|April 16th, 2020
The need for accepting online payments grows constantly with the increasing volume of businesses running online. These businesses range from eCommerce websites to selling/buying products and services, from subscription of online entertainment portals to paying for digital courses online. The scope for online payments is limitless as it has become an integral part of B2B, B2C and B2B2C businesses. Somewhere down the line, all kinds of business models need an efficient system for accepting online payment.
Gone are the days of the cash economy, this is the era of digital everything. In this new world, money flows on the internet and to send/receive this money, a system for accepting/sending online payments is a much needed requirement. It doesn’t matter whether you are running a small business or a complete ecommerce portal, a robust online payment system enables you to process payments swiftly and ensure a safe and secure environment to provide a user experience that bolsters the credibility in your brand and business. Online payment systems have clear advantages over other conventional methods of payments. Let’s go over them quickly:
You must be curious by now to know more. What are the different online payment systems? How to choose the best and most suitable one for your business? What are the risks and benefits associated with them? Well, all these are important questions which will be answered as you read along. First, we go over the different ways you can accept online payments in 2020:
Credit and debit cards are one of the most common choices when it comes to online payments. Most consumers have been using this method since the era of online payments began. These payments require a dedicated merchant account (one account for one merchant) or a shared/aggregated holding account (one account for a group of small businesses) to process payments. The Payment Card Industry- Data Security Standards (PCI-DSS) has laid down a set of guidelines which must be followed to make online debit/credit transactions safe and secure. The service provider that facilitates such payments on your behalf charges a minimal fee per transaction and some other added charges like conversion fee (in case of international payments), chargeback fee (for refunds or order cancellations) and other charges like PCI compliance charge, interchange fees etc.
Echecks are a revolutionary payment acceptance system. They are exactly like paper checks with the only difference that they are completely digital and work online, which means speed, security and flexibility. The companies that provide echeck services offer free, easy set-ups and also charge less transaction fees than credit/debit card payments. ACH or Automated Clearing House is the technology that facilitates eCheck transactions. These are easy to make and offer unprecedented levels of security and mobility. Echecks are gaining momentum as payment systems and are being incorporated into more and more business transactions.
Mobility is the most beneficial technological advancement when it comes to the digital world. Mobile payments are increasing in number as more and more users are drawn towards this efficient system of making online payments. Mobile devices are being used to conduct transactions via dipping, swiping or simply keying in details on payment portals. These are being used extensively for making payments as they come with a flexibility of options like providing cash flow reports, ability to manage invoices and storing details of customer’s account. Smartphones have made it way more easier to track and execute online payments.
This method of online payment can be called a little old and conventional as we have seen newer and more advanced systems of payment emerge and dominate the online markets. However, these are still being used by a large number of businesses. Online payment gateways are provided by third party companies, they host a payment form in which a user inputs their information and credentials to complete the transaction. These payment gateways offer security standards like 3D secure passwords etc. to ensure safety and security of private data. However, these payment gateways require the user to navigate outside a particular website/webpage which is not considered beneficial as it reduces chances of conversions and consumer retention.
You can also allow customers to pay by sending them an invoice. This is considered a fairly fast and advanced system of online transactions as customers can make payment within a few clicks. The email invoice contains the link to an online payment form in which the user inputs data and details to complete the payments. The email invoicing system can be used to accept credit/debit card payments as well as eCheck payments. It can also be used to send reminders/notifications about recurring payments to customers.
Constantly growing financial technology and the ever growing need for better, safe and fast payment systems fuel each other and continue the saga of online payments. Newer and better solutions to meet the specific needs of consumers as well as merchants gives the required impetus to refine these technologies further. Increasing regulations and better safety standards aim at protecting the consumer and merchants from online frauds and cyber-attacks. As a business, do not get confused about which payment system to use. The best way is to use a mix and match of more than one type of payment system. It is recommended to include as many options as possible for the ease and flexibility of the end user.