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What is a Secure Electronic Transaction SET?

Daylight, a digital banking platform that provides “Banking for LGBT+ people, by LGBT+ people,” is another example. Daylight’s offerings focus on community and empathy while addressing issues that complicate the financial lives of LGBT+ people. The Daylight card is a mobile-first account that features the individual’s chosen name, no matter what their official ID may state.

One of the biggest advantages of having online payment gateways is that businesses can operate globally and have a customer base irrespective of geographical limitations. According to research, over 56% of online shoppers prefer to shop cross-border. So implementing online payment options on your e-commerce site will undoubtedly increase sales as you will be catering for a global audience.

  1. Digital banking also offers additional conveniences, such as the ability to go cashless.
  2. The card issuer and acquirer, which may be a bank or other financial institution, both play an important role in issuing digital certificates.
  3. During this new resurgence, the SET protocol aimed to remove the prior inconveniences and enhance the overall security features.
  4. After self-authentication, the customer’s device—mobile phone, tablet, or computer—sends the purchase and payment details to the merchant.

EPayment systems introduce a host of new benefits and advantages for businesses, giving them the competitive advantage they need to stand out. Here are some of the benefits your business will see from switching to an e-Payment system. It was originally co-written by Visa and Arcot Systems (now known as CA Technologies). Similar protocols based on 3-D Secure are now used by Mastercard, Discover, and American Express.

Secure Electronic Transaction and cryptography

Mobile check deposit, which lets users cash checks from their phone, is also common. The exact amount of the transaction is debited from Jane’s checking account and a percentage of this amount, say 98%, is credited to Fresh Chain’s account. The remaining 2% is shared between Future Bank and Visa as their fee.

Mobile Accessories

Here, all parties get authentication to the transaction because SET’s certificates are backed not just by a Certificate Authority, but also by financial institutions and MasterCard International. SSL encrypts the communication channel between the cardholder and the merchant website and is not backed by any financial institution. The merchant who wants to accept certain credit card brands must process a digital certificate for trustworthiness.

The bank digitally signs and sends authorization to the merchant, who can then fill the order. Digital transactions involve the execution of multiple transactions by multiple companies, all completed in the span of a few seconds. Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest. The purpose of SSL lies in prevention of data tampering in client/server applications and has considerably weaker encryption, with a maximum of 128-bit encryption. On a larger scale, Cohee notes that we can use modern connectivity tools to create financial, social and economic change.

How do digital banks work?

UPI or Unified Payments Interface, is a real-time payment system facilitating interbank transactions. It allows users to link multiple bank accounts to a single mobile application, enabling seamless fund transfers and payments. UPI transactions are initiated through mobile apps, providing a user-friendly and efficient way to conduct digital transactions.

Meanwhile, an electronic payment platform is entirely digital, allowing approvers to authorize payments from anywhere in the world, at any time. And not only that, invoices are coded and captured in a central system, organizing invoice processing and making it easy for authorizers to approve, pay, and execute payments to suppliers. Faster electronic payments, like virtual cards, empower businesses to improve security, visibility, and efficiency all while lowering costs and saving time on manual processes. Electronic payments (ePayments) have proven to be incredibly important to streamline accounts payable processes.

Prepaid Instruments, including prepaid cards and gift cards, provide users with a convenient way to make electronic payments with a pre-loaded amount. NEFT is a nationwide electronic payment system that facilitates one-to-one funds transfer between bank accounts. It operates on a deferred settlement basis and is widely used for both individual and corporate transactions. Mobile Wallet services like Paytm, PhonePe, and Google Pay have gained widespread acceptance. Users can load money into these digital wallets and use the balance for various transactions, including mobile recharge, bill payments, and online shopping.

What are the Advantages and Benefits of an Electronic Payment System?

Privacy is preserved as the MD can’t be reversed, which would reveal the contents of the OI or PI. We’re transforming accounting by automating Accounts Payable and B2B Payments for mid-sized companies. An Electronic Payment System is defined as a mode of payment over an electronic network, such as the Internet. The Indian economy has developed at a rapid pace since the growth of e-commerce, electronic payments, and digital payments have gone a long way. Electronic payments have been rising since the implementation of demonetization and will continue to do so with the current government ensuring that these types of payments are promoted. SET, which was created expressly to address the security of all parties involved in an electronic payment transaction, uses 1024-bit encryption throughout the transaction.

Key features

Both cardholders and merchants must register with the CA (certificate authority) first, before they can buy or sell on the Internet. Once registration is done, cardholder and merchant can start to do transactions, which involve nine basic steps in this protocol, which is simplified. Electronic payments are much more efficient and safe than their traditional, paper-based counterparts.

The order information is encrypted with the merchant’s public keys, and the payment information is encrypted with the acquiring bank’s public keys. Using a hashing algorithm, SET signs electronic transactions using the sender’s private key. This produces a series of values (message digest) that “sign” a message.

Before discussing SET further, let’s see a general scenario of electronic transactions, which includes client, payment gateway, client financial institution, merchant, and merchant financial institution. Debit and Credit card usage is prevalent in India, with various banks issuing these cards for electronic transactions. Cards are commonly used for Point-of-Sale (POS) transactions, online purchases, and cash withdrawals from ATMs. E-Cash may refer to the ability to make secure onlinetransactions via credit card, cheque or money order, or itsometimes refers to a digitally encoded card that enables one topurchase items online. The money pad is a form of credit card or smart card used toprovide secure e-transactions.this is a form of electronic money which uses biometricstechnology.

Developed jointly by Visa, Mastercard, and other industry leaders, SET was created to address the need for a secure and efficient way to conduct online transactions. SET allowed parties to identify themselves to each other and exchange information securely. Electronic payments, or ePayments, are digital monetary transactions between two parties. There are a number of different factors that might inform a business’s decision to use or accept certain electronic payment types. E-payments offer a number of advantages and benefits, including cost and time savings, decreased payment processing errors, and reduced transaction costs. A digital signature is used to guarantee a message sender’s identity.

Know Your Customer (KYC) norms are enforced to verify the identity of users engaging in electronic transactions. For mobile wallets and digital payment platforms, users are required to provide specific identification documents to complete advantages of secure electronic transaction the KYC process. This ensures regulatory compliance and enhances the security of electronic payment services. SSL is an encryption mechanism for order taking, queries, and other applications and is available on the customer’s browser.

This combination of process transparency, greater control over payments, and reduction of manual tasks means that it will be easier for your AP department to identify suspicious or fraudulent activity. By contrast, accepting a paperless process with electronic payments is relatively simple. Digital payment methods have the advantage of being faster, safer, easier to collect, and less expensive to the business. By incorporating electronic payment methods into your business’s account payable process, your AP department can realize saving on every invoice.

Merchants can set up online payment gateways with minimal investment and lower transaction costs. In 2021, online retail sales totaled 4.9 trillion (in U.S. dollars) worldwide. That number is set to grow by over 50% within the next four years.[1]Statista. With this anticipated increase in online sales, keeping customers’ account information safe is of the utmost importance. Fraud, data breaches, and hacked accounts have had far-reaching fiscal and reputational impacts on financial institutions and businesses. However, implementing the SET protocol can significantly help to alleviate these issues.

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