What Is an E-payment System?
E-payment system is a way of making transactions or paying for goods and services through an electronic medium without the use of check or cash. It’s also called an electronic payment system or online payment system. Read on to learn more.
The electronic payment system has grown increasingly over the last decades due to the widely spread of internet-based banking and shopping. As the world advance more on technology development, a lot of electronic payment systems and payment processing devices have been developed to increase, improve and provide secure e-payment transactions while decreasing the percentage of check and cash transaction.
Electronic payment methods
E-payment methods could be classified into two areas, which are:
1. Cash Payment System
Electronic Funds Transfer (EFT): this is an electronic system used to transfer money from one bank account to another without any cash exchange by hand.
EFT comprises many other concepts of payment system include:
- Direct debit, that is a financial transaction in which the account holder instructs the bank to collect a specific amount of money from his account electronically for payment of goods or services.
- E-Check, a digital version of an old paper check. It’s an electronic transfer of money from a bank account, usually checking account without the use of the paper check.
- Electronic billing: this is another form of electronic funds transfer used by companies or businesses to collect payments from customers over electronic method.
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- Electronic cash (e-Cash): it is a form of an electronic payment system of which certain amount of money is stored on a client device and made accessible for internet transaction. Electronic cash is also referred to as digital cash and it make use of e-cash software installed on the user PC or electronic devices.
- Stored value card: this is another form of EFT used by stores. Stored value card is a card variety that has a certain amount of money value stored and can be used to perform the transaction in the issuer store. A typical example of stored value cards are gift cards.
2. Credit Payment System
- Credit Card: this is another form of the e-payment system which required the use of the card issued by a financial institute to the cardholder for making payments online or through an electronic device without the use of cash.
- E-Wallet: it is a form of prepaid account that stored user’s financial data like debit and credit card information to make an online transaction easier.
- Smart card: this use a plastic card embedded with the microprocessor that can be loaded with funds to make transactions and instant payment of bills. It is also known as a chip card.
Benefits of using an e-payment system
eCommerce websites use an e-payment system to make it easier and more convenient to pay for their customers. It comes with many benefits, which are:
- More sales by reaching a new audience.
- More effective and efficient transactions. It’s because these are made just in minutes (even with one-click), without wasting customer’s time.
- Convenience. Customers can pay for items on e-commerce website at anytime and anywhere. They just need an internet connected device. As simple as that!
- It also lowers the whole transaction cost.
- Today it’s easy to add payments to the website, so even a non-technical person may implement it in minutes and start processing online payments.
- Payment gateways and payment providers offer highly effective security and anti-fraud tools to make transactions reliable.
Want to know more about online payment processing? Read this guide.
eCommerce, as well as m-commerce, is getting bigger and bigger, so having e-payment system at your online store is a must. It’s simple, fast and convenient for the online shoppers to pay.
Still, one of the most popular payment methods are credit and debit card payments, but people also choose some alternatives or local payment methods. If you run an online business, find out what your target audience need, and provide the most convenient and relevant e-payment system.
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