Electronic Payment
Electronic payment (e-payment) is any digital financial payment transaction involving currency transfer between two or more parties. It is an electronic payment device that is used in modern times. This has payment by via net possible to businesses, banks and citizens. However, it is important that when you are talking about e-payment you should know that they are connected e-Business and moreover, the online payment has become one of the solutions to businesses.When it comes to payment options, nothing is more convenient than e-payment. You do not have to write a check, swipe a credit card or handle any paper money; all you have to do is enter some information into your Web browser and click your mouse. It is no wonder that more and more people are turning to e-payment as an alternative to sending checks through the mail.
Methods and types of electronic payment
An e-payment is any kind of non-cash payment that does not involve a paper check. Methods of e-payment include credit cards, debit cards and the Automated Clearing House (ACH) network. The ACH system comprises direct deposit, direct debit and electronic checks (e-checks).
For all these methods of e-payment, there are three main types of transactions:
1. A one-time customer-to-vendor payment is commonly used when you shop online at an e-commerce site, such as Amazon. You click on the shopping cart icon, type in your credit card information and click on the checkout button. The site processes your credit card information and sends you an e-mail notifying you that your payment was received. On some Web sites, you can use an e-check instead of a credit card. To pay by e-check, you type in your account number and your bank's routing number. The vendor authorizes payment through the customer's bank, which then either initiates an electronic funds transfer (EFT) or prints a check and mails it to the vendor.
2. You make a recurring customer-to-vendor payment when you pay a bill through a regularly scheduled direct debit from your checking account or an automatic charge to your credit card. This type of payment plan is commonly offered by car insurance companies, phone companies, and loan management companies. Some long-term contracts (like those at gyms or fitness centers) require this type of automated payment schedule.
3. To use automatic bank-to-vendor payment, your bank must offer a service called online bill pay. You log on to your bank's Web site, enter the vendor's information and authorize your bank to electronically transfer money from your account to pay your bill. In most cases, you can choose whether to do this manually for each billing cycle or have your bills automatically paid on the same day each month.
Benefits of Electronic Payment
1. E-payment is very convenient for the consumer.In most cases, you only need to enter your account information, such as your credit card number and shipping address once the information is then stored in a database on the retailer's Web server. When you come back to the Web site, you just log in with your username and password. Completing a transaction is as simple as clicking your mouse. All you have to do is confirm your purchase and you're done.
2. E-payment lowers costs for businesses.Low set-up and transaction fees. The more payments they can process electronically, the less they spend on paper and postage. Offering e-payment can also help businesses improve customer retention. A customer is more likely to return to the same e-commerce site where his or her information has already been entered and stored.
3. No risks.
When processing the order, you can be sure, that the order has been paid for. Your credit risks are thereby significantly reduced.
4. It is simple.It is easy for customers to pay with e-payment. They only have to use their Solo Internet codes to approve the pre-filled payment order and the transaction is done!
5. Speed.
Confirmation of the payment made by customers reaches the organization in moments.
6. In addition, below are some of the points of benefits of Electronic Payment:
(a) Easy to integrate into the merchant web site.
(b) Comprehensive reporting tools provided via the e-payment web site with secure log in.
(c) Ability to acquire a merchant account with multiple banks.
(d) 24-hour support line.
(e) Outsourcing of security means less reason for merchant site to be attacked.
Concerns about Electronic Payment
1. Identity theft. The main drawbacks to e-payments are concerns over privacy and the possibility of identity theft. Fortunately, there are many safeguards available to protect your sensitive personal information from falling into the wrong hands. You can defend yourself against identity theft by using virus protection software and a firewall on your computer. You should also make sure that you send your credit card information over a secure server. Your Internet browser will notify you when a server is secure by showing a lock or key icon. In addition, the URL on a secure site is usually designated by the prefix "https" instead of "http." Retailers do their part by using data encryption, which codes your information in such a way that only the key holder can decode it.
2. Privacy concerns aside, some people simply dislike making e-payments. They find the setup too time-consuming and do not want more logons and passwords to remember. Others simply prefer the familiarity of writing checks and dropping envelopes in the mail. For some people that do not have the basic computer skill, there mind be a problem for them to do e-payment as well. Regardless of these concerns, e-payment will likely continue to rise in popularity.
3. There is a great risk involves in the theft or losing of the smart cards. In case the cards fall in unsafe hands, there is a danger of the expenditure of your entire bank balance. There are measures to inform the concerned authorities about the loss of the card. But, the time between losing the card and informing the authorities is critical. Unauthorized users may carry out transactions in your name during this period of time.
CONCLUSION:
This was not to discourage you from taking to electronic payments although there are some disadvantages of e-payment. It was rather to make you aware of the disadvantages of electronic payment systems. While we are moving towards a paperless environment, we are inviting issues related to electronic security.
With all the benefits of e-payment, it is no wonder that its use is on the rise. E-payments grew as payment by check declined, which means that e-payments are replacing checks.
Related Links:
1. http://communication.howstuffworks.com/electronic-payment.htm
2. http://star-techcentral.com/tech/story.asp?
3. http://ezinearticles.com/?Disadvantages-of-Electronic-Payment-Systems&id=2003183
(a) Easy to integrate into the merchant web site.
(b) Comprehensive reporting tools provided via the e-payment web site with secure log in.
(c) Ability to acquire a merchant account with multiple banks.
(d) 24-hour support line.
(e) Outsourcing of security means less reason for merchant site to be attacked.
Concerns about Electronic Payment
1. Identity theft. The main drawbacks to e-payments are concerns over privacy and the possibility of identity theft. Fortunately, there are many safeguards available to protect your sensitive personal information from falling into the wrong hands. You can defend yourself against identity theft by using virus protection software and a firewall on your computer. You should also make sure that you send your credit card information over a secure server. Your Internet browser will notify you when a server is secure by showing a lock or key icon. In addition, the URL on a secure site is usually designated by the prefix "https" instead of "http." Retailers do their part by using data encryption, which codes your information in such a way that only the key holder can decode it.
2. Privacy concerns aside, some people simply dislike making e-payments. They find the setup too time-consuming and do not want more logons and passwords to remember. Others simply prefer the familiarity of writing checks and dropping envelopes in the mail. For some people that do not have the basic computer skill, there mind be a problem for them to do e-payment as well. Regardless of these concerns, e-payment will likely continue to rise in popularity.
3. There is a great risk involves in the theft or losing of the smart cards. In case the cards fall in unsafe hands, there is a danger of the expenditure of your entire bank balance. There are measures to inform the concerned authorities about the loss of the card. But, the time between losing the card and informing the authorities is critical. Unauthorized users may carry out transactions in your name during this period of time.
CONCLUSION:
This was not to discourage you from taking to electronic payments although there are some disadvantages of e-payment. It was rather to make you aware of the disadvantages of electronic payment systems. While we are moving towards a paperless environment, we are inviting issues related to electronic security.
With all the benefits of e-payment, it is no wonder that its use is on the rise. E-payments grew as payment by check declined, which means that e-payments are replacing checks.
Related Links:
1. http://communication.howstuffworks.com/electronic-payment.htm
2. http://star-techcentral.com/tech/story.asp?
3. http://ezinearticles.com/?Disadvantages-of-Electronic-Payment-Systems&id=2003183
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12 comments:
Hi, I am still a student. I am curious that is it easy to pay for goods online?
Yes, it is easy to make payment for goods online. The e-payment software requires minimal information from the customer such as card number, expiry date, name on the card, and transaction amount.
May i know what type of credit card does e-payment process?
Accept Bankcard, Visa, Mastercard, American Express and Diners Club.
But,please take note. To accept American Express and Diners Club cards,additional Merchant Accounts are required with American Express and Diners Club respectively.
is there a requirement to have a shopping cart facility to use the e-payment system?
No, it is not necessary to have a shopping cart to use e-payment system can be integrated with an existing shopping cart program or Interactive Worldwide(developer of e-payment) can supply a shopping cart program known as e-merchant.
May i know what is a merchant account?
A merchant account is a facility with a bank or financial institution enabling a business to accept credit or charge card payments in exchange for goods and services. It is also known as a Merchant Agreement.
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