Risks in Electronic payment systems:-
There are three major risks in the operation of the payment system, they are
1) Fraud or mistake.
2) Privacy issues.
3) Credit Risk.
1) Fraud or Mistake:
All electronic payment systems need some ability to keep automatic records. Once information has been captured electronically, it is easy and inexpensive to maintain. The need for record keeping for purpose of risk management like fraud or any sort of mistake.
2) Privacy Issues:
The electronic payment system must ensure and maintain privacy. The privacy customers should be protected as much as possible privacy must be maintained against unauthorized persons. For any type of transaction trusted third-parties will be needed for all tenacity and good faith.
3) Managing Credit Risk:
Credit or systematic risk is a major concern in net settlement systems because a bank’s failure to settle its net position could lead to a chain reaction of bank failures.