Define electronic payment system.

An electronic payment system is a method of making financial transactions electronically, typically using the internet or other electronic devices. This can include online banking, mobile payment apps, digital wallets, and other forms of electronic funds transfer. These systems allow individuals and businesses to send and receive money quickly and securely without the need for physical cash or checks.

An electronic payment system (EPS) is a secure, digital method of transferring funds between parties. It allows users to make payments without using physical cash or checks, providing convenience and faster processing times. EPSs operate through various channels, such as:

- Online: Transactions are initiated and conducted entirely online, typically through websites or mobile applications.
- Mobile: Payments are made using smartphones or tablets, leveraging mobile banking apps or mobile payment wallets.
- Point-of-Sale (POS): Payments are processed at physical retail locations using card readers or contactless terminals.
- Automated Clearing House (ACH): Funds are transferred electronically between bank accounts without involving cash or physical checks.

Key features of electronic payment systems include:

- Security: EPSs employ encryption and fraud prevention measures to protect sensitive financial data and prevent unauthorized transactions.
- Convenience: Users can initiate payments anytime, anywhere, without the need for physical visits to banks or the handling of cash.
- Speed: Transactions are processed instantly or within a short timeframe, eliminating delays associated with traditional methods.
- Cost-effectiveness: EPSs can reduce administrative costs and save time compared to manual payment processing.
- Integration: EPSs can be integrated with other financial systems, such as accounting software, for seamless management.