Are you thinking of shifting to online payment methods? Looking for more clarity on how online payment methods work? Confused about which online payment method to go for?
Don’t worry because you have clicked on the right page. By the time you finish reading this blog, you’ll understand all the important things about having multiple online payment methods.
Why Is Online Payment Required?
The need for online payment options arose due to the increment in technology. Businesses are rapidly going online and more people now have access to mobile phones and associated facilities.
The government is now promoting going cashless which has given a surge in online payments. Thus, the need for online payment methods has significantly increased. Having online payment options becomes a prerequisite once you have your business online.
More importantly, Covid-19 has escalated the use of online payment methods as they are safer. Effective online payment options ensure that your customers have a smooth purchasing experience. Also, your customers get more flexibility if your business has multiple payment options.
This increased flexibility and enhanced customer experience paves way for more revenue by increasing sales. And as mentioned earlier, online payment options offer more safety. Therefore, we can say that having online payment options is in the favor of growing your business.
Benefits Of Having Online Payment Methods
First and foremost, multiple payment methods ensure global business reach. This is because it opens up your business to every consumer in the world. Also, it offers more flexibility to the customers giving them a convenient experience.
Moreover, online payment options offer more security to business owners. It limits the risks associated with using cash or bank fees for bounced checks. Online payment methods are easy to monitor and control. This is because transaction history is properly maintained in online payments.
Online payment methods minimize the use of transaction slips and other paperwork. This reduces the business’s carbon footprint and gives the business an ecological edge. Also in this Covid-19 era, online payment options offer more safety.
How Does Online Payment Work?
To make online payment possible, you need to set up a merchant account and payment gateway. The system starts when the customer clicks on the “Buy Now” option on your website, he/she is directed to the payment gateway. The payment gateway picks up the online payment information and transfers that to the payment processor.
The role of the payment processor is to transfer that transaction to the relevant card network. The card network passes that information to the issuing bank (customer’s bank) which authenticates the transaction. If everything is good, the transaction is authorized and the amount is debited.
Then the reverse process starts. Now, the issuing bank informs the card network about the successful completion of the transaction. The Card network then informs the payment process which in turn alerts the payment gateway. Finally, the customer gets confirmation that the transaction was successful.
The whole process is swift and hassle-free for both the business owner and the customer. The online payment process may seem lengthy but it is worth noting that the whole process is completed in around 3-6 seconds. The infrastructure and the communication between all the parties are robust.
Different Types Of Online Payment Methods
There are varied online payment methods. Each of these methods come with their own advantages. The most used online payment methods are as under –
E-wallets
The use of e-wallets for payments has increased tremendously. For using e-wallets, both the business owner and the customer need to sign up for it. It requires you to add the bank details once. This eliminates the need for re-entering information for every transaction.
Debit cards/Credit cards
Debit and credit cards are the most common mode of online payment globally. All the customer needs to do is enter the card details correctly and the online payment system handles the rest.
The payment system has extra added security features to ensure that no sensitive information is divulged. But credit and debit cards come with transaction fees which can be of concern for the business.
Net banking
This mode of online payment is referred to as “if all fails” and “internet banking”. In net banking, no card information is required, unlike debit/credit card payments. A bank can easily help set up net banking services for the customer.
The rest of the process is easy. The customer only needs to log in using his/her net banking credentials. The only requirement to use this mode of payment is access to net banking facilities.
Summary
Online payment methods are faster, easier, and more secure modes of payment than cash. They are beneficial for both the consumers and the business. The options are many such as e-wallets, debit/credit cards, and net banking. And given the current scenario, online methods of payment are more popular.
There is no one perfect online mode of payment for your business. You need to have all these different modes of online payment for your business. This will provide the customers with more flexibility.
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