Review of Literature:: Definition of Electronic Payment Systems

Review of Literature:
Definition of Electronic payment systems:
In the last two decades, electronic payment systems (EPS) have attracted much attention from
researchers and information system designers due to their vital role in modern electronic
commerce.
This led to wide and in-depth researches that produced different perspectives on e-payment
definitions among others. These definitions were mainly viewed from different perspectives
ranging from scholars in the field of accounting and finance, business technology to those in
information systems.
For instance, Dennis (2004) defines e- payment system as a form of financial commitment that
involves the buyer and the seller facilitated via the use of electronic communications.
Also, Briggs and Brooks (2011) sees e-payment as a form of inter-connections between
organizations and individuals aided by banks and inter-switch houses that enables monetary
exchange electronically.
In another perspective, Peter and Babatunde (2012) viewed e-payment system as any form of
fund transfer via the internet.
Similarly, according to Adeoti and Osotimehin (2012),electronic payment system refers to an

electronic means of making payments for goods and services procured online or in supermarkets
and shopping malls.
Another definition suggests that e-payment systems are payments made in electronic commerce
environment in the form of money exchange through electronic means (Kaur & Pathak, 2015).
Furthermore, Kalakota and Whinston (1997),sees electronic payment as a financial exchange

that takes place online between the seller and the buyer.
Moreover, Humphrey and Hancock (1997) are in the opinion that electronic payments refer to
cash and associated transactions implemented using electronic means.
E-payment is also defined as payment by electronic transfer of credit card details, direct credit
or other electronic means other than payment by cheque and cash (Agimo, 2004).
Antwi, Hamza, and Bavoh (2015) defined e-payment as a payer’s transfer of a monetary claim
on a party acceptable to the beneficially.
Lin and Nguyen (2001) define e-payment as payments made via the automated clearing house,
commercial card systems and electronic transfers.
Shon and Swatman (1998) define e-payment as any exchange of funds initiated via an
electronic communication channel.
Gans and Scheelings (1999) define e-payment as payments made through electronic signals
linked directly to deposit or credit accounts.
Hord (2005) also sees e- payment as any kind of non-cash payment that does not involve a paper
cheque.
Also, Teoh, Chong, Lin, and Chua (2013) viewed e- payment as any transfer of an electronic
value of payment from a payer to payee through an e-payment channel that allows customers to
remotely access and manage their bank accounts and transactions over an electronic network.
In a nutshell, going by the above definitions, e-payment system can simply be defined as a
collection of components and processes that enables two or more parties to transact and
exchange monetary value via electronic means.
Credit and debit card: A credit card is a plastic card issued to the users to lent money for
purchase of goods and services. The customer type the card number, expiry date and billing
address on the order form and the vendor can verify the details and be confident of payment. A
Debit card is a banking card enhanced with Automated Teller Machine and point of sale features
so that it can be used at merchant locations. A Debit card is linked to an individual’s bank
account, allowing funds to be withdrawn at ATM and point of sale without writing a cheque. A
Debit card holder pay directly through bank for his purchases. It replaces physical cash and
cheque. A debit card holders need to deposit advance in the bank and withdraw in the purchase
time.
Electronic cash: e-Cash is purely software based, anonymous, untraceable, online token
payment system, available on Unix, Windows as well as Macintosh platform. When the tokens
purchased by customers, the e-Cash software stores the digital money on the customer’s personal
computer which is under signed by the bank. The users can easily spend digital money at any
shop accepting e-Cash without giving credit card details to the shopkeeper.
Micropayment system: A micropayment system is a financial transaction involving a very small

sum of money and usually one that occurs online. A number of micropayment systems were
proposed and developed in the mid-to-late 1990s, all of which were ultimately unsuccessful. A
second generation of micropayment systems emerged in the 2010s. For example PayPal defines a
micropayment as a transaction of less than £5.
Session level protocol for secure communication: it is protocol for the Open Systems
Interconnection. Session level protocols provide services for coordinating communication
between local and remote applications, establishing, managing and terminating connections.
Secure Electronic Transaction (SET): Secure electronic transaction is a system of online

payments for ensuring the security of financial transactions on the internet. The SET
specification is an open, technical standard for commerce, developed by VISA and master card.
It facilitates secure payment card transactions over the internet. Digital certificate create a trust
change throughout the transactions, verifying cardholders and merchant validity.
Mobile Phone Payments:
Several initiatives have emerged for initiating e-payments from mobile phones by using short
messages (SMS) or phone calls. These have also been referred to as m-payments (Vassiliou,
2004). Vassiliou further indicates that most m-payments initiatives follow a simple model where
the customer (payer) first identifies him/herself to the merchant by providing his/her phone
number or by calling the merchant. The merchant forwards the payment and customer
information to the payment service provider (e.g. through the mobile network). The service
provider then presents the payment information to the payer for confirmation and upon
confirmation (e.g. with a PIN number) records the transaction. The communication between the
customer and the payment provider and/or merchant can take place through phone calls and/or
short messages.

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Review of Literature:

Definition of Electronic payment systems:

Similarly, according to Adeoti and Osotimehin (2012),electronic payment system refers to an

Furthermore, Kalakota and Whinston (1997),sees electronic payment as a financial exchange

Micropayment system: A micropayment system is a financial transaction involving a very small

Secure Electronic Transaction (SET): Secure electronic transaction is a system of online

Mobile Phone Payments:

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