9.6 Conclusions

In the recent past, the growing importance of e-commerce and e-commerce applications has resulted in the design and development of many different and partly incompatible electronic payment systems. In this chapter, we overviewed and briefly discussed some electronic cash systems, electronic checks, electronic credit-card payments, and micropayment systems.

From an academic point of view, the design and development of electronic payment systems is an interesting and challenging field of study. That s why we have a big variety of complementary or competing systems. From an application developer s point of view, however, this variety is very uncomfortable, because it requires that a specific application supports many systems. Furthermore, the application must be developed in a way that allows future systems to be supported with an effort that is as small as possible.

Against this background, one may hope that a certain degree of convergence will occur in the industry (where systems that address the same needs will compete and one will emerge as victor ). As with any payment system, a major factor in its success is consumer trust and acceptance. Any system backed by big- name banking organizations or indeed the banking industry as a whole will easily build this level of consumer trust and acceptance. Consequently, it was hoped that SET would emerge as a standard way of doing credit-card payments over the Internet.

Unfortunately, reality has shown a different story and SET is still not widely deployed today. Contrary to SET, it is possible and very likely that the FSTC eCheck system will be the electronic check system of choice in the financial world. With regard to electronic cash systems and micropayment systems it is very difficult to predict the future.

In addition to the electronic payment systems mentioned in this chapter, there is also a trend in the industry to have payment systems depend on the security features of some complementary networks. For example, mobile networks are widely deployed in Europe. These networks generally implement some strong authentication technologies. This is particularly true for GSM networks. Consequently, GSM networks and their services ”such as the short messaging service (SMS) ”provide an interesting infrastructure to implement electronic payments and to charge GSM subscribers accordingly . For example, the Paybox system ^[14] works this way and is widely deployed in Germany. Payment systems like Paybox are particularly important for mobile commerce (m-commerce) and mcommerce applications.

Last but not least, there are also some banking and other regulations pertaining to handling electronic payments. For example, who is authorized to issue electronic money? Can every bank issue its own currency and mint its own digital coins ? If so, how is fraud prevented, and who s in charge of monitoring the banking operations to protect the customers? Note that conventional payment instruments have, in the past at least, been operated by banks who are subject to regulation by their national central bank. Typically, a bank must be licensed to operate , and in the course of obtaining this license, will subject itself to scrutiny. As of this writing, it is not clear what regulations should be imposed on electronic payment systems, and how the above-mentioned concerns should be addressed.

^[14] http://www.paybox.de