An electronic payment system provides buyers and sellers with a way to exchange funds electronically, without physical cash or paper-based methods. Such systems facilitate credit card payments as well as mobile phone payment options – giving businesses greater reach into wider markets for increased sales opportunities.
Internet has revolutionized how we shop and pay for goods and services, yet small business owners may find it challenging to reach customers through eCommerce. They must set up merchant accounts with banks – a time consuming and costly process – in order to process credit card transactions online, noting that banks may impose high transaction fees when processing such transactions.
Virtual internet payment systems help small businesses overcome these hurdles by enabling them to accept credit cards online through their websites. A key component of such a system is an encrypted server which stores transaction details in an easily searchable format; these servers may be hosted by either large payment processors or hosting services who specialize in credit card processing for small businesses; in either case, data protection against hackers and unauthorized parties remains assured.
An internet payment system includes two components. One is a web application that enables customers to enter their credit card information on a secure page from either a laptop or desktop computer, making purchases quicker. Some such applications also support recurring billing – handy for gym membership services or similar subscription-based businesses.
One key advantage of an Internet payment system is its flexibility – any computer with access to the web and browser can use it; making it an excellent solution for businesses who wish to take their products and services on the road, such as selling at trade shows or off-site events. In addition, these applications can even be accessed using mobile browsers on smartphones or tablets for maximum flexibility.
Internet payment systems offer businesses another cost-cutting benefit by eliminating upfront hardware expenses. While quality POS terminals can cost as much as $1,000 each, virtual payment systems only need access to the Internet and a browser; some even come equipped with built-in swipers for fast and accurate credit card entry.
Technology, digitalisation and mobile penetration has led to an explosive increase in the use of e-payment systems. Anjali Singh can make digital payments using her debit card at a point-of-sale machine or UPI payments for any app (QR code) within her shop. Other examples of digital payments include peer-to-peer transfers, mobile, DTH and WiFi recharges as well as loans EMIs, utility bills, insurance premiums SIPs or any financial transactions that occur online.