Explain the various types of online payment methods.

 There are various types of payment gateways consumers are using. It can be possible in brick-and-mortar which we usually call physical stores and shopping online which we call click-and-mortar stores. In physical stores, payment gateways consist of the point of sale (POS) terminals used to accept payments by card or by phone. In online stores, payment gateways are the “checkout” portals used to enter credit card information or credentials for services such as Google Pay, Amazon Pay, Facebook Pay and WhatsApp Pay.Using multiple gateways make great business sense when you considering the flexibility it gives to your team. There are various kinds of E-payment present in a market, some are mentioned below:

·         Automated clearing house.

·         Wire transfers.

·         Item processing.

·         Remote deposit capture.

·         FedLine Access Solutions.

·         Automated Teller Machines.

·         Card Services (ATM, credit, debit, prepaid)

·         Mobile payments

·         Crypto currency

 

On the other hand E-payment methods could be further classified into two areas, credit payment systems and cash payment systems which we usually called Pre Paid & Post Paid E-Payment System.

Prepaid refers to the scheme in which you buy credit in advance before availing services. Postpaid is defined as a scheme in which the customers are billed at the end of the month for the services availed by them. Examples include plastic card, on-line transactions, concerned bank, performed by phones or by filling form on the website, Cyber Cash, encrypted payment, Internet Cheques, cheques for deposit, Process them internally, and clear and settle between banks, cheques handwriting signatures.

 

Credit Cards

Credit card is a plastic card which is issued by a bank. It is issued to customers of high credit ranking, the necessary information is stored in magnetic form on the card. A card holder can purchase the item from the shop or the showrooms and need not pay cash. He has to flash the card in machine at the place where he is making purchases. Banks issue credit card to the customers up to a certain limit. The customers can purchase goods/services from the authorized showrooms without carrying physical cash with them. The bills are presented by the showroom to the authorized branch. This bill is presented by the paying branch to the issuing branch. Issuing branch informs the customer about the debit. Banks take nominal charges for credit cards.

 

Cyber Cash

 Unlike Credit card, Cyber Cash is not directly involved in handling funds. In Cyber cash system, after deciding what is to be purchased the customer makes payment to the merchant through credit card without disclosing the credit card number to him. The credit card number is sent to the merchant in encrypted form. The merchant forward the encrypted payment with his private key to the bank's Cyber Cash gateway server. The bank's Cyber Cash gateway server decrypts the information, processes the transaction and forward it to the merchant's bank.

     It is basically a form of the e-payment system which requires 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.

Internet Cheques

A cheque is a signed paper document that orders the signer's bank to pay an amount of money to a person specified on the cheque or bearer from the signer's account on or after a specified date. Cheques pass directly from the payer to the payee, so that the timing or the purpose of the payment is clear to the payee. The payee can deposit the cheque in an account of his choice or cash it. Banks operate extensive facilities to accept cheques for deposit Process them internally and clear and settle between banks.

 

Smart card

It is a plastic card with a microprocessor that can be loaded with funds to make transactions; also known as a chip card.

Cash Payment System

A. Direct debit — A financial transaction in which the account holder instructs the bank to collect a specific amount of money from his account electronically to pay for goods or services.

B. E-check — It is 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.

C. E-cash – It is a form of an electronic payment system, where a certain amount of money is stored on a client’s device and made accessible for online transactions.

D. Stored-value card — A card with a certain amount of money that can be used to perform the transaction in the issuer store. A typical example of stored-value cards are gift cards.

 

E-wallet

It is clear that mobile wallets are slowly making a mark as a form of payment method, but cash still remains to be an imperative necessity for consumers life. Experts from different sectors including network operations, banks, express that, mobile payments will quickly replace traditional wallets over time. Recent studies show that consumers’ awareness has increased mobile payment usage. E-Wallets a form of prepaid account that stores user’s financial data, like debit and credit card information to make an online transaction easier.

 

The Reserve Bank of India has three categories for wallets Closed, semi- closed and open. A closed wallet can be used to buy goods and services exclusively from one company. Semi-closedwallets,on the other hand can be used to buy goods and services, including financial services, at specified merchant locations, which have a specific contract with the issuer to accept the payment instruments. Open wallets can, however, be used for purchase of goods and services, including at merchant locations or points of sale terminals that accept cards, and also for cash withdrawal at ATMs or from business correspondents. These wallets can only be issued by banks. Money can be added using Net banking, and credit or debit cards. Prepaid wallets have transaction limits and validity periods.

 

Crypto Currencies

Crypto currencies are rapidly gaining interest as a payment method for online transactions, particularly among young, moneyed professionals with IT expertise.

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