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Synopsis Submitted by




(Affiliated to Osmania University, Hyderabad)













The online system also very common on internet, it works by their retail, credit union, and
virtual bank by secure the website to carry out the financial transaction by customers. Some
online goods and services are still infancy and going innovations build through the internet
growing rapidly as a marketplace for the exchange of both tangible and information goods
and services. Besides online marketing and internet usage are growing to be more advanced.
Paying is not definitely paper currency on the transaction, because the transaction going
substituent with the online payment system or the card. Multitudinous payment mechanisms
suitable for use in this marketplace are in several stages of development. This research
project’s scope is limited to online payment systems which focused on the needs of

As in usually the case with payment innovations, the success of the smart card will depend on
market circumstances and cooperation among the banks. The proper timing of the
introduction may depend on consumer readiness to use the new system, which will itself be
largely due to prior experience and innovativeness (Andreasen, 1991). The Numerous
Payment Systems have been pervasion on the marketplace, the new system prepared to accept
by better consumers. To the level that consumers have experience with previous systems, the
responsiveness and information of a new payment system will be facilitated.

Lastly , this research project is a key of understanding of consumer behavior and their
payment choices, and also the factors that influence the consumer choose to use
onlinepayment. Moreover, this research project oration the usage of the online payment
system provided a brief literature review on online payment and purpose to explain the
determinants which affect the usage of users towards online payment system.

In late 1970s technology such as Online Data Interchange (EDI) and Online Funds Transfer
(EFT) to promote onlinecommerce transactions, authorized to operate in order to promote,
such as purchase orders or invoices for online business documents. In 1979, Michael Aldrich
contrived a technique as onlinecommerce; the technique was about online shopping to allow
consumers and business through online transaction processing to shop from home and to
trade with other business. In 1980s the enlargement and receipt of credit cards, automated
teller machines (ATM) and telephone.
The first ATM’s machines use of magnetically prearranged plastic, the money could not
automatically withdraw from users’ accounts were off-line machines. So the customer would
perhaps be apprehensively to let a machine handle their money. But the cards used an
encoded magnetic strip, making them safe and reusable. Consequently, just the only
customers with good credit history were able to use ATMs. Therefore nowadays the ATM
industry Association states that there will 1 billion of users using this transaction in ATMs.
Almost 80 percent belong to the private sectors (Commercial Union ATM, 2000).

Despite the rapid development of online payment systems, innovative services, but still faces
some challenges. Business onlinemarkets as herald fundamental changes in the source and
the computer-assisted alternative to existing market arrangements for trading in practice
(Malone et al., 1989). Areas of impact include online catalogues, multimedia mail, online
payment, brokering services and collaborative engineering. Initial implementations of online
commerce have focused on the provision of telecommunications-based infrastructure in
support of Internet-oriented services and online payment systems (Kohala Coast, HI 2009).

Online payment systems should offer at least as much confidentiality as traditional payment
systems currently do. The goal of this requirement is that payment data should not be
exploitable in order to obtain more precise or more comprehensive information about
involved entities example payer profiles. Thus, confidentiality properties of online payment
systems can be distinguished regarding which information they reveal to which parties.
Confidentiality of payment information against other parties can be achieved by encrypting
communication which is no specific property of payment systems. Note that confidentiality in
online payment systems cannot prevent information flows which may happen outside an
online payment system among involved parties for example by observing communication
networks, or revealing data in further commercial interactions (Fiat, Naor 1990).

1. Cheng, Hamid and Cheng(2009) suggested five perceived risks. Physical,

performance, psychological, financial and time loss”. Physical risk was then described
as a cashless or card loss , Performance indicates a risk that gains additional charges
when utilized, Psychological risk was examined as a risk that if a mode of payment is
made will affect the perceived image of the user, Time loss risk means it will take
more of the time than the alternative mode of payment and finally financial risk which
was described as loss meaning if the mode of payment that if used will cause financial
loss and might not be refundable or reversible.
2. Srinivasan (2013) stated that success of an onlinebusiness rests on many factors. He
defined trust is something that an e business must strive to achieve over a period of
time. The author suggested some contributing factors for gaining customer trust are:
appeal of the Web site, product or service offerings, branding, quality of service and
trusted seals. Trust can be viewed from many angles such as transaction, information
content, product, technology and institution. This paper analyses the role of trust from
the transaction perspective and highlights the things that an onlinebusiness could do
for building customer trust. Factors contributing to trust are not easy to measure. It is
developed over time. People trust a business based on their own past experience as
well as by third party recommendations. He concluded that the onlinebusinesses are
accessible from anywhere at any time, there are additional impediments in building
and maintaining trust. The limitation of this paper is that it did not focus much on how
a company can enhance the security when doing online commerce.
3. Toñita Perea y Monsuwé, Benedict G.C. Dellaert, Ko de Ruyter (2004) proposed
a framework to increase researchers‘understanding of cons mers‘ attitudes toward
online shopping in US and Europe and their intention to shop on the Internet. The
framework uses the constructs of the Technology Acceptance Model (TAM) as a
basis, extended by exogenous factors and applies it to the online shopping context.
The review shows that attitudes toward online shopping and intention to shop online
are not only affected by ease of use, usefulness, and enjoyment, but also by
exogenous factors like consumer traits, situational factors, product characteristics,
previous online shopping experiences, and trust in online shopping.7
4. Abdul Naveed Tariq (2009) a study on ―Assessing the impact of tr
st and security factors on cons mers‘willingness for online shopping among the urban
Moroccans. This study attempts to examine the c stomers‘willingness to shop online
by taking into account demographic factors as well as trust and security-related
factors. A logistics regression analysis was demonstrated and the findings indicate
that the customers‘ willingness to shop online is explained by age, trust, security,
awareness and piracy factors. The findings of the study also indicates that majority of
the respondents intend to shop online. The research outcomes are undoubtedly useful
for both the government and online vendors for better understanding online shoppers.
The study also facilitates policy-makers to set and develop a better online shopping
infrastructure with the technological competitive advantage for both online vendors
and consumers.8
5. Baten and Kamil (2001) determined the economic prospects of ebanking as well as
demonstrating the scope and benefits of onlinepayments in Bangladesh. 9 Salehi and
Alipour examined onlineand onlinepayments in an emerging economy seeking to
provide empirical evidence fromindia. 10 James used Statistical Package for Social
Sciences (SPSS) to investigate the acceptance of Onlinein Nigeria. The result shows
that acceptance of is significantly influenced by Age, Educational Background,
Income, Perceived Benefits, Perceived Ease of Use, Perceived Risk and Perceived
Enjoyment. 11

Online payment refers to the mode of payment which does not include physical cash or
cheques. It includes debit card, credit card, smart card, onlinewallet etc. ONLINEcommerce
has its main link in its development on–line in the use of payment methods, some of which
we have analysed in this work .The risk to the online payments are theft of payments data,
personal data and fraudulent rejection on the part of customers. Therefore, and until the use
of online signatures is wide spread, we must use the technology available for the moment to
guarantee a reasonable minimum level of security on the network. With respect to the
payments methods they have been analysed in this work, it is impossible to say that any one
of them is perfect, although each one of them has advantages as opposed to others. If the
client wants to maintain privacy, then they choose those payment methods which guarantee a
higher level of privacy such as ONLINEcash or Net Bill Checks. If the priority is security,
they should use, Smart Cards. Both consumers and service providers can benefit from
onlinepayment systems leading to increase national competitiveness in the long run. The
successful implementations of online payment systems depends on how the security and
privacy dimensions perceived by consumers as well as sellers are popularly managed , in turn
would improve the market confidence in the system.


The following objectives have been set for this study:

1. To review the progress of online payment system in India.

2. To evaluate the difficulties faced by Indian banks to create infrastructure for online
payment system in India.
3. To study the security measures undertaken by Indian banks for the safety of online
payment system.
The present study is of analytical and exploratory nature. Accordingly, the use is made of
primary data. The primary data is collected with the help of questionnaires from a sample of
respondents (100 bank officers and 200 customers) from Hyderabad using the online payment
services provided by the various branches of HDFC BANK.
The key intention of the study is to evaluate the security and infrastructure measures of online
banking adopted so far. Therefore main objective of the study is evaluation of online payment
measures adopted in nationalized banks with reference to Hyderabad.
 Primary data: this is first hand information is collected from the respondents
associated with selected banks. Structured questionnaire prepared by the researcher
and it is filled up by 200 bank customers and 100 bank officers.
Respondents‘responses are collected from Hyderabad


1. To create awareness about various methods of online payment systems.

2. To create awareness about various frauds of online payments.
3. To motivate people to use online payments systems.
4. To make online payments safe and secure.

1. Study is limited to Hyderabad city only.

2. Which criteria exist for evaluation of online payment systems?

3. Which other criteria can be adopted to evaluate online payment systems?
4. Is there kept a history of the money transactions data conducting through the online
payment systems?
1. Cheng, A. y., Hamid, N. R. A. and Cheng, E. H. Risk perception of the
ONLINEpayment systems: a young adult perspective. 7, 2009
2. S. Srinivasan, Role of trust in e‐business success, Information Management &
Computer Security, Vol. 12 Iss: 1, pp.66 – 72, 2013
3. Toñita Perea y Monsuwé, Benedict G.C. Dellaert, Ko de Ruyter, What drives
consumers to shop online? A literature review, International Journal of Service
Industry Management, Vol. 15 Iss: 1, pp.102 – 121, 2004
4. Abdul Naveed Tariq, BadrEddaoudi, Assessing the impact of trust and security
factors on cons mers‘ willingness for online shopping among the urban Moroccans,
International Journal of Business & Management Science, Vol.2, Issue 1, pp. 17- 32,
5. MA Baten, AA Kamil, Onlineof economical prospects in Bangladesh, Journal of
Internet Banking and Commerce 15 (2), 1- 10., 2010