Digital payment methods make use of the Internet to facilitate payments through one’s own personal account or by making use of a trusted vendor. Some examples of digital payment methods include credit cards, PayPal, online banking, wireless devices and other forms of digital payment.
Online payment processing is essential for businesses that are technologically inclined. Without online payment processing, merchants and consumers would have to wait for days or weeks to transfer money between each other. To simplify the process, online payment processors such as PayPal have made it possible for anyone to accept payments through their site.
Here are some of the key benefits of modern digital payment methods: a web browser is required for each customer, unlike the traditional method of sending checks; online payments are very convenient, which is especially true for online stores that sell items online; credit card information is not stored in the merchant’s database, making transactions safer; customers can make their purchases from any location through a trusted vendor on the Internet; transactions can be conducted securely, using encryption methods such as SSL, which is used by sites that sell electronic goods. Payment processors also offer payment protection for merchants, with guaranteed transaction protection against fraud and charge-backs; online payment processing is relatively risk-free, as there is no need to wait for merchant accounts to clear or open.
Online Retail Stores: Some brick and mortar retail stores have recently started accepting payments via a combination of plastic and online methods. This trend has grown out of the convenience offered by online retail stores. It is now possible for consumers to make purchases online at times when it would have been impossible to do so before.
Small Online Merchants: Since so many online and offline businesses are making use of online payment processing, many small online merchants are turning to it to help make their business more convenient. Most online payments, however, are still processed through a variety of payment processing companies such as PayPal. Consumers, too, are increasingly choosing to use these options to make their online purchases.
Mobile Phone Payment Processing: In this age of mobile phone usage, more consumers are turning to these methods to make payments on their mobile phones. The trend seems to have caught on with new businesses and mobile phone providers alike. Merchants who provide mobile phone payment services can be a useful source of recurring revenue for owners of small businesses.
Out of the Box Payment Processing: This type of service is sometimes referred to as a payment gateway, or even a gateway. This type of solution includes functionality for managing payments between merchant and consumer, between retailers and processors, and between clients. Some of the solutions include integration with other applications, such as accounting software, and with e-commerce platforms, such as e-bay.
Hard Money Payment Processing: Like the name implies, hard money is money that is directly transferred from consumers to a merchant. This process can be done directly between the consumer and the merchant, though there are some instances when the money needs to go from the consumer to a trusted third party. In either case, the company that processes the transaction is responsible for the safe handling of the money, and that company will be the third party that receives the funds.
Electronic Payments: Electronic payment systems that are integrated with e-commerce and websites can be used by consumers to make purchases online. Merchants are not required to support the electronic payment options, though they often do so in order to increase their revenue. Most e-commerce sites require users to complete their transactions online, but some merchants are beginning to make use of electronic payment options in order to save money.
Second Level Payment Processing: Online payment processing companies that offer other services, such as cross-currency conversion, may also provide online payment processing services. These types of services are often found on merchant accounts. In this way, the online payment processing company offers a way for the merchant to increase his or her revenue.
Online Payment Systems: When the online payment processing company takes its payment from the merchant, it divides that amount between the merchant and the company that provides the payment system. It then determines how the payment is sent.
In some cases, the merchant will pay a percentage of the revenue received to the online processing company and, while in others, the payment may be fixed. determined by the agreement.