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WELCOME

 

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E-CHEQUE

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E-CHEQUE

  Recent years have seen a tremendousincrease in e-commerce transactions. Thesuccess of e-commerce relies on developing

adequate payment technologies. One suchtechnology is e-Cheque.An e-Cheque is an

electronic document which substitutes the

paper check for online transactions. igitalsignatures !based on public keycryptography" replace handwrittensignatures.

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Definition of 'Electronic

Cheque' 

A form of payment made via the internet thatis designed to perform the same function

as a conventional paper cheque. $ecausethe cheque is in an electronic format% it canbe processed in fewer steps and has moresecurity features than a standard papercheque. &ecurity features provided byelectronic cheque include authentication%public key cryptography% digital signaturesand encryption% among others.

 

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 The e-Cheque is compatible with interactive

web transactions or with email and does notdepend on real-time interactions or on thirdparty authori'ations. (t is designed to workwith paper cheque practices and systems%with minimum impact on payers% payees%banks and the )nancial system.

*ayers and payees can be individuals%businesses% or )nancial institutions such as

banks. +- Cheques are transferred directlyfrom the payer to the payee% so that thetiming and the purpose of the payment areclear to the payee

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 The payer writes an e-Cheque bystructuring an electronic document

with the information legally required tobe in a cheque and digitally signs it.

 The payee receives the e-Cheque over

email or web% veri)es the payer,sdigital signature% writes out a depositand digitally signs it.

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 The payee,s bank veri)es the payer,sand payee,s digital signatures% and

then forwards the cheque for clearingand settlement

 The payer,s bank veri)es the payer,sdigital signature and debits the payer,saccount

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PAYER PROCESS

(n order to send a cheque% the clientsimply )lls out a standard e-cheque. The system allows clients to de)ne

common payees in order to speed thee-cheque creation process.

hen the cheque has been written itcan be easily transferred from thepayer to the payee over a secure e-cheque channel.

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 This secure channel will beestablished between the payer andthe payee before the transactionbegins.

 The e-cheque is automatically signedby the user using his private key

based on R&A algorithm and &A-/012 this ensures the authenticityand the integrity of the e-cheque

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PAYEE PROCESS

hen the payee receives the e-cheque he can open and view itusing the e-cheque system.

(n order to deposit the cheque% thepayee simply connects to the bank!which is e3pected to provide e-cheque services" and uploads the e-cheque to his bank account.

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Once the bank receives the e-cheque% it will decrypt it using the e-cheque system.

 After clearing !i.e. verifying both thecheque signature and accountbalance" with the payer4s bank% the

payee4s account will be creditedaccordingly.

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BENEFIS OF E-CHEQUE

 TO C5&TO6+R&27o physical movement of cheques so no

fear of loss of cheque in transit.

8uicker clearance2 within 9-: working days.

(ts more secured than physical cheques.

ecrease errors and fraud. eCheques reducethe potential for errors and fraud because

fewer people handle them.

 They can serve corporate markets. ;irmscan use them in more cost-e

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Benefit! to B"n#Reduce the risk associated with paper

clearing&uperior veri)cation and reconciliation

process

7o geographical restrictions

7o physical movement of cheques- itsaves cost and time for banks.

7o chance of cheque dishonor- The risk istaken care of by the accounting server%which will guarantee that the chequewould be honoured.

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ell suited for clearing micropayments

Reduce processing costs by up to =>?.+-cheques require less manpower toprocess and don4t come with anydeposit or transaction fees. As a result%

processing an e-cheque is generallymuch cheaper than processing a papercheck or credit card transaction.

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ork smarter and greener.2 +lectroniccheck conversion is easy to set up. (trelies on the trusted AC 7etwork. And

eChecks help reduce the more than=@.: million gallons of fuel used and9.= million tons of greenhouse gas

emissions created by transportingpaper checks

AC Automated Clearing ouse.

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DRA$ BAC%S

 Customer education

Chances of misuse% hacking etc

7eed a di

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*roblem could be when there is morethan one signer or endorser.

 Transactions based on internet-network failure may lead to delay inpayment.

$oth payer and payee should have e-cheque facility.

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  (n (ndia the e-cheque facility is nowreplaced by CT&- Cheque Truncation&ystem 0o/o. here there will be aphysical cheque which will beconverted into e-cheque by scanningand transferred for clearance. And

the time taken for clearance is 0:hrs.

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 TA7B

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