Nowadays, e-payments are an essential part of any e-commerce business and their popularity is growing rapidly. According to statistics, digital payments are projected to grow even further in 2021. In today’s article, we will tell you about electronic payment systems in general as well as e-payment methods and types.
What Are E-payments?
The term e-payment refers to a technology that helps customers make payments using electronic methods. For example, they can easily make an online purchase via electronic payment solutions.
What Is an Electronic Payment System?
An e-commerce payment system is a tool that allows customers to pay for products or services electronically. When designing electronic payment systems, the system’s effectiveness, the security of each transaction, and degree of compatibility with the online shop should be taken into consideration.
E-commerce Payment Processing: How Does It Work?
Let’s look at the steps involved when processing an e-commerce payment.
- Customers browse a website, select the products they would like to buy, and add those products to their order to proceed with the purchase.
- After proceeding to the checkout, online customers are asked to complete an online payment form with their card details via an electronic payment system.
- Once cardholders have submitted their billing information and clicked the Buy button, the e-payment gateway determines if the card is valid. In some cases, 3DS tools are used to authenticate the cardholder’s legitimacy and identify which bank issued the card.
- To ensure that this information is sent securely to complete a payment, the card numbers are encrypted by the payment gateway. The payment processor then informs the acquiring bank whether or not to transfer the funds to a merchant.
E-payment System Methods
The method of an electronic payment system is the way e-payments are implemented. Usually, these methods are classified into two main areas: The first refers to credit payment systems that include features such as credit or debit cards, e-wallets, and smart cards. The other is cash payment systems that comprise direct debits, e-checks, e-cash, and stored-value cards.
Two Types of E-Commerce Payment Transactions
The type of transaction means how frequently transactions are made. Listed below are the two main transaction types with examples of e-payments:
- One-time payments – the most common type of payment (when a customer enters his/her card and personal information in a one-off event on a checkout page).
- Recurring payments – the type of payment that is gaining popularity nowadays (when a customer repeatedly pays for a product or service over time, for example, media subscriptions or various educational courses).
How to Make Electronic Payments More Secure
Electronic payment systems are popular and convenient, even though they require more security layers for the transactions. At PayFasto, we provide effective e-commerce payment processing for our clients. With instruments such as fraud and chargeback management, 3D secure, and PCI compliance of data, merchants can rest assured that their online business will operate safely with PayFasto.
If you are looking to launch your online business, electronic payments or e-payments are the areas that need the most attention. A reliable e-payment solution will ensure that your e-commerce company is safe and effective. If you have any questions regarding e-payment systems, please don’t hesitate to contact us for assistance.