An analysis and comparison of different types of electronic payment systems

Two parties that conduct a business transaction through the Internet do not see each other face-to-face; nor do they exchange any document or currency hand-to-hand. When electronic money is transferred from a buyer to a seller over telecommunications networks, accuracy and security is critical. This paper explores the advantages and limitations of four types of electronic payment systems: namely, the online credit card payment system, the electronic-cash payment system, the electronic-check payment system, and the smart-card-based electronic-cash payment system. Each payment system was assessed from four perspectives: the technological aspect, the economic aspect, the social aspect, and the regulatory aspect. The requirements of merchants and consumers, the appropriate business environments for each of them to function, and the potential for future expandability were analyzed. The findings of this research could be useful for companies who are planning to adopt or to devote R & D into an electronic payment system.