Consumers want multiple convenient service options.
That is the reason online shopping is growing in popularity worldwide. According to a study by BigCommerce, eCommerce is increasing 23% over the year. However, there are two generations: Millennials and Gen Xers, who spend six hours per week online shopping.
As these two generations make up most of the US population, it will be a massive opportunity for businesses to increase revenue and expand brand awareness.
Want to do so?
I’m sure you do.
You have to start investing in an electronic payment system. Whether you are looking for an online store or you are already the key player in the industry, electronic payment solutions are something to power up your business.
Below, we will discuss almost everything about the electronic payment system.
What is an Electronic Payment System?
It is a convenient system that allows consumers to pay for products or services through electronic methods. These methods may be credit cards, debit cards, direct bank deposits and e-checks.
There are other alternative e-payment methods like cryptocurrencies, bank transfers, bitcoins and e-wallets. Nowadays, these alternative methods are gaining massive popularity.
If you want to purchase the latest fashionable clothes from your favourite online fashion store, an electronic payment system is one of the convenient options to do so.
Therefore, if you want to open an online eCommerce website, you must need an electronic payment system and understand how it works. It is vital to understand the role this system plays in the evolution of the payment processing ecosystem.
According to the Pew Research centre, around 24% of people in America make no purchases with cash during a week. And according to the Wall Street Journal, credit cards eclipsed cash in transactions worldwide in 2016.
After all these things, we can say that consumers gravitate towards payment and shipping methods that offer flexibility and convenience.
Types of Electronic Payment methods
Here are some different types of electronic payment methods.
- Internet banking:- It is the process of transferring funds from one bank account to another without exchanging my hands—different modes of internet banking modes areRTGS, NEFT and IMPS.
- Card payments:- It is done through credit and debits cards, smart cards and store valued cards.
- E-cash:- An electronic form of cash stored in the customer’s device for making transfers.
- E-check:- A digital version of a paper check used to transfer funds.
- E-wallets:- It is a virtual wallet that offers a seamless payment experience.
- QR payments:– QR means Quick Response containing a pixel pattern of barcodes. There is information containing each part of the code.
- Contactless payments:- Consumers can make these payments through NFC and RFID technology.
- UPI payments:- Unified payment interface payments are made through an app on a mobile device.
- Biometric payments:- You can do these types of payments through eye scanning, fingerprint scanning and facial recognition.
- AI-based payments:- Artificial intelligence-based payments such as chatbots, speakers, ML tools, and deep learning tools create a revolution worldwide.
How does the Electronic payment system work?
The working nature of an electronic payment system is technical as it involves many moving parts. Below, we will discuss the main participants involved in an electronic payment transaction.
- Card Holder:- It is identified as a consumer who purchases products or services online.
- Merchant:- He is a person who owns a business that sells goods and services to the cardholder.
- Issuer:- It is the financial institution that provides the cardholder with the payment card.
- Acquirer:- A financial institution that establishes an account with the merchant. Also, it maintains the legitimacy of the cardholder account.
- Payment processor:- It handles the official transaction between the merchant and cardholder.
- Payment Gateway:- It processes merchant payment messages and uses security protocols to ensure transaction safety.
So here we got almost everything about an electronic payment system. Nowadays, it has become a topmost priority for every business, especially if you have an online store. However, many people think there will be security problems during online transactions.
But you do not have to worry about it. Many security standards and protocols are in place to ensure the security of online transactions. So start implementing this fantastic system in your business without wasting any second.