When you buy products or services on the internet and pay for them using an electronic payment method, this method of payment that does not require cheques or cash is referred to as an electronic commerce payment system. It is sometimes referred to as electronic or online payment systems.
The rising popularity of internet-based transactions and shopping has led to the rise of various e-commerce payment platforms, and technology has been developed to enhance and improve the security of electronic payment transactions.
Paperless electronic commerce has revolutionized the process of processing payments by cutting down on paperwork transactions, transaction costs, and personnel costs. In addition, they are easy to use, take less time to process than manual processing, and can aid businesses in expanding their reach to the market.
Types of Payment Methods for ECommerce
1. Payments made with credit or debit cards:
2. Payment gateways
3. Digital wallets
4. Cash-on-delivery: cash-on-delivery
5. QR code
6. Bank Transfer
7. Direct Deposit
Let discuss all these methods in detail
1. Credit/Debit card payments:
As a global payment option, by accepting payments through cards, merchants can expand their reach to a global market.
Credit cards are easy to use and safe. However, customers must enter the card’s number, the expiry date, and CVV. It was added as a preventative measure. The CVV can detect fraud by comparing details about the customer and their CVV number.
Debit cards are the most secure payment method for making transactions online.
Debit cards are typically preferred by those who use online shopping within their budget. The major distinction between a debit and a credit card is that with a debit card, you can only pay using funds currently in the bank’s account; unlike credit cards, the amount spent is charged, and the payment is due at the conclusion time of billing.
2. Payment gateways: best payment methods online
Payment gateways play prominence in facilitating international transactions in e-commerce. The majority of online retailers incorporate payment gateways in their online stores because of their ease of accessibility and the speed that these solutions provide.
The payment gateways are trusted third-party providers that connect banks, payment processors, service providers, and merchant accounts. Some of the most well-known payment gateways are PayPal and Stripe.
However, these services generally differ regarding fees for access to platforms and transactions. Therefore, they can be costly for B2B sellers of e-commerce. It is, therefore, crucial to evaluate conditions before choosing a service.
3. Digital wallets
Digital wallets
Digital wallets are a revolutionary method of paying for online purchases. Inspiring m-commerce options by providers such as Apple Pay, Samsung Pay, Google Pay, and Alipay digital wallets are changing how consumers pay for e-commerce transactions.
What happens with digital wallets is that the customers pay for their virtual wallets through the provider, typically using their bank account. They can then pay for online purchases with their e-wallet without entering their payment details at every point of purchase.
Many manufacturers of mobile phones incorporate smart payment technologies with digital wallets to ensure customers can make payments with just a swipe of the phone’s screen. Likewise, online retailers who want to make more rapid payments should think about adding digital wallets to their websites.
4. Cash-on-delivery
A cash-on-delivery service (COD) within your online store allows customers to pay cash or via credit card for the items and if needed to pay for the delivery when the package is delivered.
The primary reason the cash-on-delivery method is in use today is to ensure security. For the purchaser, the convenience of not paying until the package has arrived is a safe way to feel confident about the purchase. If they don’t get it, they don’t have to pay, and the online store will not have their bank information.
Sometimes, buyers can determine if the item is damaged before paying, allowing them to request a refund or exchange without charges.
It is usually utilized for “offline” consumers and buyers who do not have a payment option that can be made online, like the ones discussed in this article.
However, for the seller, allowing buyers to purchase via the cash-on-delivery option could mean paying an additional fee. It’s because couriers usually charge a higher rate for COD services and the possibility of receiving fraud in the order and issues with shipping, such as missing recipients, refusal of the parcel, or even abandoning orders (if the transaction is made using an automated courier service).
5. QR code
Technology advancement is another reason QR Code payment is increasingly well-known. ECommerce’s payment method is simple, compact, easy to use, and user-friendly. QR Code feature is currently accessible on mobile apps for banks. Google Products and Services like Google Charts and Google Maps and on buses, signs and buses, magazines, business cards, and websites, as well as on the products sold in convenience stores and supermarkets.
Smartphone users use their cameras to scan the QR code to transfer cash, pay bills and buy items. In just one swipe and a few minutes, you’ve successfully completed transactions at supermarkets, restaurants and convenience stores, taxis, and even eCommerce sites or any other product with an identifier. QR, without cash or card, or cash, don’t worry about sharing personal details at cash points.
6. Bank Transfer
One of the safest secure payment methods is Bank Transfers when it comes to shopping online. Because it can make online shoppers be taken advantage of by fraudsters. Many people are cautious when making purchases on websites that sell online; some aren’t willing to enter their credit card or debit card information.
Most people prefer using debit and credit cards; therefore, transfer transactions gradually go out of style despite being considered safe. Transfers to banks are safe since the customer must approve the transactions; they must authenticate and verify every purchase they make from their bank accounts. As a result, bank transfers make shopping longer and take longer.
7. Direct Deposit
Utilizing Direct Deposit as the name implies, allows buyers to transfer charges to sellers’ accounts directly. In addition, with Direct Debit mandates, users can request their banks to authorize regular payments.
In reducing the chance of loss or theft, they’re a more secure payment method, particularly for non-eCommerce transactions. Furthermore, no intermediaries are needed, which means it’s an efficient method to transfer funds.
Direct Deposit payments are often used to plan recurring expenses like business salary payments or subscription-based charges for individuals. Although it could become less popular due to new methods, it will remain a viable payment method.
Best payment gateways for ecommerce stores
1. Shopify
Every transaction is monitored and displayed in real time. So it’s only a little work to keep track of your transactions, sales, and monthly figures.
Shopify is a great option for your customers as well. Once you’ve got an account, you’ll be capable of accepting a wide variety of popular payment methods, such as:
- Visa
- Mastercard
- American Express
- Discover
- PayPal
- Google Pay
- Apple Pay
- Facebook Pay
Shopify Payments is a part of each Shopify plan. There are integrations to dozens of other payment options offered by eCommerce that are not subject to transaction charges. There’s no transaction cost for using Shopify Payments.
2. PayPal
Payment Processing Fee: 3.49% + $0.49 (fixed)
PayPal is among the widely utilized payment method for e-commerce stores. It is a reputable payment method in more than 203 countries. It is compatible with all popular credit cards like Visa, Mastercard, American Express, Citibank, and others. For you to begin dropshipping, it is necessary to have an enterprise PayPal account.
3. Stripe
Stripe is considered a formidable rival and is a rapidly growing company that is expected to catch up to PayPal. The company was established in 2010. Stripe is estimated to be worth approximately $20 billion within a relatively short time. Stripe provides a trial period with delays in payments.
There are no fees for refunds. Web developers think it is one of the most simple to integrate, set up, and maintain. Contrary to PayPal, the Stripe payment gateway lets customers stay at their computers while making a payment without redirecting to the payment site, thus providing seamless customer service. Additionally, it is compatible with a variety of types of payment; it can also be used to pay for cryptocurrency, such as Bitcoin. Because it is still expanding, Stripe is available in 21 countries.
4. Authorize.net
Authorize is renowned for its developer-friendly API, as well as its versatility in creating a personalized and comfortable user experience. It is highly secure and praised for its advanced fraud detection software that helps prevent fraud and chargebacks. It doesn’t limit the amount of money that transactions can be made, making it easy to make transactions as well as instant money transfers. This payment gateway comes with many additional options, such as fraud prevention and a simple checkout process. The only difference is that it charges an annual fixed charge as well as transaction costs.
5. 2Checkout
2Checkout is a well-known worldwide payment processor that lets businesses take online payments from consumers all over the world. It comes with a wide range of options for localized payments and features that aid both merchants and clients in making the transaction process more efficient.
It is a U.S.-based payment gateway that can support different payment methods and transactions across the globe. It is safe and reliable. There are more than 50K merchants using the 2Checkout payment gateway around the world. It is compatible with 8 payment methods and languages, as well as 15 different payment options and 87 different currencies on international markets.
The final word
There are many payment options that you can integrate into your store online. It is important to select the most effective eCommerce payment method which is compatible with your company’s goals. These options will guarantee that you will be able to complete transactions efficiently, correctly, and safely and ensure that your customers are satisfied. We hope that, with our suggestions, you can understand more about the payment method and determine which ones are appropriate for your online business!
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