While internet based banking and online shopping is growing sharply all around the world the importance of electronic payment system increase over the last decade. These days, many people make payments electronically rather than do it in person while a huge number of electronic payment systems have been developed in order to provide users secure Internet transactions.
Technology development is advancing every single day and due to that the rise of electronic payment systems is visible by anyone. Cash transactions are decreasing and on the other hand electronic payment systems increase, improve, and provide ever more secure online transactions.
What is the electronic payment system?
In case you want to go through the phrase definition an electronic payment system in word is a way of paying for a goods or services electronically, by this you do not have to use cash or check in person to purchase something or receive some services.
Generally speaking electronic payment system is a fast and secure payment method which can be a great alternative for traditional method such as cash, checks, bank transfer. There is a noticeable increasing number of people who use electronic payment companies since they are able to transfer money and make purchases faster and easier. Electronic payment systems are considerably useful for international transactions while you do not need to worry about currency conversion or high commission.
How does electronic payment system work?
Electronic payment can be made fast and easy so it is convenient and saves people’s time. The process starts when a user decides to purchase a product or service online and pay for it through electronic payment system. In the next step the consumer need to fill out the payment form with certain information. Then the payment gateway should verify the payment information validity. If there is nothing wrong then the customer receives a payment confirmation and finally the online payment provider receives a payment from a customer and transfer it to the merchant’s account.
Electronic payment systems must provide users secure and fast electronic financial transaction. To do so they must ensure that communications are private and they must verify the changes of communication during any transaction. Both side of a transaction must be who each claims to be and the transferred data must be generated by the signed author. All of these factor’s responsibility is on the payment system so every electronic payment system must be developed depends on some type of encryption to create secure and private money transaction.
Electronic payment method types
There are two types of methods when using electronic payment system, credit payment systems and cash payment systems. Here is a full description about each of them.
credit payment system
One of the most popular payment forms online are credit and debit cards. Besides them, there are also alternative payment methods, such as electronic wallets, smart cards or different types of cryptocurrency wallet.
Credit Card: using credit cards requires the use of the card issued by a financial institute to the cardholder for making payments online or through an electronic device, then you will not have to use cash.
E-wallet: electronic wallet is a prepaid account that containing user’s financial data, like debit and credit card information.
Smart card: smart cards which are known as chip cards too, have a microprocessor embedded in them that can be loaded with funds to make transactions.
Cash payment system
Direct debit: using direct debit the account holder collect a specific amount of money from his bank account electronically to make online payment.
E-check: E-checks are actually digital paper checks. The money transfers from a bank account, after checking it, and there is not going to be any paper check involved.
E-cash: in this electronic payment system, specific amount of money is stored on a client’s device and it can be used for online transactions.
Stored-value card: these cards have a certain amount of money and they can be used in issuer store. Gift cards are instance of stored-value card.
Top most popular electronic payment companies
First of all before making any electronic payment you should choose an electronic payment company. As soon as you do it you will be required to set up an account and register your details. Then you have to connect a bank card to your account by entering card details. Once you’re registered in the electronic payment company then you will be able to pay for purchases using your account fast and easy. Here is a list of most popular electronic payment companies.
PayPal is one of the world’s most widely used payment systems. Using PayPal payments can be made by PayPal existing account or credit card. In this system money is going to be sent directly to email address. PayPal also provides users with the possibility of sending money through the service, however the feature is available in a few payment solutions.
Google Checkout is simple to use. It is connected to user’s Google profile to create the account in the payment system. Then users would be able to use it easily to pay for goods and services online.
Stripe is an excellent mean for web developers. By using it web developers would be able to integrate a payment system into projects instead of old sign up process.
Skrill is popular for its useful features such as instant withdrawals and deposits, low transaction fees, exclusive offers. Skrill payment system accept from 40 currencies and users are able to send text messages directly from their account.
If a service provider or online seller use Amazon payment then the customers would easily go through their amazon credential account and make the payment fast and secure.
Payoneer is one of the oldest payment processing services that is supporting users globally. It is available in more than 200 countries and accepts 150 different currencies. You can also use a master card and withdraw money in cases that you cannot go digital for any reason.
Dwalla features are almost similar to PayPal for transferring money while Dwolla focuses more on bank transfers, or Automated Clearing House payments. It might be good to know that Dwolla transactions are free.
WePay supports both credit cards and bank account payments online. On the WePay electronic store pages to within the website, customers can easily take in payments for event tickets, products, donations, etc through the service directly.
Square magstripe reader, enables business owners to swipe credit cards anywhere. Square card is a debit card that gives user access to money right away.