet. it helps to automate sales activities, extends the potential number of customers and may reduce the amount of paperwork.

REQUIREMENTS:

Security: payment systems are very likely to become a target for criminal attacks.
Flexibility: different models for different situations (anonymity, accountability, risk).
Computational efficiency: support for micropayment; per-transaction cost must be small enough so that they are insignificant.

PAYMENT METHODS:

Secure (or non-secure) presentation: the customer provides credit card information over a secure (or even clear) transportation means.
Customer registration: the customer gets a password or digital signature based on a credit card (hides the credit card information from the merchant, but still clears through the credit card).
Credit-debit instruments: similar to customer registration but only one bill per month either through credit card or debit check.
Electronic currency: this method has potential for anonymity but requires tamper resistant hardware.
Server scrip: the customer gets a kind of coupons from an agent that can be spend only with one particular merchant. this reduces the risk of double spending and allows off-line transactions.
Direct transfer: the customer initiates the transfer of funds to the account of the merchant. this method provides no anonymity.
Collection agent: the merchant refers the customer to a third party who collects payment using one of the methods mentioned above.

Of all models, (non-)secure presentation is the only model that has a large customer base today. all other methods require a special hardware and/or software that most potential customers don't have.