We’re now hearing a lot about how online payments are changing and the “Discussion About the Most Popular Online Payment Methods.” If you have a credit card, you’ll find that online purchases are the biggest driver of your spending and sometimes even your wallet. With today’s economy and such a high interest rate on our credit cards, we spend more and spend it foolishly.
When we pay for something online with a credit card, we automatically become a cardholder. Then the banks issue us a card or other payment method for use in our homes, at our office and when traveling. The technology and choices are almost endless! So, let’s look at the different types of these payment options.
The next phase of online payment will be electronic check, which is another online payment method that will probably be available to all of us sometime within the next five years. Electronic checks allow the issuing bank to know that you’ve paid by debit, credit, or both. These are fairly new and is growing in popularity, as the old-fashioned check is slowly fading away.
Some online merchants may also offer cards or other forms of payment, but the card does not necessarily represent the merchant. In order to purchase, the card is either swiped and read and then will be entered into the transaction process.
An old type of online payment, also known as credit card payments, can also be a form of online payment, but the difference is that the customer is charged for the item they order, or ordered from. The charge is deducted from the card before the item is shipped to the customer. When the buyer is satisfied, a bill is sent to the card issuer, who will then deposit the amount on the card directly into their account.
Sometimes online payment is done by cash. It is relatively safe, as the money never leaves the person’s bank account. There are different ways the money can be transferred from the person’s account to the merchant’s account.
One way for the payment to be processed, if the customer has an account at the same place where the credit card is issued, is the interchange program. This program allows the merchant to charge the customer through the issuing bank and pay the money to the processor instead of the customer. The interchange allows for more security than the credit-card system.
Another way is the Internet payment method that most online retailers and many merchants have chosen for their businesses. Instead of requiring a card or other payment method, they must pay each time the transaction is made. It does, however, provide the company with a very low overhead expense, making it more cost effective than any other payment option.
These two methods are the oldest, but there are still a few newer ways to pay for things online. There are mobile payment programs that can be used on an iPhone, Android, or other mobile device that allows the payment to be made via phone or a computer. The company is not held responsible for fraud committed through the network, so it is better to accept this payment method.
Some companies also offer a type of payment method called e-check. This method allows the company to process the customer through their business checking account, and then they are sent a check in the mail, through the United States Postal Service, to the customer’s address. While not the most secure way to complete an online payment, most large business uses this payment method, because of its convenience.
And finally, some businesses do not need a payment method, such as a credit card, but still need to use an electronic method to buy goods and services. The business does not store the customer’s personal information on their website, they use a third party provider that provides an online payment gateway for all of their customers.
Keep an eye out for the upcoming new wave of online payment methods. As I said, the sky is the limit, and only time will tell what will be available.