Everything about Electronic Payment Systems that You Always Wanted to Know

by Akriti Yadav Business Head Having constantly been hearing about electronic payment systems and how many advantages they offered online merchants, I actually felt ashamed not really knowing what the whole process was. So I decided to look up information online, and today I am posting all of that information here for other similarly technologically challenged people to understand and realize how these payment systems have changed the way people transact, and they have changed it for the better. Let us start with what these payment systems actually are.

An electronic payment system can be defined as a module that facilitates acceptance of electronic money, not just for online transactions but also at brick and mortar stores. The widespread usage of the Internet and its easy accessibility is what has made these payment procedures extremely popular. Over the past couple of decades, usage of credit cards has reached tremendous heights. Apart from credit cards, other accepted modes of payment include debit cards, IMPS, NetBanking, E-Wallets and cash cards among a few not so popular others. Electronic payment systems involve a payer, the person buying a product or service and making payment for it, and a payee, the person who is selling a product or service and receiving payment. The sole purpose of an electronic payment system is to transfer monetary amount from the payer’s bank account to the payee’s bank account. The banks play two different roles in a transaction, namely that of the issuer and of the acquirer. The issuer interacts with the payer, and validates the payer and his worth during account registrations. The issuer bank also holds the payer’s assets and account. On the other hand, the acquirer bank interacts with the payee and is responsible for his assets and account. Further, subsequent to selecting a product and deciding to purchase it, the payee deposits the required payment with the acquirer. The acquirer bank and the issuer bank then perform an inter-banking transaction for ensuring that the payee’s account holds sufficient funds for clearing the transaction. In case you were wondering, I also found out that it is indeed possible for the acquirer and the issuer to be from the same financial institution.

If you are not just reading this article for knowledge’s sake, and actually want to implement an effective electronic payment system in your business then make sure that you keep a few things in mind. Choose a service provider that offers highly secure system, with multiple levels of encryption. This ensures that the sensitive financial information of your transacting customers is safe from prying eyes. Hope this article helped you gain a little more knowledge about electronic payment systems.

The author has extensively written about the evolving e-commerce trends in India. She has valuable insights about Online Payment Gateways in India and Electronic Payment System .Her articles and Blog features are a source of information for budding entrepreneurs and businesses that depend on online channels for revenue around the world.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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