Types of Payment Methods
Online payments are becoming popular and given current ‘COVID’ circumstances the need for accepting online payments will continue to grow even further.
As a merchant, you have to consider what your customers need. Along with providing quality service and goods, it is extremely necessary to implement payment methods that are convenient for customers.
India is a cash lite economy but as India is on its way to becoming digital, the payment scenario is also changing and moving towards digital space.
As customers started embracing digital payments many software developing companies, as well as many big players in the payment industry, started developing online payment acceptance applications.
As of today, there are n number of applications to choose from. A merchant that accepts online payments must know about different online payment options available and popular amongst customers.
Because if the customer is not comfortable enough to pay online with the online methods a merchant provides, it can lead to cart abandonment or at worst losing the customer.
So, before getting started on the topic of online payment systems, here are some terms you need to know.
- Merchant Account – Merchant account allows the merchant to accept online payments.
- Acquiring bank – An acquiring bank is a financial institution that processes card transactions.
- Issuing Bank – Bank of the cardholder or customer
- Payment Gateway – A platform or a service that helps authenticate cardholder’s details for offline and online businesses.
Here are some Payment Processing Terms every Merchant should Know.
Things to Consider While Shortlisting Payment Methods
As a merchant, you know that having multiple payment methods for accepting online payments is a good thing for any business. But including payment methods can be somewhat tricky.
Where fewer payment methods may increase bounce rate adding more than enough payment options for customers may result in the same.
So, every merchant should analyze the business as well as customers’ requirements and find the just-right number of payment options/ methods to integrate.
Payment methods that compliment your company’s location and your customer’s preferences (a survey is a good idea) in case you accept international payments online. Your company’s business model is one of the most important aspects to choose correct payment options.
Benefits of Online Payment Options
- Whether at day or night, from home or office customers can simply pay for goods or services they want comfortably.
- Online payments add an extra layer of security and eliminate the need for customers to visit the shop personally.
- Online payments with any of the payment methods chosen can be done right through a mobile device which allows flexibility in payments.
- Customers as well as merchants can track the payments.
Now, let’s start with the different types of online payment methods you can integrate to accept online payments.
Types of Payment Methods
1) Card payments
Offering online payment acceptance via cards, be it any type of card, credit card, debit card, prepaid card, or gift card, will indeed allow you to reach more customers.
Card payment is one of the most popular payment methods among customers. Card payments are secure and customers can make local as well as international payments with them.
Understanding what type of card payments are popular among customers and implementing them as an online payment acceptance method will be beneficial for business and it can increase revenue.
2) Mobile payments
Accepting mobile payments is becoming a recent trend. Mobile payments are fast, easy, and convenient. Merchants can access cash flow, analyze customer behavior, and reduce the overhead investing cost by accepting payments via a mobile device.
There are different types of mobile payments based on the modes used and techniques used. QR code payments and link-based payments are more popular among them.
3) Bank transfer
When all else fails customers will still try to go with one of the basic and first introduced online payment methods i.e. bank transfers. Though not so popular this method is used by a lot of customers as a safety method.
Everyone uses online banking nowadays and considers bank transfer as one of the most secure online payment methods.
4) Mobile wallets
Using prepaid mobile wallets is becoming a trend. Customers are replacing physical wallets with their virtual wallets and are happy with it. The mobile wallets store customer information and multiple cards and bank accounts.
There is no need to re-enter all the information every time the customer makes a purchase making mobile wallets simple and easy to operate. This instant online payment method is here to stay and extremely important to implement.
5) Online payment gateway
With an online payment gateway, customers can directly pay on the store or merchant website. There are many third-party companies that provide payment gateways to accept online payments.
In conclusion, These payment gateway pages can be customized according to the business and customers’ needs. It offers customers and returning customers an easy to pay online method and pay by cards or checks.
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