Electronic purse

Electronic purse - it is a mechanism that allows end users to pay electronically for goods and services. The functions of the electronic purse is to maintain a pool of value that is incrementally reduced as transaction performed . Electronic purse is an electronic system e-commerce, based on smart card. Electronic purse must ensure the security of each transaction .

Advantages of electronic purse

The advantages of the electronic purse are summarized as below :

• Authentication of the purse by the issuer - authentication of the purse by the issuing institution, which is not necessarily a banking institution, can be done either online or offline.Online authentication uses a secret key shared between the issuer of the purse and the smart card of the purse itself. This key allows the derivation of a common session key that will serve to compute the MAC to protect the integrity of the data exchanges and to encrypt the authentication data.Offline authentication uses RSA-based hierarchical certificates for mutual authentication and for the exchange of a temporary session key next between the chip card and the terminal
• Loading of value - Loading the purse with value depends on whether the purse is linked to a bank account. If the purse is linked to a bank account, the conversion of the monetary value to a dematerialized from stocked in the purse in under direct control of the holder's bank. Authentication of the card, verification of the holder's identity on the basis of a PIN, and authorization of the transaction can be done at once. The exchanges involve the card, the load device, and the authorization server of the issuing bank. The purse is not linked to a bank account when the line of credit is from a totally separate account or if it entails a revolving credit. In these cases, the risk of error or fraud increases and the authentication is more complex. The communication protocol must verify the integrity of the value transfer from the client's bank (or from that of the purse issuer) to the acquirer bank in addition to the authenticity and the identity of the cardholder and of the card that the holder presents.
• Point-of-sale transactions - the protocol for point-of-sale payments defines procedure for offline reciprocal authentication of the purse and the point-of-sale terminal. This protocol conforms to the EMV specifications and cover single transactions as well as a series of periodic transactions (such as the payment for service bills). The terminal can authenticate the card with the public certificates of the card issuer and of the issuing bank.

Examples of Electronic purse

• Apple Pay: Apple Pay is a mobile payment and digital wallet service by Apple Inc. that lets users make payments using an iPhone, Apple Watch, iPad or Mac. It is available in countries such as the US, UK, and Canada. Apple Pay works with credit and debit cards from major banks and card providers, and is designed to work with the existing contactless payment infrastructure.
• Samsung Pay: Samsung Pay is a mobile payment and digital wallet service by Samsung Electronics that lets users make payments using a compatible Samsung device such as a Samsung Galaxy smartphone or tablet. It is available in countries such as the US, UK, and South Korea. Samsung Pay works with credit and debit cards from major banks and card providers, and is designed to work with the existing contactless payment infrastructure.
• Google Pay: Google Pay is a mobile payment and digital wallet service by Google that lets users make payments using an Android device. It is available in countries such as the US, UK, and India. Google Pay works with credit and debit cards from major banks and card providers, and is designed to work with the existing contactless payment infrastructure.
• PayPal: PayPal is an online payment system that lets users make payments, transfer money, and accept payments without sharing their financial information. It is available in countries such as the US, UK, and Australia. PayPal works with major banks and card providers, and is designed to work with the existing online payment infrastructure.

Limitations of Electronic purse

An electronic purse has some limitations, such as:

• Limited availability - The use of electronic purses is still limited, as it is not accepted by all merchants and retailers. Therefore, users may find themselves without a payment method if electronic purses are not accepted.
• Security concerns - Electronic purses are susceptible to security issues, as the data stored in them is vulnerable to cyber-attacks. Therefore, users must take extra precautions to ensure the security of their electronic purses.
• Cost - The cost of using electronic purses may be higher than using traditional payment methods, as users must pay transaction fees and other related costs.
• Lack of anonymity - Electronic purses can be tracked, and the transactions are not anonymous. Therefore, users must be aware of their privacy when using this kind of payment method.

Other approaches related to Electronic purse

Introducing other approaches related to Electronic purse:

• Mobile Payment: Mobile payment is an alternative to the traditional form of payment, usually cash or card payment, which uses a mobile device as a payment method. Mobile payment can be used to purchase goods or services from any location, either online or in-store.
• Contactless Payment: This is a form of payment that does not require physical contact between the customer and the merchant. It uses radio-frequency identification (RFID) or near field communication (NFC) technology, which allows customers to make payments by simply tapping their payment card or device, such as a smartphone, on a contactless payment terminal.
• NFC Payment: NFC, or Near Field Communication, is a form of contactless payment technology. It enables two devices, such as a smartphone and a payment terminal, to exchange data over a short distance. This allows customers to make payments by simply tapping their NFC-enabled device on a payment terminal.

In conclusion, while the Electronic Purse is a mechanism that allows end users to pay electronically for goods and services, there are other approaches such as mobile payment, contactless payment, and NFC payment which use different technologies to facilitate secure payments.

Electronic purse — recommended articles

Digital cash — Acquiring bank — Business correspondent — EDI systems — Taaps — E-commerce — Cash Transaction — E hub — Collecting bank

References

• HIMSS (2010), Dictionary of Healthcare Information Technology Terms, Acronyms and Organizations Second Edition, HIMSS Mission, Chicago, p.45
• Sherif M.H (2016), Protocols for Secure Electronic Commerce Third Edition, Publishing house CRC Press, Boca Raton, p. 309
• Singh N.K. (2013), Using Event-B for Critical Device Software Systems, Publishing house Springer, London, p.34
• Vadlamani R. (2008), Advances in Banking Technology and Management: Impacts of ICT and CRM, Publishing house IGI Global Information Science Reference, New York, p.76-77

Footnotes

Author: Aldona Pająk

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