Online Payment Gateways- An Overview
Nowadays, online payment systems are playing a very pivotal role in the E-commerce landscape. As businesses grow and expand their operations, the need to offer online payment mechanisms becomes imminent. The use of online payment gateways dates back to the 1960s, where they were a part of the running operations of banks and other financial institutions. This is when ATMs and credit cards surfaced as a convenient payment gateway to facilitate consumers. This was a turning point in the commercial sector because it helped to reshape the very dynamics that shape and affect businesses. Online payment mechanisms have helped fuel the creation of start-ups and new business ventures.
Electronic payment gateways started with Electronic Fund Transfer which transmits credit card numbers via safe private networks as transactions between banks and big companies. Other types of payment gateways have also emerged since then, including the likes of credit cards, electronic cash gateways and electronic check systems.
Credit Cards- The Instant Mode of Payment
Credit cards are the most common and popular choice of the various categories of payment mechanisms, and are also used worldwide. They allow the use of credit cards when buying goods and services online, making online shopping very expedient and accessible. They also facilitate different types of payments to actually take place in B2B, B2C and C2C business environments. They provide an automatic verification system which ensures the validity of the card. Customers prefer to pay via credit card because it allows them to cancel the transaction if need be.
Electronic Payment Networks
There are businesses that will provide money transfer services directly to the end users. These include names like Paypal, WebMoney and others. Let us describe the model of an Electronic Transfer company. First of all, they have a well-structured and well-organized network that allows for efficient emailing of payments; they also accept credit cards and other types of electronic payments ; an organized linkage of buyers and sellers, and a secure model that allows smooth conduct of business.
What has helped these businesses to click is their ever growing network of buyers and sellers. The growing reliability and trust put in this electronic payment system and the pre-requisite to register on PayPal has helped to increase the number of buyers and sellers exponentially and has helped them to thrive manifold.
Advantages of E-Payment Gateways
Electronic payment systems were designed to counter some of the drawbacks of credit card payment mechanisms. They therefore are a non-credit card payment system.
Certified Protection from Possible Fraud
The reason behind their development is to protect the consumer from possible fraud by keeping credit card numbers confidential and not revealing them to merchants. It helps prevent unauthorized transactions, since in regular circumstances, your financial data is not fully secure. This may cost you a great deal of money. PayPal and other E-payment systems have helped to double check details before giving the green signal to carry out a transaction. Another aim is to facilitate people who do not own credit cards to partake in online transactions.
Safety of a Customer’s Credentials
Additionally, these systems have helped to safeguard the personal credentials or information of a customer through a phenomenon known as payment tokenization which has helped to convert all this personal information into a code.
Provision of Multi-Currency Payments
If you look at PayPal, it caters to nearly 24 global currencies which results in smooth and efficient currency exchange. It is also present in several countries which gives it its international status and recognition and therefore, much needed visibility.
PayPal has the merit of being easily accessed and user-friendly because you can sign up on PayPal and similar E-payment gateways in a few simple steps.
These are cards that are similar to credit cards, but save information on a microprocessor chip. A microchip can carry loads of data compared to a magnetic chip which is why a smart card can be used for many purposes. These can be password secured to ensure that they can only be used by the owner.
A Word of Caution!
There is literally a plethora of options available when it comes to online payment gateways. It is important to consider the one-off installation fee, confidentiality of the personal data of customers, the payment processing time, the adaptability of currencies in several countries and the transaction rates which also covers exchange rates. So if you are a seller, do your homework, take time out to gather all the essential information about the particular payment system in question, ask the experts and think through the pros and cons of different options. You should definitely work your way through all these payment gateways because they surely work in miraculous ways by opening new market avenues for you, nationally as well as internationally.