What are the main types of electronic payment systems?

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Online Payment

E-commerce, also known as internet commerce, refers to the act of selling and purchasing goods through online platforms. It also involves the electronic transfer of money and data as part of the transaction. Online shopping is a mode of electronic commerce. In online shopping, money is exchanged through online payment systems known as electronic payment systems. These are forms of money transfer that do not require the use of real money. Thus, there are several forms of electronic payment or online payment. Some examples include Payoneer, PayPal, Skrill, and Google Wallet. Credit card payments are, however, the most commonly used by online websites like Yeebia which is a free advertising sites. There are three main categories of online money payment, which we will discuss in this post.

  • Internet Banking

This category involves all types of payments that do not require the use of a physical card like a credit card. Payoneer, PayPal, and Skill, just to name a few, are forms of internet banking. These accounts are operated online. They work in such a way that the client has to click to the official website of the internet bank, provide personal information like ID number and phone number, then open the account.

Some of these sites may require physical bank account details, while some may not. Instead of entering card or bank account details on the online shopping site, with internet banking, you use a payment gateway that allows you to choose the specific internet bank from which you wish to pay. You will then be redirected to the organization website of the online bank, where you authenticate your identity before approving the payment. Authentication is essential because it helps prevent such issues like online fraud. This mode of payment is safer than using credit cards because they are harder to hack.

Online Payment
  • Credit cards

Credit cards were initially the most common form of online payment in the market. However, the market has gone through a series of changes that introduced several other types of online payment. For you to own a credit card, you need to have an active bank account. While shopping online using a credit card, you will be required to provide details like your credit card number when making payments. Using credit cards is easy but very risky. The chances of fraud are higher and more significant since the card is directly linked to your bank account.

  • Mobile Money Wallets

This mode of payment is prevalent in developing countries that do not have access to banking facilities. This means that more citizens own a mobile phone than bank accounts. For instance, in Kenya, more people use a mobile money wallet known as M-Pesa than bank accounts. Such clients use their mobile numbers as a form of the bank account number. The mobile service providers allow them to add money to their numbers and use them for online payments.

Take Away

Different online shopping websites allow their customers to use a variety of online payment models. Internet banking is more common because more people trust the mode than using credit cards.

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