Electronic Payment Systems
A payment gateway is a channel that processes credit cards, debit cards, net banking, and other electronic payment systems (online payment methods ) to make a secure transaction. It is the most secure electronic payment system. A buyer uses his debit/credit card, payment gateway debits product price from a bank and send this amount to the seller’s account to complete the online purchase. A payment gateway provides efficient and secure services. They charge for their services from merchants. It is the safest money exchange platform and has lesser possibilities of being a victim of fraudulent activities. Every payment gateway has its fraud protection system to protect merchants from such financial obligations. Amongst the several payment gateways worldwide are –
Types of Electronic Payment System
A payment gateway supports secure electronic payment systems to ensure the security of confidential data of buyers and merchants both. These electronic payment methods are –
1. Prepaid Debit Card
These cards are preloaded with money before using them at any place, making it suitable for use online and offline. A major advantage of using this card is that you may not be able to overspend as no credit is provided. You can only withdraw or pay withing the limitations, saving your economic Stability. The payment gets rejected when you try to spend more money than available on the card. Regarded as one of the best anonymous payment methods which are widely used at every retailer. These cards can be used for anonymous payments offline as well. Massively used by the people. Major lenders are providing these cards to their customers, ensuring security while using these cards. Before using these cards, you need to sign up on some website to register the card.
2. Prepaid Gift Card
Prepaid gift cards are anonymous and are available in the form of a physical gift card and digital gift card. Each gift card is loaded with multiple features and benefits for the users. Prepaid gift cards are available at the gas stations and retail stores. Prepaid gift cards may be used offline as well as online. Prepaid gift cards ensure instant and hassle-free payments for various services without revealing the identity. Such cards don’t store the user’s credentials. Concerned with losing cash? Then prepaid cards are a better option for such people. Prepaid cards are beneficial in monitoring the expenses made by the youngsters and provide restrictions in using at some outlets. It is noticed that some balance may be left in the card after making purchases, which the user often forgets. But, beware before purchasing these cards as they are not widely used as compared to other payment methods.
3. PayPal
A widely used, secure electronic payment system across merchants. You need to register an account on PayPal using bank account details or any payment card. Semi-anonymous ode of payment where recipients only get to know your name and email address, hiding personal identity. Retailers do not get access to your card details as payments are made with PayPal accounts due to multiple layers of security policies in payment. You can pay money for services and even receive money in your PayPal account. PayPal account also allows you to transfer your balance in PayPal account to your bank accounts. No transaction charge is levied when transferring to the closed ones until conversion to other currencies is required. PayPal ensures its users assured refunds if you do not receive ordered product or product doesn’t meet the description, especially on eBay where you do not get a guarantee for what you shop. PayPal is most popular among such online payment methods. It is used by more than 250 million active users and available at 200+ online marketplaces because it is considered the most secure payment mode. After all, a user does not share anything with merchants accept PayPal ID Email.
4. Payment Apps
Easy and portable mode of online payment methods. Payments are made to the merchants from mobile applications installed in smartphones. No need to carry cash or physical cards; payments can be made by just using your smartphone. In short, your smartphone is your wallet. Widely used across merchants, you just need to link your credit or debit card and pay at the stores easily. Payment apps are being widely used by approximately 60% of the adults in the United States and 80% by the Millennials. On the negative side of payment apps, hackers have their eyes on payment apps as they may collect a complete database of customers from a single platform.
5. Virtual Debit/Credit Cards
Also known as disposable credit cards or masked credit cards can be used only for online payments. The benefit of using such a card is that you can spend on your usual credit limits provided by the lender. Using virtual credit cards for online shopping hides your personal data as virtual credit card numbers are mostly temporary, which does not match your physical credit card numbers., allowing anonymous payment. Virtual credit allows you to set its expiry date even before the actual expiry date of your physical credit card. May be used at a single merchant. Users feel safe while using virtual credit cards. A major disadvantage is that it is not accepted by most of the vendors due to technology available to all merchants, and not every bank offers virtual credit cards to the customers. These cards are not suggested to make recurring payments as these cards may expire before the actual expiry date, and you may forget to update details, losing out payment due dates.
6. Paysafecard
These are a type of prepaid voucher which allows online payment. Again no need to share personal information with the merchants. These cards do not even require you to have a bank account. These cards are used for various services from buying books, games, travel, and VoIP services. Paysafecard is leading in the European market in the field of Prepaid payment methods. It requires online as well as offline interactions. So, you must ensure to have an internet connection. Check for any local retailers selling Paysafecard. Before buying, take note that these cards are not accepted in many parts of the world. So, you must be facing issues in using these cards in those countries.
7. Credit Cards
One of the most popular forms of electronic money and used globally on the net. Every banking company is offering Credit cards to their customers. Credit cards ensure a secure and most comfortable way to do the financial transaction. Much top e-commerce and mobile commerce sites store credit card information securely to make a payment each time.
8. Debit Cards
The second most popular payment medium is Debit cards and Net banking. After all, we know debit card users can make a purchase only if they have enough amount in their savings account. Today One Time Password (OTP) is making such transactions more secure.
9. Net Banking
It is very similar to the debit card, and the only difference is – a user must have a net banking account. It is also have protected by OTP.
10. Cash on Delivery
The only tested and original payment method that can be anonymous. Cash transactions ae preferred while paying small amounts. Security concerns follow you when carrying cards. Cash is accepted at every merchant range from small size to the major ones. But, it is not safe to carry large amounts of cash with a fear of theft. Once stolen, you may not get back your cash, which is not in the case of cards where you may get your card replaced once stolen, keeping your money safe.
11. Third-party Private Payment Service
With the growing usage of online payments, many third-party payment providers are making their place in the market. Using these services, beware of sharing your personal identity with these vendors. Understand proper regulations and prevent yourself from getting scammed by these third-party services.
12. Cryptocurrencies
Cryptocurrencies are a virtual currency used as a mode of exchange online. These are secured by cryptography. Cryptocurrency is considered great for private payment anonymously used. Crypto exchanges provide cryptocurrencies to the people. Some widely used cryptocurrencies are quite expensive, forcing users to shed more money. Bitcoin ranked the highest valued crypto over the last few years. Other cryptos often used are Litecoin and Etherium. Many more cryptocurrencies are rotating in the digital world. Most of the companies have started accepting payments in the form of cryptocurrency. These virtual currencies work upon blockchain technology and are usually decentralized. These are not under the control of the government and the central authorities. Portability and divisibility, the two main reasons for its successful operations. Cryptocurrencies have been opposed to its volatility in its inflation rates as not controlled by the government and often indulge in illegal activities.
Final Verdict
A secure electronic payment system and its alternatives are secure enough, but availability marketing and human mindset play vital roles here. Most people want to pay through payment gateways rather than alternatives. But where there is no alternative to other options like Themeforest.net [Another site if required mention here] people pay through PayPal or Skrill.
