Electronic Payments�

• Electronic payments, or e-payments, are a way of making transactions or paying bills online or through an electronic medium, without the use of physical checks or cash. The most popular methods of electronic payments include credit cards, debit cards, virtual cards, and ACH (direct deposit, direct debit, and electronic checks).

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• With most electronic payment methods, the hard costs and fees associated with traditional B2B payments like checks are no more — including paper, postage, and manual labor expenses.

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• An electronic payment is any kind of non-cash payment that doesn't involve a paper check. Methods of electronic payments include credit cards, debit cards and the ACH (Automated Clearing House) network. The ACH system comprises direct deposit, direct debit and electronic cheques (e- cheques).

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Why Propose Multiple Online Payment Methods?�

• Customers prefer a payment method that suits their needs. If that digital payment method is unavailable, they can and will abandon the cart and look for an alternative option.
• Enabling different payment methods makes a better customer experience and if one of the options failed customers would not feel stuck. It gives the customer the freedom to explore other options and get the best deal. Multiple payment methods provide a more seamless experience and increase online purchase orders.
• If you can’t collect an online payment in today’s day and age, then what’s the use of your eCommerce site?
• Though your customers may not have similar preferences when it comes to choosing the payment method you have to offer them alternatives to boost your sales.
• Most of the payment methods are simple to integrate d simple to use. Customers prefer dia digital experience throughout the shopping and offering digital payment methods will without a doubt increase your conversion rate. The more options you have more will be the profit.
• There is a wide range of online payment methods to choose from. But before choosing you to have to understand business needs, how each option works, and how it would be beneficial for you.

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Use of eCommerce payment gateway:�

• The quick and hassle-free checkout: One of the issues for an e-commerce business is cart abandonment, which often happens at checkout.
• A complicated checkout process can be considered as the main reason behind it.
• According to a survey, more than 70% of customers abandon the cart without making the purchase. A good payment gateway makes the process simple to capture most of the sales.
• E-commerce payment gateway makes the checkout process easy for customers. An eCommerce payment gateway must make the checkout experience convenient and provide necessary payment methods for customers to choose from.

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A payment gateway allows

• Make and take payments quickly and easily.
• Keep your customer's data (information) and money secure.
• Gain trust of your customers, so they are willing to hand over their money.

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To choose the right payment gateway, one should follow the following guidelines 

• You should finalize that payment gateway which is supported in your country, not all them operate globally.
• You should check what payment gateways are supported better from your ecommerce platform. For example, PayPal gateway is fully supported by Magento because the same group have created them.
• Payment gateway should be of 3.0 PCI data security standards.
• Do you need payment gateway and merchant account or an all-in-one payment service provider?
• You must see the charges and fees that will be deducted per transaction.
• What payment method do they support? For example, VISA is a payment method, Master Card is another.
• Do they support your type of business? For example, some of them don’t deal with businesses that sell adult materials, betting, gambling, firearms selling, narcotics, etc.

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�Most Popular Payment Gateway Providers�

• AYPAL − You can find all the terms and conditions of their business model on their URL – https://www.paypal.com/. PayPal is one of the longest established and probably the best-known service for transferring money online.
• Amazon Payments − The URL of this immensely popular payment getaway provider is – https://payments.amazon.com/. It was created in 2007, Amazon Payments provides your customers with the same checkout experience they get on Amazon.com
• Stripe − The URL of this payment getaway is – https://stripe.com/. No monthly fees, no extra charges for different cards and different payment methods, also for different currencies. Stripe also offers a great API (Application Program Interface) as well.
• Authorize Net − The URL for this popular payment getaway provider is https://www.authorize.net/. It is among the most powerful and well-known payment gateways. It is well-supported by e-commerce WordPress plugins.
• 2Checkout − The URL for this payment getaway provider is – https://www.2checkout.com/. 2checkout is one of the most simple and affordable credit card gateways.

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Credit Cards�

• Modern cards date to 1950 with the birth of the charge card created by two men with the introduction of the Diners Club card. The primary intention was for business travel and entertainment expenses at first, where card holders would pay for charges incurred that month. These charge cards are also referred to as non-revolving credit cards because the balance has to be paid in full at the end of each billing period.
• Today, credit cards function in a variety of ways for businesses. In comparison to charge cards, credit cards have revolving credit lines where card holders have the option to pay the balance in full at the end of each billing cycle. That is, based upon the card issuers terms.
• Then merchant accounts and payment gateways function as the traditional one-two punch for credit payments for businesses. First, money arrives in the merchant account, a holding zone where money sits before being disbursed to individual bank accounts. Payment gateways connect businesses with these merchant accounts. There are also all-in-one tools, such as PayPal, that combine merchant accounts and payment gateways. Simplified processing tools such as Stripe offer competitive rates and generally no setup or monthly fees.

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Bank Transfers�

• It’s gotten easier for customers to pay by means of bank transfer thanks to the internet. At the time of payment, they simply provide their bank routing and account numbers, which allows sufficient funds to be withdrawn from their accounts.
• The procedure for businesses to do this on a customer’s behalf isn’t too much more complex, with the business providing the bank with a reference number that is then factored into the transaction. Sometimes, the business will have a different bank than their customer. In these instances, the transaction is processed through a clearing house.
• Really, bank transfers can include any sort of electronic transfer, be it ACH, wire, and so on. It’s a versatile and secure means of payment.�

Digital Wallet�

• Digital wallets are becoming ubiquitous. The 2019 Payment Methods Report noted that in a recent year, nearly 30 billion payments were made with eWallets, or close to four for every person in the world.
• Part of the reason there are so many payments made via eWallet, is that this can mean a lot of different things. As Merchant Maverick notes, “Digital wallet is a broad term covering software that electronically stores credit card numbers, debit card numbers, loyalty card numbers, etc. on your laptop, tablet, phone, or the cloud.”
• It has an array of functionality, that site adds, including: the ability to pay at stores; make peer-to-peer payments; also make online payments; hold funds, coupons, and loyalty cards; and store IDs and transit tickets.
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Mobile Pay�

• The proliferation of smartphones in recent years has also coincided with a dramatic rise in mobile payments — “a type of digital wallet that lives only on your phone and allows you to ‘tap to pay’ in stores, often using NFC technology,” as Merchant Maverick notes — with 440 mobile contactless payment users in a recent year and the number projected to grow to 760 million in 2020.
• The reason mobile payment options are becoming so popular? They function like an actual wallet in every respect except that they keep a person from having to schlep around cash. Otherwise, credit card and banking information can be keyed into them and the wallets can function seamlessly and securely, perhaps easier to use than traditional wallets.
• As smartphone adoption continues to grow in developing nations, the number of mobile payments should keep growing.

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Automated Clearing House (ACH)�

• People might be familiar with the Automated Clearing House, or ACH as the method for direct deposit of paychecks, with more than 90 percent of workers preferring to get paid this way. But employee direct deposit is not the only use for the ACH. ACH payments are US-based bank-to-bank transfers that are aggregated and processed in batches through the Automated Clearing House (ACH) network, run by NACHA, and is common for B2B payments.
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E-cheques via the Automated Clearing House, or ACH�

• These days, electronic checks, or e-cheques, also use the ACH network to get where they need to go. With the help of the clearing house, e-cheques process safely, securely, and somewhat quickly. With e-cheques, no one ever has to worry about an e-cheques going missing in the mail or taking three weeks to get wherever it’s supposed to go. The cost to process an e-cheques is also much lower than a paper check, reportedly half as much. Processing costs for e-cheques are generally a fraction as much as they’d be with credit card transactions, which can run 3-4 percent. With e-cheques, both payment information and payments are sent by the issuing party rather than the bank, but still passes through the ACH network.

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How e-payment system works?�

• Entities involved in an online payment system:
• The merchant
• The customer / the cardholder
• The issuing bank
• The acquirer
• Payment Processor
• Payment Gateway

Working of e-payments can be explained in the following three steps

• Payment initiation – Customer finalizes the product/service and chooses the payment method to initiate the transaction.
• Depending on the payment method, the customer enters the required information like card number, CVV, personal details, expiration date, PIN, etc.
• The chosen payment method either redirects the customer to an external payment page or a bank’s payment page to continue the payment process.

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• Payment authentication – The information submitted by the customer along with other details like payment information, customer’s account information is authenticated by the operator.
• The operator can be a payment gateway or any other solution involved. If everything gets authenticated positively, the operator reports a successful transaction.
• On the contrary, if there is any problem with any of the authentication checks, the transaction fails.
• After the successful transaction, the customer gets a payment confirmation.

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• Payment settlement – After the successful authentication process, payment from the customer’s bank gets transferred into the merchant’s account by the online payment service provider.

Benefits of e-payment systems�

• People are almost comfortable with online shopping and e-payments. With this trend, accepting online payment is a must for any business.
• E-payments are making shopping and banking more convenient. They are helping customers to reach more clients locally and globally.
• E-payments are faster making the transactions efficient.
• With e-payments, customers can pay online at any time from anywhere, making them easily accessible and convenient for customers.
• It’s easy to integrate online payment solutions with businesses as many payment processing solution providers offering different types of solutions.
• Online payment solutions come with security and risk and anti-fraud tools making them reliable and secure not only for customers but also for merchants.
• E-payments are proved to be highly effective for international transactions, as they are cheaper, easier, faster, and generally are real-time.

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CONCLUSION

• In conclusion, if you are running a business, accepting online payments is the need of current times.
• You need to find out what your target customers are preferring and accordingly you need to provide the most convenient and relevant online payment solutions.

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