The document discusses a manufacturer business model and electronic payment systems presented by a group of students. It defines business models and e-commerce business models. It then covers the key components of a business model including value proposition, revenue model, market opportunity, and competitive advantage. The document also discusses electronic payment systems including e-cash, e-wallets, smart cards, and credit cards. It covers the capabilities of a B2C e-commerce model and the advantages and risks of different electronic payment methods.

1. GROUP - 05
2012
MANUFACTURER BUSINESS MODEL
&
ELECTRONIC PAYMENT SYSTEM
GROUP MEMBERS:
ABHISHEK BHATNAGAR
ABHISHEK PAL
AILZA
DHIRENDRA
SEETA PAL INSTITUTE OF BUSINESS
SARJU VERMA MANAGEMENT
22/11/2012

2. Definition
Business model
A set of planned activities designed to
result in a profit in a marketplace.
A business model is the method of doing
business by which a company can sustain
itself that is, generate revenue. The
business model spells out how a company
makes money by specifying its position in
the value chain.
2

3. Definition Cont…
 E-commerce business model

A business model that aims to use and leverage
the unique qualities of the Internet and the World
Wide Web.
It includes the roles and relationships among a
firm's customers, allies, and suppliers; the major
flows of product, information, and money; and the
major benefits to the participants.

4. Eight Key Ingredients of a Business Model
Business Model
Key Questions
Components
Value Proposition Why should the customer buy from you?
Revenue model How will you earn money?
Market opportunityWhat markets pace do you intent to serve, and what is its size?
Competitive environment Who else occupies your intended market space?
What
Competitive advantage special advantages does your firm bring to the market space?
Market strategy How do you plan to promote your products to attract customer?
Organizational What types of organizational structures within the firm are
development necessary to carry out the business plan?
What kinds of experiences and background are important for
Management team
the company’s leaders to have?

5. RE
LA
TIO
NB
Raw material ET
producer WE
EN
manufacturer B2
B AN
DB
distributor
2C
B2
B
retailer
B2 consumer
C

6. Introduction to B2C E-commerce
B2C refers to a business communicating with or selling to an individual rather
than a company
B2C
Customer
Business/organization
As the name suggests, it is the model involving business and consumers. In this
model, online business sell to individual customers. Business to customer covers
those e-commerce websites and transactions trough which organization sell
goods to customer over the internet. B2C is also known as internet retailing or E-
trailing.

7. Introduction to B2C E-commerce (Cont…)
This category has expanded greatly in the late 1990s with the growth of
public access to the Internet.
The business-to-consumer category includes electronic shopping,
information searching (e.g. railway timetables) but also interactive games
delivered over the Internet.
Popular items sold using B2C model are airline tickets, books, computers,
videotapes, music CDs,toys ,music, health and beauty products, jewellery
etc..

8. B2C e-commerce transactions
VISA credit card is
charged
Order placed
by user Shopping cart
Order Order is
form competed
Shipping carrier picks up
shipment Sent to warehouse
E-mail is sent to customer to

9. Capabilities and functionalities of B2C Model
With the conduction of business on the internet ,the role and importance of
electronic markets has been increasing. It lets increase the efficiency of
business performance .
Some of the capabilities which an electronic marketplace has, which speak
of their potential are-
1. Instantaneous communication
It helps in quick communication between the various participants of
business systems. It also helps to reduce “Time to Market”.
2. Global Access
the products and services offered through the electronic markets have
global reach and give access to larger and new markets.

10. 3. Customization
Electronic markets allows to customize or configure goods according to
user’s need .
4. Increased Availability
Since e-commerce provide access to company’s site 24/7 so there is
much greater availability of products.
5. De-intermediation
It helps in elimination the middleman, offering simplified electronic
distribution and product differentiation based on customer choice.
6. Collaboration
They facilitate automation of transactions between electronic enterprises
and support real time exchange of information and thus enable
collaborative processing.

11. Manufacturer Model - Selling
Direct
The manufacturer or "direct model", it is predicated
on the power of the web to allow a manufacturer
(i.e., a company that creates a product or service) to
reach buyers directly and thereby compress the
distribution channel.
The manufacturer model can be based on efficiency,
improved customer service, and a better
understanding of customer preferences.

14. ADVANTAGES:
Potential to earn an unlimited amount of money Be
your own boss Initial cost is fairly cheap Can receive
start-up materials for a few hundred dollars or less
Opportunities to meet new people Help you build
confidence and become more outgoing You can
lower your commuting costs Can use the internet to
increase your sales E-mail potential customers

15. DISADVANTAGES:
Promoting this type of business can be very time
consuming
This type of business is highly competitive
Unpredictable source of income

17. What Electronic Payment system is?
Electronic payment system is a system which helps the
customer or user to make online payment for their shopping.
To transfer money over the Internet.
Methods of traditional payment.
oCheck, credit card, or cash.
Methods of electronic payment.
oElectronic cash, software wallets, smart cards,
and credit/debit cards.

18. OBJECTIVES
To understand the concept of Electronic Payment System
and its security services.
To bring out solution in the form of applications to uproot
Electronic Payment.
To understand working of various Electronic Payment
System based applications.

19. Some Examples Of EPS:-
Online reservation
Online bill payment
Online order placing
Online ticket booking ( Movie)

20. Two storage methods
On-line
Individual does not have possession personally of
electronic cash
Trusted third party, e.g. online bank, holds customers’
cash accounts
Off-line
Customer holds cash on smart card or software wallet
Fraud and double spending require tamper-proof
encryption

21. E- CASH E- WALLETS
EFT
(Electronic
Fund
Transfer)
Types of EPS
SMART CARDS CREDIT CARDS

22. E-Cash
A system that allows a person to pay for goods or services by
transmitting a number from one computer to another.
Like the serial numbers on real currency notes, the E-cash
numbers are unique.
This is issued by a bank and represents a specified sum of real
money.
It is anonymous and reusable.

23. Electronic Cash Security
Complex cryptographic algorithms prevent double
spending
Anonymity is preserved unless double spending is
attempted
Serial numbers can allow tracing to prevent money
laundering

24. E-Cash Processing
Merchant
1. Consumer buys e-cash from Bank
2. Bank sends e-cash bits to consumer
(after charging that amount plus fee)
5
4
3. Consumer sends e-cash to merchant
Bank 3
4. Merchant checks with Bank that e-cash
is valid (check for forgery or fraud)
2 5. Bank verifies that e-cash is valid
1
6. Parties complete transaction
Consumer

25. E-Wallet
The E-wallet is another payment scheme that operates
like a carrier of e-cash and other information.
The aim is to give shoppers a single, simple, and
secure way of carrying currency electronically.
Trust is the basis of the e-wallet as a form of electronic
payment.

26. Procedure for using an e-wallet
1. Decide on an online site where you would like to shop.
2. Download a wallet from the merchant’s website.
3. Fill out personal information such as your credit card number,
name, address and phone number, and where merchandise
should be shipped.
4. When you are ready to buy, click on the wallet button, the buying
process is fully executed.

27. Smart Cards
A smart card, is any pocket-sized card with embedded
integrated circuits which can process data
A smart card is about the size of a credit card, made of a
plastic with an embedded microprocessor chip that holds
important financial and personal information.
This implies that it can receive input which is processed and
delivered as an output

28. Smart card Processing :

29. Advantages of smart cards
 Stored many types of information
Not easily duplicated
Not occupy much space
Portable
Low cost to issuers and users
 Included high security

30. Disadvantages of smart cards
The lack of universal standards for their design and
utilization.
 On the other hand, smart card applications are
expected to increase as a result of the resolution of
these disadvantages in the near future.

31. Credit cards
 It is a Plastic Card having a Magnetic Number and code on it.
 It has Some fixed amount to spend.
 Customer has to repay the spend amount after sometime.

32. Processing a Credit cards payment

33. Risk in using Credit cards
 Operational Risk
Operational risk is the risk of loss resulting from
inadequate or failed internal processes, people and systems, or from
external events.
 Credit Risk
Credit risk refers to the risk that a borrower will default on
any type of debt by failing to make payments which it is obligated to
do .
The risk is primarily that of the lender and include lost principal
and interest, disruption to cash flows, and increased collection
costs.
 Legal Risk
Legal risk is a type of risks that means that a counterparty
is not legally able to enter into a contract.

34. EFT(Electronic Fund Transfer)
Electronic funds transfer is one of the oldest
electronic payment systems.
EFT is the groundwork of the cash-less and check-
less culture where and paper bills, checks,
envelopes, stamps are eliminated.
EFT is used for transferring money from one bank
account directly to another without any paper money
changing hands.

35. Advantages of EFT contain the
following:
Simplified accounting
Improved efficiency
Reduced administrative costs
Improved security

36. Online Banking
Types of Transactions: You may access certain
account(s) you maintain with us by computer using
your assigned user ID and password by accessing
the online banking services. You may use the online
banking service to perform the following functions:
Transfer funds between eligible accounts.
Obtain balance information on eligible accounts.
Review transactions on eligible accounts.
Make loan payments.

37. Risks in Electronic Payment
Systems:
Tax Evasion
Businesses are required by law to provide records
of their financial transactions to the government so
that their tax compliance can be verified. Electronic
payment however can frustrate the efforts of tax
collection. Unless a business discloses the various
electronic payments it has made or received over the
tax period, the government may not know the truth,
which could cause tax evasion.

38. Risks in Electronic Payment
Systems:
Fraud
Electronic payment systems are prone to fraud. The
payment is done usually after keying in a password and
sometimes answering security questions. There is no
way of verifying the true identity of the maker of the
transaction. As long as the password and security
questions are correct, the system assumes you are the
right person. If this information falls into the possession of
fraudsters, then they can defraud you of your money.

39. Risks in Electronic Payment
Systems:
Impulse Buying
Electronic payment systems encourage impulse
buying, especially online. You are likely to make a
decision to purchase an item you find on sale online,
even though you had not planned to buy it, just
because it will cost you just a click to buy it through
your credit card. Impulse buying leads to
disorganized budgets and is one of the
disadvantages of electronic payment systems.

40. Risks in Electronic Payment
Systems:
Payment Conflict
Payment conflicts often arise because the payments
are not done manually but by an automated system
that can cause errors. This is especially common
when payment is done on a regular basis to many
recipients. If you do not check your pay slip at the
end of every pay period, for instance, then you might
end up with a conflict due to these technical glitches,
or anomalies.

41. Secure Electronic Transaction
(SET) Protocol
 Jointly designed by MasterCard and Visa with backing of Microsoft,
Netscape, IBM, GTE, SAIC, and others
 Designed to provide security for card payments as they travel on the
Internet
 Contrasted with Secure Socket Layers (SSL) protocol, SET validates
consumers and merchants in addition to providing secure transmission
 SET specification
 Uses public key cryptography and digital certificates for validating both
consumers and merchants
 Provides privacy, data integrity, user and merchant authentication, and
consumer nonrepudiation

42. Cryptography

43. The SET protocol

44. Security Requirements of EPS
Integrity Privacy
Safety
Authentication

45. What Is payment Gateways??
A payment gateway is an e-commerce application service provider service
that authorizes payments for e-businesses, online Shopping, etc.
Payment gateway protects credit cards details encrypting sensitive
information, such as credit card numbers, to ensure that information passes
securely between the customer and the merchant and also between
merchant and payment processor.

46. CONCLUSION
 Expand Market beyond Traditional geographic market
 Override traditional marketing system into digital
marketing system.
 Made human life convenient as a person can pay his
payments online while he is taking rest.

47. Thanks For
Coordination