APPROVAL OF ACCEPTENCE

This project written by K. M Salman Rahman (Student Id: 201603097) entitled “Study on Digital Payment
System” is submitted to PMSCS program, Department of Computer Science and Engineering,
Jahangirnagar University in partial fulfillment of the requirement for the degree of Masters of Science in
Computer Science. This project has been done under the supervision of professor Dr. Md. Humayun
Kabir, Department of Computer Science and Engineering, Jahangirnagar University.

We have examined this report and recommended its acceptance.

---------------------------------------------------------

Professor Dr. Md. Humayun Kabir

Supervisor and 1st Examiner

Department of Computer Science and Engineering

Jahangirnagar University

Savar, Dhaka, Bangladesh

---------------------------------------------------------

Professor Liton ude Rozario

2nd Examineer

Department of Computer Science and Engineering

Jahangirnagar University

Savar, Dhaka, Bangladesh

Accepted by

---------------------------------------------------------

Professor Dr. Md. Abul Kalam Azad

Coordinator, PMSCS Program

Department of Computer Science and Engineering

Jahangirnagar University

Savar, Dhaka, Bangladesh

 ACKNOWLEDGEMENT
This project was complemented under the supervision of Dr. Md. Humayun Kabir, Professor,
Department of Computer Science and Engineering, Jahangirnagar University, Savar, Dhaka. First and
foremost, I wish to acknowledge our profound indebtedness to him for his guidelines, valued consent,
encouragement and cordial cooperation.

I wish to thank to all of my respected teachers of Computer Science and Engineering Department,
Jahangirnagar University, Savar, Dhaka, for their valuable academic help during the course work. I would
like to thank those people who provide me new ideas and support at various moments during the work
of this project and helping me in every phase of this project.

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Abstract
Abstract—The purpose of this paper is to contribute to the design of e-wallets for Bangladesh, an
Electronic Payment System (ETS). E-wallets are intended to replace the existing physical wallet, with its
notes, coins, plastic cards, ATM cards and loyalty cards etc. Now a day, the challenges of payment
transactions were initially underestimated. Business via the internet and mobile telephony has so far
been dominated by the methods of payment systems in traditional business. However, in light of
advances in technology, traditional business models are increasingly coming up against their limits. e-
wallet is a convenient, easy-to-use, secure payment system. It is flexible “Electronic payment system”
with a number of payout and pay-in options via bank account and Credit/Debit cards.

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Table of Contents
Abstract.......................................................................................................................................................0
Chapter1: Introduction.................................................................................................................................2
1.1 Motivation for this Project.................................................................................................................3
1.2 Objective...........................................................................................................................................3
1.3 Outlines.............................................................................................................................................4
Chapter 2: Digital Payment Overview........................................................................................................4
2.1 Advantages of digital payment..........................................................................................................4
2.2 Disadvantages of Digital Payment.....................................................................................................6
Chapter 3: Digital payment methods...........................................................................................................7
3.1 Credit Payment System......................................................................................................................7
3.2 Cash Payment System........................................................................................................................7
Chapter 4: Tools and Techniques of Digital Payment.................................................................................8
Digital Payment Technology in Bangladesh.............................................................................................8
4.1. Banking cards:..................................................................................................................................8
4.2 SMS Banking....................................................................................................................................9
4.3 USSD Mobile....................................................................................................................................9
4.4 Mobile Banking.................................................................................................................................9
4.3.1 Bkash........................................................................................................................................10
4.3.2 SureCash...................................................................................................................................10
4.3.3 UCash.......................................................................................................................................10
4.3.4 Rocket.......................................................................................................................................10
4.5. Bank pre-paid cards........................................................................................................................11
4.5 PoS Terminals.................................................................................................................................11
4.6 Internet Banking..............................................................................................................................11
4.8 International Payment Technology..................................................................................................12
4.8.1 Paypal.......................................................................................................................................12
4.8.2 Payza........................................................................................................................................12
4.8.3 Payoneer...................................................................................................................................12
4.9 Digital Payment Platform................................................................................................................13
Chapter 5: Architecture of E-Wallet..........................................................................................................15
5.1 Payment processing flow.................................................................................................................17
5.2 E-Wallet network.............................................................................................................................18

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 5.3 National Payment Switch.................................................................................................................18
5.4 Necessity of E-Wallet.......................................................................................................................19
5.5 Technology in E-Wallet....................................................................................................................20
5.6 SWAPEROO Architecture.................................................................................................................20
5.7 Technical details..............................................................................................................................21
Chapter 6: Digital Payment Security and Reliability.................................................................................24
6.1 Be careful of what you install in your phone...............................................................................24
6.2 Update to the latest software.........................................................................................................25
6.3 Activate basic security measures..................................................................................................25
6.4 Make the most of two-factor authentication................................................................................25
6.5 Swipe only at trusted POS systems...............................................................................................25
Chapter 7: Implementation and Interface of my Project............................................................................26
7.1 Feature of my project.......................................................................................................................27
7.1.1 Account Registration................................................................................................................27
7.1.2 Payment to merchant wallet....................................................................................................27
7.1.3 Check Statement.......................................................................................................................29
7.1.4 Wallet deposit...........................................................................................................................29
7.1.5 Cash Out...................................................................................................................................30
7.2 Platform to develop this project......................................................................................................31
Conclusion.................................................................................................................................................31
References.................................................................................................................................................32

Chapter1: Introduction
A number of electronic commerce applications allow end-users to purchase goods
and services using digital wallets. Once a user decides to make an online purchase,
a digital wallet should guide the user through the transaction by helping him or her
choose a payment instrument that is acceptable to both the user and the vendor, and
then hide the complexity of how the payment is executed. A number of wallet
designs have recently been proposed, but we will argue they are typically targeted
for particular financial instruments and operating environments. In this paper, we
describe
a wallet architecture that generalizes the functionality of existing wallets, and
provides simple and crisp interfaces for each of its components. In particular, the
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architecture we propose here has the following features. Existing proposals have
some of these features, but we believe that none provides all of them in a
comprehensive way. Extensible. A wallet should be able to accommodate all of the
user’s different payment instruments, and inter-operate with multiple payment
protocols. For example, a digital wallet should be able to "hold" a user’s credit
cards and digital coins, and be able to make payments with either of them. As banks
and vendors develop new financial instruments, a digital wallet should be capable of
holding new financial instruments and making payments with these instruments. For
instance, vendors should be able to develop electronic coupons that offer discounts
on products without requiring that users install a new wallet to hold these coupons
and make payments with them. Similarly, airlines should be able to develop
frequent-flyer-mile instruments so that users may pay for airline tickets with them.

1.1 Motivation for this Project

The digital revolution continues to transform most aspects of our daily life.
An e-payment system is a way of making transactions or paying for goods and
services through an electronic medium, without the use of checks or cash. It’s also
called an electronic payment system or online payment system
Some of applications of using digital payment services are:
1. Buying bus-train-air ticket throw online
2. Buying admission Form from online and payment of exam fees at online
3. Payment utility bill like current, water, gas bill
4. Credit receiving and payment by online banking
5. Purchase product from E-Commerce site and payment using digital wallets.

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1.2 Objective
Now a day, the challenges of payment transactions were initially underestimated.
Business via the internet and mobile telephony has so far been dominated by the
methods of payment systems in traditional business. However, in light of advances
in technology, traditional business models are increasingly coming up against their
limits. e-wallet is a convenient, easy-to-use, secure payment system. It is flexible
“Electronic payment system” with a number of payout and pay-in options via bank
account and Credit/Debit cards.

1.3 Outlines
This paper refers Digital payment overview in Chapter 2, Digital Payment method
in chapter 3, Tools and techniques of digital payment in chapter 4, Architecture of
E-Wallet in chapter 5, Digital payment security and reliability in chapter 6,
implementation and interface of my demo project.

Chapter 2: Digital Payment Overview

The emergence of e-commerce has created new financial needs that in many cases
cannot be effectively fulfilled by the traditional payment systems. The advent of
the Electronic commerce has prompted the invention of several payment tools to
facilitate the completion of business transactions over the Internet. There are
different methods to pay electronically. Recognizing this, virtually all interested
parties are exploring various types of electronic payment system and issues
surrounding electronic payment system and digital currency. Broadly electronic
payment systems can be classified into four categories: Online Credit Card
Payment System, Online Electronic Cash System, Electronic Cheque System and
Smart Cards based Electronic Payment System. Each payment system has its
advantages and disadvantages for the customers and merchants. These payment
systems have numbers of requirements: e.g. security, acceptability, convenience,
cost, anonymity, control, and traceability. Therefore, instead of focusing on the
technological specifications of various electronic payment systems

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 2.1 Advantages of digital payment
I. An electronic wallet is a program or web service that allows users to store
and control their online shopping information, like logins, passwords, and
shipping address service directly from our bank account, transfer money to
others (e-wallet users), issuing e-checks, e-cash, e-pay-order etc.
II. We also link our credit/debit card; use them through e-wallet. e-wallet must
be connected to National payment switch for getting more benefits.
III. e-wallets allow us to keep track of our billing and shipping information.
IV. The most common example of e-wallet system is Paypal. It is a fast way to
pay and get paid online. Paypal allows people to send money without
sharing financial information. People also have the flexibility to pay using
their account balances, bank accounts, and credit cards.
V. Faster, easier, more convenient: Perhaps, one of the biggest advantages of
cashless payments is that it speeds up the payment process and there is no
need to fill in lengthy information. There is no need to stand in a line to
withdraw money from an ATM or carry cards in the wallet. Also, with the
move to digital, banking services will be available to customers on a 24/7
basis and on all days of a year, including bank holidays. Many services like
digital wallets, UPI, etc, work on this basis.
VI. Economical and less transaction fee: There are many payment apps and
mobile wallets that do not charge any kind of service fee or processing fee
for the service provided. The UPI interface is one such example, where
services can be utilized by the customer free of cost. Various digital
payments systems are bringing down costs.
VII. Waivers, discounts and cashbacks: There are many rewards and discounts
offered to customers using digital payment apps and mobile wallets. There
are attractive cash back offers given by many digital payment banks. This
comes as boon to customers and also acts a motivational factor to go
cashless.
VIII. Digital record of transactions: One of the other benefits of going digital is
that all transaction records can be maintained. Customers can track each and
every transaction that is made, no matter how small the transaction amount
this.
IX. One stop solution for paying bills: Many digital wallets and payment apps
have become a convenient platform for paying utility bills. Be it mobile
phone bills, internet or electricity bills, all such utility bills can be paid
through a single app without any hassle.
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X. Helps keep black money under control: Digital transactions will help the
government keep a track of things and it will help eliminate the circulation
of black money and counterfeit notes in the long run. Apart from this, this
may also give a boost to the economy as the cost of minting currency also
goes down.

2.2 Disadvantages of Digital Payment

Each payment system has its limits regarding the maximum amount in the account,
the number of transactions per day and the amount of output. 

I. The risk of being hacked

If you follow the security rules the threat is minimal, it can be
compared to the risk of something like a robbery. The worse situation
when the system of processing company has been broken, because it
leads to the leak of personal data on cards and its owners. Even if the
electronic payment system does not launch plastic cards, it can be
involved in scandals regarding the Identity theft. 

II. The problem of transferring money between different payment systems

Usually the majority of electronic payment systems do not cooperate
with each other. In this case, you have to use the services of e-
currency exchange, and it can be time-consuming if you still do not
have a trusted service for this purpose. Our article on how to choose
the best e-currency exchanger greatly facilitates the search process. 

III. The lack of anonymity

The information about all the transactions, including the amount, time
and recipient are stored in the database of the payment system. And it
means the intelligence agency has an access to this information. You
should decide whether it's bad or good. 

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 IV. The necessity of Internet access
If Internet connection fails, you cannot get to your online account. 

Chapter 3: Digital payment methods

One of the most popular payment forms online are credit and debit cards. Besides
them, there are also alternative payment methods, such as bank transfers, electronic
wallets, smart cards or bitcoin wallet (bitcoin is the most popular cryptocurrency).
E-payment methods could be classified into two areas, credit payment systems and
cash payment systems. [1]

3.1 Credit Payment System

 Credit Card — A form of the e-payment system which requires the use of
the card issued by a financial institute to the cardholder for making payments
online or through an electronic device, without the use of cash.
 E-wallet — A form of prepaid account that stores user’s financial data, like
debit and credit card information to make an online transaction easier.
 Smart card — A plastic card with a microprocessor that can be loaded with
funds to make transactions; also known as a chip card.

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 3.2 Cash Payment System
 Direct debit — A financial transaction in which the account holder
instructs the bank to collect a specific amount of money from his account
electronically to pay for goods or services.
 E-check — A digital version of an old paper check. It’s an electronic
transfer of money from a bank account, usually checking account, without the use
of the paper check.
 E-cash is a form of an electronic payment system, where a certain
amount of money is stored on a client’s device and made accessible for online
transactions.
 Stored-value card — A card with a certain amount of money that can
be used to perform the transaction in the issuer store. A typical example of stored-
value cards are gift cards.

Chapter 4: Tools and Techniques of Digital Payment

Digital Payment Technology in Bangladesh [2]
There are 7 Types of Digital Payment Methods in Bangladesh
1. Banking cards
2. USSD Mobile
3. E-Wallets
4. Bank pre-paid cards
5. Point of Sales (PoS)
6. Internet Banking
7. Mobile Banking

4.1. Banking cards: 

Cards are among the most widely used payment methods and come with various
features and benefits such as security of payments, convenience, etc. The main
advantage of debit/credit or prepaid banking cards is that they can be used to make

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other types of digital payments. For example, customers can store card information
in digital payment apps or mobile wallets to make a cashless payment. Some of the
most reputed and well-known card payment systems are Visa, Rupay and
MasterCard, among others. Banking cards can be used for online purchases, in
digital payment apps, PoS machines, online transactions, etc.

4.2 SMS Banking

SMS banking is a type of mobile banking, a technology-enabled service offering
from banks to its customers, permitting them to operate selected banking services
over their mobile phones using SMS messaging. SMS banking services are
operated using both push and pull messages. Push messages are those that the bank
chooses to send out to a customer's mobile phone, without the customer initiating a
request for the information. Typically push messages could be either Mobile
marketing messages or messages alerting an event which happens in the customer's
bank account, such as a large withdrawal of funds from the ATM or a large
payment using the customer's credit card, etc. Pull messages are those that are
initiated by the customer, using a mobile phone, for obtaining information or
performing a transaction in the bank account. Examples of pull messages for
information include an account balance enquiry, or requests for current information
like currency exchange rates and deposit interest rates, as published and updated by
the bank. Typical push and pull services offered under SMS banking:

4.3 USSD Mobile

Another type of digital payment method, User can dial a short code to make
transactions without downloading any app. These types of payments can also be
made with no mobile data facility. The main aim of this type of digital payment
service is to create an environment of inclusion among the underserved sections of
society and integrate them into mainstream banking. This service can be used to
initiate fund transfers, get a look at bank statements and make balance queries.

4.4 Mobile Banking

Mobile banking is referred to the process of carrying out financial
transactions/banking transactions through a smartphone. The scope of mobile
banking is only expanding with the introduction of many mobile wallets, digital
payment apps and other services like the UPI. Many banks have their own apps

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and customers can download the same to carry out banking transactions at the click
of a button. Mobile banking is a wide term used for the extensive range or
umbrella of services that can be availed under this.

A mobile wallet is a type of virtual wallet service that can be used by downloading
an app. The digital or mobile wallet stores bank account or debit/credit card
information or bank account information in an encoded format to allow secure
payments. One can also add money to a mobile wallet and use the same to make
payments and purchase goods and services. This eliminated the need to use
credit/debit cards or remember the CVV or 4-digit pin. Many banks in the country
have launched e-wallet services and apart from banks, there are also many private
players. Some of the mobile wallet apps in the market are
 Bkash,
 SureCash,
 UCash,
 IPay etc.
The various services offered by mobile wallets include sending and receiving
money, making payments to merchants, online purchases, etc. Some mobile
wallets may charge a certain transaction fee for the services offered.

4.3.1 Bkash
Bangladesh’s first complete mobile financial service provider, bKash
Limited, a BRAC Bank subsidiary, launched its mobile banking operation in
July 2011. bKash is designed to provide financial services via mobile phones
to both the unbanked and the banked people of Bangladesh. The overall
bKash value proposition is simple: a safe, convenient place to store money.
[7]
4.3.2 SureCash
SureCash is an online payment platform for mobile phone users in
Bangladesh. It allows its users to deposit and withdraw cash, send money to
other users, recharge their mobile phones, and check their bank balances. It
also enables its users to make and receive a range of payments, including
personal remittances, education fees, online purchases, and utility bills,
through their mobile phones. The platform works with over 41,000 retail
agents and 350 payment partners, and maintains partnerships with many
local banks such as Jamuna Bank, National Bank, Rupali Bank, First
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 Security Islami Bank, National Credit and Commerce Bank, and Bangladesh
Commerce Bank
4.3.3 UCash
UCash is a complete mobile financial service by United Commercial Bank
Limited (UCBL). UCBL received permission to operate and offer Mobile
Financial Services (MFS) from Bangladesh Bank. UCash is the brand name
of the mobile financial services offered by UCBL.[9]
4.3.4 Rocket
Dutch-Bangla Bank pioneered Mobile Banking in Bangladesh. It was the
first bank to offer banking facilities through a wide range of mobile phones.
Rocket is a Banking process without bank branch which provides financial
services to unbanked communities efficiently and at affordable cost. To
provide banking and financial services, such as cash-in, cash out, merchant
payment, utility payment, salary disbursement, foreign remittance,
government allowance disbursement, ATM money withdrawal through
mobile technology devices, i.e. Mobile Phone, is called Rocket. [10]

4.5. Bank pre-paid cards

A prepaid card is a type of payment instrument on to which you load money to
make purchases. The type of card may not be linked to the bank account of the
customer. However, a debit card issued by the bank is linked with the bank account
of the customer.
How to Use a Prepaid Card:
 Apply for the card
 Get pin
 Load money from your bank account/debit card

4.5 PoS Terminals

Traditionally, PoS terminals referred to those that were installed at all stores where
purchases were made by customers using credit/debit cards. It is usually a hand-
held device that reads banking cards. However, with digitization the scope of PoS
is expanding and this service is also available on mobile platforms and through
internet browsers. There are different types of PoS terminals such as Physical PoS,
Mobile PoS and Virtual PoS. Physical PoS terminals are the ones that are kept at

13
shops and stores. On the other hand, mobile PoS terminals work through a tablet or
smartphone. This is advantageous for small time business owners as they do not
have to invest in expensive electronic registers. Virtual PoS systems use web-based
applications to process payments.

4.6 Internet Banking

Internet banking refers to the process of carrying out banking transactions online.
These may include many services such as transferring funds, opening a new fixed
or recurring deposit, closing an account, etc. Internet banking is also referred to as
e-banking or virtual banking. Internet banking is usually used to make online fund
transfers via NEFT, RTGS or IMPS. Banks offer customers all types of banking
services through their website and a customer can log into his/her account by using
a username and password. Unlike visiting a physical bank, there are to time
restrictions for internet banking services and they can be availed at any time and on
all 365 days in a year. There is a wide scope for internet banking 

4.8 International Payment Technology

4.8.1 Paypal
Paypal is a popular tool for sending and receiving money online. Their online
payment service is used by consumers buying on eBay, Amazon and other online
marketplaces. PayPal currently has over 100 million active accounts originating
from 190 countries. PayPal is available in 202 countries worldwide and supports
25 currencies. People use PayPal to send or receive payments, purchase or sell
goods and services, make or accept cash donations, and exchange cash. Users can
send funds to anyone that has an email address. In order to receive the funds, you
must create a free basic personal PayPal account. You can link your PayPal
account with your bank account for free, and with your credit card for an additional
fee (2.9% of the selling price plus a fixed fee depending on the type of currency
used). There is no fee for users wishing to send money; however, there is a fee
associated with members who wish to receive payment.

4.8.2 Payza
Payza is an online payment platform for international money transfers. Send and
receive money, making online payments for a competitive exchange rate over 190

14
countries and 25 currencies supported, making Payza the only online payment
platform you need. Send your money, not your information

4.8.3 Payoneer
Payoneer is a financial services company that provides online money transfer
and digital payment services. Account holders can send and receive funds into their
bank account, Payoneer e-wallet, or onto a re-loadable prepaid MasterCard debit
card that can be used online or at points-of-sale. [1] The company specializes in
facilitating cross-border B2B payments. It provides cross-border transactions in
more than 150 local currencies,[2] with it's cross border wire transfers, online
payments, and refillable debit card services.[3]
Companies like Airbnb, Amazon, Google and Upwork use Payoneer to send mass
payouts around the world.[4] It is also used by eCommerce marketplaces such as
Envato,[5][6] and works with ad networks to connect these firms with publishers
based outside of their headquartered country.[7][8]
In the content creation space, Payoneer works with a variety of companies and
freelance marketplaces.

4.9 Digital Payment Platform

Online banking (or Internet banking or E-banking) allows customers of a financial
institution to conduct financial transactions on a secured website operated by the
institution, which can be a retail bank, virtual bank, credit union or building
society. To access a financial institution's online banking facility, a customer
having personal Internet access must register with the institution for the service,
and set up some password (under various names) for customer verification. The
password for online banking is normally not the same as for [telephone banking].
Financial institutions now routinely allocate customers numbers (also under
various names), whether or not customers intend to access their online banking
facility.
But the feature of Internet banking in Bangladesh is totally different. Most of the
private bank provides internet banking service for customers. This is not pure
internet banking, it’s a demonstration only. Users/ customers just check their
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balance, show their account statement, money transfer is possible (within own
account). Money transfer from one user to another user is not possible. Some banks
provide mobile recharge and WI-max recharge facilities.

To access a financial institution's online banking facility, a customer having

personal Internet access must register with the institution for the service, and set up
some password (under various names) for customer verification. The password for
online banking is normally not the same as for [telephone banking]. Financial
institutions now routinely allocate customers numbers (also under various names),
whether or not customers intend to access their online banking facility. Customers
numbers are normally not the same as account numbers, because number of
accounts can be linked to the one customer number. The customer will link to the
customer number any of those accounts which the customer controls, which may
be cheque, savings, loan, credit card and other accounts. Customer numbers will
also not be the same as any debit or credit card issued by the financial institution to
the customer. To access online banking, the customer would go to the financial
institution's website, and enter the online banking facility using the customer
number and password. Some financial institutions have set up additional security
steps for access, but there is no consistency to the approach adopted. Online
banking facilities offered by various financial institutions have many features and
capabilities in common, but also have some that are application specific. The
common features fall broadly into several categories.

1) A bank customer can perform non-transactional tasks through online banking,

including –
a. viewing account balances
b. viewing recent transactions
c. downloading bank statements, for example in PDF format
d. viewing images of paid cheques
e. ordering cheque books
f. download periodic account statements
g. Downloading applications for M-banking, E-banking etc.
2) Bank customers can transact banking tasks through online banking, including –
a. Funds transfers between the customer's linked accounts
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 b. Paying third parties, including bill payments (see, e.g., IPAY) and
telegraphic/wire transfers
c. Investment purchase or sale
d. Loan applications and transactions, such as repayments of enrollments
e. Register utility billers and make bill payments

3) Financial institution administration

I. Management of multiple users having varying levels of authority
II. Transaction approval process the process of banking has become
much faster
4) Some financial institutions offer unique Internet banking services, for example
Personal financial management support, such as importing data into personal
accounting software. Some online banking platforms support account aggregation
to allow the customers to monitor all of their accounts in one place whether they
are with their main bank or with other institutions

Chapter 5: Architecture of E-Wallet

A digital wallet is a software component that provides a client with instrument

management and protocol management services. Instrument management and
protocol management are defined in Section 3, but, in brief, are services that allow
the wallet to 1) install and uninstall instrument classes and protocols, 2) create,
update, and delete instruments and protocols, and 3) execute protocols. Digital
wallets are capable of executing an operation using an instrument according to a
protocol. A digital wallet presents its client with a standard interface of functions;
in the case that the client is a human user, this standard interface of functions may

17
 be accessed through a graphical user interface (GUI). A digital wallet is linked into
an end-user, bank, or vendor application and provides the application with
instrument management and protocol management services. The digital wallets
that are linked into vendor and bank applications provide these management
services in the same way that end-user digital wallets do. A vendor’s digital
wallet, however, may be part of a much larger software application that is
integrated with order and fulfillment systems. Similarly, a bank’s digital wallet
may be part of a larger application that is integrated with general ledger, profit &
loss, and reconciliation systems.
A digital wallet has both a software and information component. The software
provides security and encryption for the personal information and for the actual
transaction. Typically, digital wallets are stored on the client side and are easily
self-maintained and fully compatible with most e-commerce web sites. A server-
side digital wallet, also known as a thin wallet, is one that an organization creates
for and maintains on its servers. Server-side digital wallets are gaining popularity
among major retailers due to the security, efficiency, and added utility it provides
to the end-user, which increases their enjoyment of their overall purchase. The
information component is basically a database of user-inputted information. This
information consists of shipping address, billing address, payment methods
(including credit card numbers, expiry dates, and security numbers), and other
information.
The Payments subsystem contains three main parts: Payment rules
engine, Payment [4] plug-in controller, and payment plug-ins.
Review the following concepts related to the Payments subsystem:

 Payment methods
 Refund methods
 Payment, refund, and return payment business policies
 Payment instructions
 Payment events and task commands
 Payment actions
 Financial transactions
The Payments subsystem contains three main parts:
Payment rules engine

18
 The Payment rules engine determines which action to take based on the
payment instruction, payment method and the payment event.
Payment plug-in controller
The Payment plug-in controller is a component of the Payments subsystem.
It determines which plug-in to use (based on the payment method) and
which plug-in API method to call (based on the action).

Payment plug-ins
A payment plug-in is a self-contained software component that serves as a
proxy for a payment back-end system.

5.1 Payment processing flow

The following diagram shows how a payment is processed by the Payments
subsystem.

19
Figure 1Payment Flowchart

20
5.2 E-Wallet network

Figure 2E-Wallet Network

5.3 National Payment Switch

Figure 3 National Payment Switch

Bangladesh bank launched National Payment Switch (shows in Fig. 2) in 2012, a common
platform for the country's commercial banks for electronic payments, which is going to

21
revolutionize E-commerce in Bangladesh. Once all banks in Bangladesh join the NPS (National
Payment Service), a customer using a credit or debit card of any bank will be able to draw cash
from any ATM and POS (point of sales) in the country, and transaction costs will significantly
go down as the transactions will be routed through the NPS instead of Visa, Master or Amex
card networks abroad. Moreover, purchase and sale can be done with cards through the internet
and web portals within the country [3]. NPS will facilitate easy access to funds, an increase in
tax revenue, more flow of money in the economy, and financial inclusion. NPS is a common
electronic payment platform to help banks and their clients make transactions in an easy and
cost-effective way. Individual payment platforms introduced by different banks will be abolished
once all banks join the common platform.

5.4 Necessity of E-Wallet

The electronic wallet (e-wallet) provides all of the functions of today’s wallet on
one convenient smart card eliminating the need for several cads. The e-Wallet will
also provide numerous security features not available to regular wallet carriers. e-
wallet is a digital wallet which allows users to make electronic transactions quickly
and securely [5]. In our proposed e-wallet, we directly linked our bank account to
it. We assume that, it’s a one kind of internet banking with more features such as
purchase goods and service directly from our bank account, transfer money to
others (e-wallet users), issuing e-checks, e-cash, e-pay-order etc. In other word, the
whole banking services should be done by e-wallet. We linked our several bank
accounts to e-wallet. We also link our credit/debit card; use them through e-wallet.
e-wallet must be connected to National payment switch for getting more benefits.
Fig. 3 shows the architecture of e-wallet. e-wallets allow us to keep track of our
billing and shipping information so that it can be entered with one click at
participating merchants' sites. The most common example of e-wallet system is
Paypal. It is a fast way to pay and get paid online. Paypal allows people to send
money without sharing financial information. People also have the flexibility to
pay using their account balances, bank accounts, and credit cards. As of 2014,
there are over 143 million active Paypal accounts, in 193 markets, and 26
currencies worldwide. PayPal allows for global commerce, through which it
processes over 9 million payments each day. PayPal, which was bought by eBay
for $1.3 billion in late 2002, had contributed to 41 percent of eBay's revenues in
2013. It is nationally headquartered in San Jose, California, and internationally
headquartered in Singapore. [6] Another popular example of an e-wallet on the
market is Microsoft Wallet. To obtain Microsoft Wallet, one needs to set up a

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Microsoft Passport. After establishing a Passport, a Microsoft e-wallet can be
established. Then, e-wallets can be used for micro-payments. They also eliminate
reentering personal information on the forms, resulting in higher speed and
efficiency for online shoppers. Microsoft Passport consists of several services
including, a single sign-in, wallet and kids passport services. A single sign-in
service allows the customer to use a single name and password at a growing
number of participating e-commerce sites. The shopper can use to make fast online
purchases with a wallet service [7]. Kid’s passport service helps to protect and
control children's online privacy. We should protect our wallet file with a
password. With a password protected wallet we must enter the wallet’s password
before we can see the information on any of the cards/accounts in that wallet. A.
Starting with e-Wallet When we start e-wallet for the first time, we are prompted to
create a new wallet file to store our information in. When we’re ready to add our
own information, we can add new categories and cards to wallet and organize the
information in a way that fits our needs. e-wallet protects our wallet information in
two ways: 1) By requiring a password before displaying any cards/ accounts in a
password protected wallet. 2) By encrypting (making unintelligible) the
information in cards/accounts in password protected wallets in our wallet file. This
means that the information in the file is translated into a secret code so that it can’t
be read by any other program.

5.5 Technology in E-Wallet

A digital wallet has both a software and information component. The software
provides security and encryption for the personal information and for the actual
transaction. Typically, digital wallets are stored on the client side and are easily
self-maintained and fully compatible with most e-commerce web sites. A server-
side digital wallet, also known as a thin wallet, is one that an organization creates
for and maintains on its servers. Server-side digital wallets are gaining popularity
among major retailers due to the security, efficiency, and added utility it provides
to the end-user, which increases their enjoyment of their overall purchase. The
information component is basically a database of user-inputted information. This
information consists of shipping address, billing address, payment methods

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 (including credit card numbers, expiry dates, and security numbers), and other
information.
5.6 SWAPEROO Architecture
In the following, we present an extensible, symmetric, non-web-centric, and client-
driven architecture for digital wallets. In the SWAPEROO architecture, the
interaction between a client wallet and a peer wallet roughly works as follows:
Once a session is initiated by the client and the peer wallet prepares to service the
client, the client can determine what instrument classes are available on the peer
wallet, and then select an instrument class that is common to both peers. After an
instrument class is selected, protocol management functions are called to determine
what available protocols may be used to conduct operations on an instrument of the
selected class. Depending upon what protocols are shared, a protocol is selected.
The protocol supports certain operations for the selected instrument class, and the
client may invoke those operations on an instrument instance. A digital wallet is an
object that has four required key architectural component objects: A Profile
Manager, an Instrument Manager, a Protocol Manager, and a Wallet Controller. [6]

Figure 4Symmetric Bank & Vendor Wallet Architectures

5.7 Technical details

1. The shopper or CSR completes an order. When the order is submitted, the
Order Process command runs, then invokes the Prime Payment task command.
2. The Payment rules engine determines the payment action that needs to be
performed, for example, Approve.
3. The payment action is wrapped into an event, which is passed to
the Payment plug-in controller. For example, for the approve action, the Payment
plug-in controller API Approve is called.

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4. The Payment plug-in controller determines which plug-in to use.
5. The payment action is invoked against the plug-in. For example, for approve
action, the API approve of the corresponding plug-in is called.
6. The plug-in interacts with the Payment Service Provider.
7. The plug-in sets the transaction state according to the transaction execution
results with the Payment Service Provider. This transaction state will return to
the Payment plug-in controller.
Payment Controller working details:
1. The Payment plug-in controller updates the payment related records in the
database according to the state of transaction execution returned by the plug-
in.

2. Payment instruction
A payment instruction is the instance of a payment method with the details
necessary to perform payment actions. For example, if a payment method
name is Visa, then the payment instruction consists of Visa, the payment
amount, cardholder's name, billing address, account number, and expiration
date.

3. Payment methods
Payment methods are the means by which payments are made. Payment
methods include credit card brands, electronic checks, gift certificates, and
manufacturers' coupons. The shopper selects the payment method on the
Order Summary page.

4. Refund Methods:
Refund methods are the means by which money is credited to customers
returning merchandise. Refund method are configured in the POLICY
database table by Payment policy types. For example, for a credit card
payment method, the refund method is also a credit card.

5. Payment, refund, and return payment business policies

Payment methods and refund methods are defined in
the POLICY, POLICYDESC, and POLICYCMD database tables. If the
predefined payment methods and business policies do not meet your needs,
you can add new ones. However, do not remove a Payment or Return
Payment business policy; this could result in a broken payment term and
condition.
6. Payment actions

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 A payment action moves a payment state to a target state. Payment actions
are triggered by payment rules based on the payment method, payment
event, and payment state.

7. Payment rules engine

The Payment rules engine determines which action to take based on the
payment instruction, payment method and the payment event.

8. Payment plug-in controller

The Payment plug-in controller is a component of the Payments subsystem.
It determines which plug-in to use (based on the payment method) and
which plug-in API method to call (based on the action).

9. Merchant feature
You can use the merchant feature to manage merchant information by
storing and managing the store-specific properties from the Payment
perspective.

10.Payment events and task commands

Payment events correspond to order life cycle phases and task commands.

11.Payment configuration group

A payment configuration group is a set of XML files that is associated with
a specific payment method. For example, if your store will accept checks,
cash on delivery, and two brands of credit cards, four payment
configurations are required. A payment configuration group is an identifier
for a group of payment configurations for different payment methods. The
same payment method can have different payment configurations in
different payment configurations groups identified by a different payment
configuration group ID. A payment configuration ID is the mechanism by
which the Payments subsystem identifies the set of configuration files to use
for a given payment method. It is a string value that represents the folder or
directory name where the XML configuration files are located. A payment
configuration ID is used by the payment business policy in the POLICY
database table. Payment business policies have the policy type
"Payment."WebSphere Commerce provides a default configuration group
for every payment method it initially supports (for example, for brands of
credit cards, check, COD, Bill Me Later, and line of credit). You can use this
configuration as it exists or create new ones manually. The "default"

26
 payment configuration group refers to a directory with default payment
method configurations.

12.Extended data in payments or credits

Some payment plug-ins require extra protocol data or keywords to
communicate with a back-end system. This extra protocol data
called extended data is in addition to the standard attributes defined in the
payment instruction definition. Extended data is any data other than the
currency, amount of the payment instruction, and the payment method name.
For example, credit card number, expiration, and billing address are
extended data.
13.Financial transactions
A financial transaction is either a single individual payment or a credit
transaction. A payment financial transaction corresponds to a payment
action in the Payment rules engine and a credit financial transaction
corresponds to a refund action. Every time the Payment rules engine decides
the payment or refund action that needs to be run, the corresponding
financial transaction is then run in the Payments Plug-in Controller with the
Payments Plug-in.

14.Payments subsystem advantages

The Payments subsystem offers many advantages compared to
the WebSphere Commerce Multipayment Framework.

Chapter 6: Digital Payment Security and Reliability

As we move into a cashless economy, there is always going to be questions raised

over the security in digital payments. Countries across the world have seen
numerous advances towards cybersecurity measures, but not without a few hiccups
along the road. As India is fairly new to the concept of digital payments, there is
always that impending threat of a cyber-attack that could erase a person’s bank
account. Fortunately, the government is moving strongly towards a super-secure
way of making payments through mobile phones and other cashless resources. [5]

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As far as security is concerned, the best thing consumers can do today is to ensure
that they take meticulous steps in preventing the theft or loss of crucial data on
their mobile devices. Here are some ways to ensure full security when you prepare
to make payments the digital way.

6.1 Be careful of what you install in your phone

Mobile apps are one of the most convenient smartphones features ever to exist.
Apps are so user-friendly that many companies that had previously operated solely
via websites have shifted focus on developing a mobile app version of their
services. While the Play Store (Android) and App Store (iOS) do provide standard
security checks with their verified app programs, there can be cases of faulty or
nosy application features that could mishandle payment protocols. With the case of
e-wallet apps, you must be absolutely certain of using and sharing crucial
information with the app’s database prior to installing it. There are many options to
choose from, but it is safest to install the e-wallet app with the most hits and user-
recommended downloads. Also, check the security guidelines and app
requirements before you input personal information.

6.2 Update to the latest software

Yes, it may be annoying to be constantly bombarded with intrusive software

updates on your mobile device or any other hardware that supports digital
payments. But the truth is that these updates are done by their respective parent
organisations for good reasons. A majority of minor and frequent updates you spot
will involve bug fixes and UI improvements, all for the sake of making crucial
elements like the transaction of money smoother and less error-prone. Set your
device to accept software updates automatically and always go through what the
update is all about to understand how to make the most use of it.

6.3 Activate basic security measures

Privacy is an essential part of day to day living, especially if you are living in a
world where everything you do can be tracked by a simple few button presses.
When it comes to securing critical data, smartphones are the go-to device in the
digital age. Basic security measures like passwords, pins and biometric
authentication are used extensively, and this is further aided with budget friendly
smart devices also including similar security measures. The practice of securing
personal digitized data must be spread nationwide if the country is truly going to
transform into a digitally sovereign currency.

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6.4 Make the most of two-factor authentication

You may have come across a security measure that requires the input of an e-
password that expires after use. Such security measures are called as two-factor
authentication that greatly reduces the risk of fraudulent activity during digital
payments. Your e-wallet service provider will prompt you with a One-Time-
Password that has to be entered to confirm payments, after you go through the
initial security measure of entering your personal password. This security measure
is practiced across all major payment service providers, so make sure you have all
the mandatory requirements sorted out before you go ahead for a purchase via
digital means.

6.5 Swipe only at trusted POS systems

Card payments in India are at a high risk of fraud due to the ease in which your
PIN number and card details can be duplicated. Fortunately, advancement in
payment techniques like mobile e-cards are removing the risk of carrying too many
cards in your purse. You must also be weary of where you swipe your card; it is
best to swipe at trusted shopping centers that use on the best and latest POS
machines.

The latest advancement in payment security has come with the recent partnership
between Google and the Ministry of Electronics and Information Technology, as
they announced the launch of the Digital Payment Security Alliance. The big
budget project aims to raise community awareness of digital security. This
initiative is sure to shed further light on the concerns of digital security and could
pave the way for advanced cybersecurity technologies making their way to the
Indian marketplace.

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Chapter 7: Implementation and Interface of my Project
I have tried to implement a digital payment system using E-Wallet for money
transaction. Here is the feature of my project.

7.1 Feature of my project

7.1.1 Account Registration

Figure 5 Account Registration

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7.1.2 Payment to merchant wallet

Figure 6 Payment to merchant wallet

Figure 7 Successful Payment

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7.1.3 Check Statement

Figure 8 Check statement

7.1.4 Wallet deposit

Figure 9 Wallet Deposit

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Figure 10 Successful Wallet Deposit

7.1.5 Cash Out

Figure 11 Cash out

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Figure 12 Cash out successful

7.2 Platform to develop this project

▰ Programming Language: Java, C#
▰ Platform: ASP.NET, Android
▰ Web API
▰ SMS API

Conclusion
Finally, it can be said that, Digital Payment System is the latest technology to
make a great and convenient banking and payment process. The main discussion of
the paper is “e-wallet” an Electronic payment System for Bangladesh, which
replaced the traditional wallet that contains notes, coins, checks and
Credit/Debit/ATM cards. The system will be developed if the Government of
Bangladesh provides necessary support. Since it’s a web-based system, any device
can access the system via internet

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References
I. https://securionpay.com/blog/e-payment-system/

II. https://www.bankbazaar.com/ifsc/digital-payment.html

III. https://www.fisglobal.com/solutions/payment-solutions/digital-payments

IV. https://www.ibm.com/support/knowledgecenter/de/SSZLC2_7.0.0/com.ibm.commerce.payme
nts.events.doc/concepts/cpparchitecture.htm

V. https://bijlipay.co.in/blog/security-digital-payments

VI. https://www.researchgate.net/publication/2613979_SWAPEROO_A_Simple_Wallet_Architectur
e_for_Payments_Exchanges_Refunds_and_Other_Operations
VII. http://www.bkash.com/

VIII. http://www.surecashbd.com
IX. https://www.ucash.com.bd/
X. https://www.dutchbanglabank.com/rocket/balance-inquiry.html

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