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Online Payments and How They Work

March 24, 2020

We live in the era of the internet. In addition to making the world a global village and connecting people across boundaries, its applications have revolutionized every sphere of human life. In business, the Advent of the internet was the precursor to the development of e-payment technology which is the reason for the global success of the e-commerce industry. During the initial years of its inception, e-commerce relied on ‘cash on delivery’ as a payment option. However, with the advancements in e-payment technology, payments can be made online not only for goods and services acquired online but also for payments in offline stores. With the help of payment solution providers, merchant’s can now ensure that users have a hassle free and secure payment experience.

The Benefits of Online Payments

Online payments have proven to be beneficial not just to customers but also to merchants. They do away with the need to carry cash around and one does not ever have to worry about running short of money. In addition to this, online payments can be made at one’s convenience, all that is required is a device connected to the internet. Furthermore, through e-commerce payment gateways money is wired directly from the customer’s bank accounts to the merchant’s. This money trail can be easily traced and statements of the same can be procured.

How does E-Payment Work?

Online payments have two key players working between the customers and the merchants – the payment gateways and the payment processors. Payment gateways handle the first step involved in an online payment transaction, which is card authorization. Here, the customers enter the details of their cards and authorize the payment. The second step is the transaction settlement and payment processors take over. The information entered by the customers is communicated to the banks who in turn contact the card companies with the data. Upon confirmation from the card companies, the authorized amount is credited to the merchant’s bank account and the online payment is complete.

Who are E-Commerce Solution Providers?

E-commerce solution providers, as the name suggests, offer solutions to any glitches or issues that merchants face with regard to payment options. They offer multiple methods of payment on a single platform and help expand the customer base. Some of the options offered include payment by credit and debit cards, e-wallets like Alipay, PayPal, etc. and payment by China Union Pay.

What Makes a Good Payment Solution?

A good payment solution must seamlessly integrate the various payment options made available to the customers and ensure that the payment gateways are secure. Customers must be able to follow the directions to make payment easily. For instance, one of the most popular and efficient means of payment requires customers to simply scan a QR code to make the payment. With the advancements in online payment technology, various payment options have flooded the market and payment solution providers will help merchants figure out which payment option works best for them.