How does online payments method of payment work?
Online payment methods
Buyers will use this type of payment when they purchase goods online or offline. They can use different types of online payment methods, including debit/credit cards, wire transfers, net banking, and digital wallets.
- Banking Cards. Banking Cards are one of the widely used payment systems in India. ...
- Aadhaar Enabled Payment System (AEPS) ...
- Unified Payments Interface (UPI) ...
- Mobile Wallets. ...
- Internet Banking. ...
- PoS Terminals. ...
- Mobile Banking. ...
- Final Words.
The merchant sends their batched approved authorizations to the payment processor. The payment processor sends the authorizations to the card association. The card association forwards them to the issuing bank. The issuing bank transfers the funds to the merchant bank and charges an 'interchange fee".
Websites protect payment information by encrypting the data before transmitting it. Two major protocols accomplish this encryption — Secure Sockets Layer (or SSL) and Transport Layer Security (or TLS). TLS is the newer protocol, with stronger encryption algorithms.
The process
Step 1: Customers select the product or service they wish to purchase and proceed to checkout. Step 2: They choose their preferred payment options, like credit/debit card, e-wallet, or wire transfers. Step 3: Payment information is collected and sent as encrypted transaction data to the payment processor.
Debit and credit cards
Not only are they quick and easy to use, but they offer a relatively high level of security and protection of your private data. If you're using a credit card, you don't actually pay for the goods or services until your credit card bill is due.
Its vulnerability is costly both to merchants and customers who are often easy prey when conducting online transactions if there's a lack of secure third-party platforms or gateways. Businesses and their clients are more vulnerable to credit and debit card fraud, data breaches and identity theft.
E-payments are convenient, fast, and secure, but they also come with various risks, such as fraud, cyberattacks, compliance issues, and operational failures. To protect your business and your customers, you need to design and implement an effective e-payment risk management framework.
The online payment systems allow the seller to accept payments and the buyer to send payments over the internet. Examples of online payment companies include PayPal, Alipay, WeChat Pay, Paytm, Google Pay, and Apple Pay.
What online payment system is best?
- Authorize.net — Best overall.
- PayPal — Best for sending and receiving payments.
- Google Pay — Best for storing multiple payment methods.
- Amazon Pay — Best for a streamlined checkout.
- Dwolla — Best for third-party integrations.
- Stripe — Best for customization.
Your bank may not allow online debit card purchases. Some banks have policies that prohibit debit card purchases over the internet. This is because debit cards are linked directly to your checking account, and banks are concerned about fraud and identity theft. Your debit card may not be enabled for online purchases.
Making online debit card payments requires sharing your card details and other sensitive information, leaving your financial information vulnerable in the case of a data breach. When exposed, this shared data puts you at risk of falling prey to cybercrime, including identity theft and card fraud.
Globally, credit and debit cards and digital wallets are the most popular ecommerce payment methods, but other payment methods, like bank transfers and cash on delivery (COD), remain popular in certain regions. The use of mobile payments is also growing, particularly in markets with high smartphone penetration.
Once you are at the payment checkout, you need to choose “Pay Using Debit/ Credit Card. Once you select on the option, you need to specify the type of card, i.e., Debit Card and whether it is a Visa or Mastercard. Then, type the 16-digit Debit Card number which is on the front side of your Debit Card.
If you don't have proper security measures in place and the criminal obtains your debit card information, they can use it for fraudulent online or over-the-phone transactions. These types of transactions don't require a PIN or signature, making the criminal's job easier.
The bottom line
From a legal perspective, credit cards generally provide more protection against fraudulent activity. But, there are ways to mimic some of these protections with a debit or prepaid card. Deciding which is best for you will help protect your money whether you're spending online or swiping in store.
Because debit cards withdraw money from your checking account, a criminal who gets your account information or PIN could empty your account. For this reason, credit cards are considered safer to use online because funds aren't directly taken out of your accounts.
PayPal, Venmo, Western Union, and Cash App are some of the most popular payment services that do not require you to own a bank account to receive money. If you use a payment app like PayPal, Venmo, or Cash App, your recipient may sign up for the app and link a prepaid debit card.
The very first step in online transaction is registration. A person is required to register himself and his basic information with the vendor so that authentication of a person can be done and transactions can be carried out without any hassle in future.
How long is online payment process?
In general, your customers' online payments should clear within 1 to 3 days. The exact processing times can vary depending on the card issuer. For new and inexperienced merchants, this delay can be a point of concern.
- Credit cards. By and large, credit cards are easily the most secure and safe payment method to use when you shop online. ...
- ACH payments. ...
- Stored payment credentials. ...
- Credit cards with EMV chip technology. ...
- Credit cards with contactless payment. ...
- Payment apps.
ACH payments go through clearinghouses that enforce strict regulations, making it a secure payment method. ACH also typically offers lower fees because it's all digital and eliminates many of the processing fees associated with cards or checks.
- Virtual credit cards. ...
- Digital wallets. ...
- Prepaid cards. ...
- ACH payments. ...
- Cryptocurrency.
When you purchase something using your debit card, in most cases all your Bank will know is who the merchant was, and the invoice amount, and of course details of the date and time of purchase. The merchant may also provide a transaction reference number so that you can cross check with your ...
