PROPERTIES OF E-MONEY

ACID TEST

ATOMICITY CONSISTENCY ISOLATION DURABILITY

ATOMICITY

• Transaction must occur completely or not at all.

• No points of failure.

• A transfer of 100 must result in amount credited from account & debited to another.

• If one action fails, the whole transaction should be aborted.

CONSISTENCY

• All parties involved in the transaction must agree to the exchange

• In a customer-retailer relationship involving purchase, the customer must agree to purchase good for specific price & merchant must agree to sell it at that price, otherwise there is no basis for exchange.

• Before X buys a product from Y, X must agree to buy it for 100 and Y must agree to sell it at 100.

ISOLATION

• Each transaction must be independent of any other transaction.

• Each transaction is treated as a stand-alone episode

DURABILITY

• It must always be possible to recover the last consistent state or reverse the facts of the exchange.

• Reversing charges in the event customer changes his or her mind.

• If customer is not happy with the product, the merchant should refund him.

ICES TEST

INTEROPERABILITY CONSERVATION ECONOMY SCALABILITY

INTEROPERABILITY

• It is the ability to ove back nd forth between different operating systems.

• Whichever operating system or version customer is using , he should not find any discomfort in using e-money.

CONSERVATION

• How well money holds its value over time. ( temporal consistency)

• How easy money is to store and access. ( temporal durability)

ECONOMY

• Cost of processing the transaction should be zero or minimum.

• Relative to size of transaction.

• If the users have to pay a higher transaction cost they may switch to other payment product or prefer cash where processing cost is zero.

• Paying charge of 10 to process 10,0000 transaction is acceptable.

• However, it is not acceptable if the transaction being processed is of 10.

SCALABILITY

• Ability of the system to handle multiple users at the same time.

• Must be easily scalable to handle new intake.

Evaluation of Payment Methods on ACID & ICES

• There is no method of e-money or e-payment that satisfies both ACID and ICES test.

• Cash does not satisfy the conservation property of ACID test. It loses its value over a period of time due to inflation.

• Credit card & debit card do not satisfy economy property of ICES. The processing cost generally is higher.

• Cheques do not fulfil the isolation property of ACID test because drawer of the cheque can always stop the payment of cheque before it is cleared.

• Cheques do not fulfil conservation and economy property of ICES test

Evaluation of Payment Methods on ACID & ICES

Other Properties of E-Money

SECURITY

• Proper authentication and encryption rules

ANONYMITY

• System must protect the identity of buyers and sellers over the open network.

EASE OF USE AND Interactive interface

• Making payment online should be as easy as offline

• Interface should be user friendly.

Wide Acceptability

• Should be widely acceptable across all transactions all the time.

Integration

• Payment system should work across all operating systems.

TYPES OF E-MONEY

Buyer is clearly identified

Card is validated by issuing bank

Credit/debit card

IDENTIFIED & ONLINE

Merchant verifies the identity of buyer through I-card

Transaction is carried offline

Payment made by cheque

IDENTIFIED & OFFLINE

TYPES OF E-MONEY

Identity of person is anonymous

Though, payment is made online.

Metro card

ANONYMOUS & ONLINE

Identity of person is anonymous

Transaction is carried offline

Using a credit card at merchant who does not have online connection to Visa/ Maser Card network.

ANONYMOUS & OFFLINE