There is massive opportunity and potential in starting an online business. Whether your whole business is just starting up or you already run a brick-and-mortar business and you want to make the shift to digital, it’s important to invest in the right electronic payment system. An electronic payment system will allow you to accept credit card payments online.
In order to choose the right electronic payment system for your needs, it is important to know more about them.
What is an electronic payment system?
An electronic payment system facilitates online transactions for goods and services. There are many moving parts that allow this to occur. Electronic payments are divided into two types: one-time and recurring payments. One-time payments usually occur using e-commerce sites when a cardholder makes a once-off purchase. Recurring customer vendor payments are used for regular payments for a transaction, for example for phone bills or subscriptions. The cardholder enters their payment information once but opts for a recurring billing option, usually at regular intervals.
How do electronic payment systems work?
A cardholder (your customer) wishing to purchase a product or service offered by you, the merchant, will “virtually” place an item in their online shopping cart and click a button to checkout. The payment process is started when the customer enters their card or banking information on your checkout page. Your site then sends a transaction request through a payment gateway provided by your your merchant account provider to a payment processor. The payment processor will contact the cardholder’s bank and process the transaction and allow the funds to be debited from the cardholder’s bank and deposited into your merchant account. The funds can then be transferred into your regular business bank account.
There are two ways in which customers can make an electronic payment. They may use a debit or credit card by entering their card information at checkout, or they may use an eCheck (electronic check). For eCheck payments, instead of entering their card information the customer enters the checking account and routing numbers at checkout.
Are electronic payments secure?
Since customers are entering their sensitive banking details online, these kinds of payments come with a large number of risks. Your payment gateway and other payment software will have security protocols to protect both the merchant and the customer from the risks of online payments. Safety measures include Secure Electronic Transaction systems (SET), SSL encryption, digital signatures, and compliance with all industry security standards like the Payment Card Industry Data Security Standard (PCI DSS).
How will electronic payment systems benefit my business?
Accepting online payments opens up your potential market considerably, as more people can access and purchase your products or services through the web. Payments are more secure with the aid of technology and the process is more streamlined and convenient for both your business and your customers. In order to accept electronic payments online, you need to find a merchant account provider that suits your needs to set it up.
For more information about electronic payment systems or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.