The need for electronic payment systems has grown dramatically after the inception of online shopping and eCommerce websites. The E-payment system made it convenient for the customer to pay for anything at any time.
This convenience has created emerging opportunities for businesses to extend their operations in remote areas without any geographical limitations.
The COVID-19 pandemic has increased the need for electronic payment systems as it has forced people to stay at home. People are unable to go out of their homes because of lockdowns and strict social distancing norms. So they have started using online shopping platforms for ordering daily necessities.
Many businesses have started offering products and services via eCommerce platforms. Online business is the safest way for the owners to continue their operations even in the pandemic. However, businesses need to work on their electronic payment systems if they want to provide better service.
What is an electronic payment solution?
Electronic payment is the process where customers make payments by using electronic methods. Whether you want to pay for your favourite food or you want to pay your nearby retailer, you can do it easily via electronic payment solutions.
If you are looking to set up an online business, then you need an electronic payment software for accepting payments. You can hire software development team or you can assign your payment app development task to remote developers. But before you start developing an e-payment system for your business, you first need to know how it works.
How does an electronic payment system work?
If you want to implement electronic payments in your business successfully, you first need to acquire information about its process and the participants. The participants include the cardholder, the merchant, the processing bank, issuer, acquirer and the payment gateway. The involvement of all the above factors is necessary for the success of electronic payments.
Electronic payments are divided into two categories: recurring customer-vendor payments and single time vendor payments.
In single time vendor payments, the cardholder enters card information at the time of checkout to authorize the payment to the merchant’s account. Recurring payments are offered to those customers who make regular payments. However, one has to specify that the payment occurs for a specific period.
Use cases of electronic payment systems
The world of payments is evolving daily. Electronic payment systems are going to be the future of digital payments. Thus, you need to have proper information about current payment trends to stay ahead of your competitors. Here are the eight latest digital payment trends that you need to know:
Mobile wallet is a virtual wallet that stores the card information on a smartphone. Rather than using physical payment methods, one can easily pay for anything by using mobile wallets. Mobile wallets have decreased the dependence over cash for making payments.
Due to this, many FinTech companies have started focusing on making user-friendly e-wallet payment solutions for providing a seamless payment experience to their customers. Mobile wallets possess high-security measures that stop that can help you to decrease fraudulent activities.
International remittance means the transfer of money by a foreign worker to its family in its home country. In many countries, international remittance possesses a large amount of GDP.
Nowadays, mobile wallets have made money transfers easy with international remittance. It offers multiple features to make the transfers easy, speedy and secure. By using mobile wallets, you can set fixed exchange rates for transferring money. You can also let your customers determine their exchange rates beforehand.
Peer to peer payment
Peer to peer payments allows the transfer between two parties by using credit cards or debit cards through a payment e-wallet app. To set up a P2P payment, you need to sign up with your bank account linked with a credit card or debit card.
After setting up your account, you can start transferring money to your friends and family. The time for money transfer in the peer to peer transfer differs from one service provider to another.
Wearable devices are becoming immensely popular for payments. Wearables are those devices that are attached to some body part and are to make payments. Smartwatches and activity trackers are some examples of wearables.
Biometric payments are the way of making payments by using various parts of the body. Eye tracking, fingerprint scanning, facial recognition, etc. are some widely used biometric payment methods.
The main advantage of using biometrics for payments is that instead of entering the same PIN, again and again, you just need to touch the fingerprint scanner to make payments. After the entered fingerprint gets matched with the stored fingerprint the payment will be approved. If there is any mismatch with the fingerprint, the payment will not get processed.
QR stands for Quick Response. For making payment, you just need to scan the QR code with your wallet app. It will fetch the payment details and send that to the user. This is the method of transferring funds at the point of sale via an online payment terminal.
Contactless payment is the way of making payment by using RFID and NFC technology. In this method, one needs to tap the payment device or card near the POS terminal. Contactless payments are also known as tap and go payments.
There will be no need for swapping cards or entering any kind of PIN while using contactless electronic payment devices. When the merchant’s system prompts, the customer needs to bring his device or card closer to make payments. Then the information gets transmitted from the magnetic chip to the bank.
Payments using AI
The spread of AI-based payment technology such as chatbots, speakers, deep learning softwares, and machine learning tools has created a revolution in the electronic payment segment.
With the help of chatbots consumers can easily get the solution of their queries. Also, they can use chatbots for placing orders.
Speakers can also be a good source of accepting payments. Users just need to use the mic icon to initiate. The in-built system of the speakers will fetch the details and process the payment immediately.
Usage of AI into electronic payments have made it easier for businesses to maintain transparency.
Benefits of electronic payments
With the rapid advancements in the payment technology, electronic payment systems are becoming the substitute for the traditional payment methods. An e-payment solution supports online transactions that use e-tokens, checks, and digital cash. Electronic payment systems offer multiple benefits to the businesses and customers :
Extend your reach
Electronic payment platforms allow you to explore the markets. More and more people have started online shopping due to the inception of e-commerce websites. As per statista, the number of online shoppers is estimated to reach 230.5 million (approx.) in 2021. You just have to install an e-payment system into your business to grab this opportunity.
Now the customers do not have to wait in long lines for purchasing products or services. This convenience of purchasing can encourage your customers to buy more from you. This repeated purchase would result in the growing profits for your business.
It becomes easy for the merchant to reach more customers across the globe. The increased traffic of online shoppers brings higher sales. This increased sales will result in business growth.
The transfer to the electronic payment system has increased the number of financial frauds. But many e-wallet payment solutions use enhanced security measures to prevent data breach and frauds.
Now you can offer discounts, cashback, promo codes to your customers with an e-payment system. Also, you can change your prices quickly according to the latest marketing insights. By doing this, you can easily increase your current sales.
How to make your electronic payment system secure?
Security of payments is the top-notch priority for every business. But payment security becomes more important when you are using an electronic payment processing system into your business. There are many security measures and protocols for securing your payment systems. Here are the ways for securing your electronic payment system:
Get informed of Secure Electronic Transaction system
Firstly, you need to get in-depth information about the Secure Electronic Transaction (SET) System. It is a collection of security protocols that are used to facilitate electronic payments. With SET, digital wallets, merchant payment solutions and electronic payment processing software can be integrated to authenticate and ensure the secrecy of your payments.
Ensure your system is PCI compliant
When you choose an electronic payment system for your business, then you have to ensure that it is PCI compliant. The Payment Card Industry Data Security Standard is a list of payment system requirements for securely accepting, storing and processing the payments.
Set up digital signatures
The digital signatures connect a cardholder with the online payment. These signatures are the public key for ensuring the transaction. That is why you need to set up digital signatures for strengthening the security of your payment system.
Use SSL encryption
Secure Socket Layer is a security protocol that meets multiple security protocols such as authentication, end to end encryption, and integrity. SSL encryption ensures that the transactions made on your website are safe and secure.
Cost to make a successful electronic payment system
There are multiple payment solutions available in the market. But if you are having a large number of transactions every year then making an electronic payment system can be the best decision for you.
By integrating digital electronic payment solutions into your business, you can save your fees and sign up costs. You can have full flexibility to customize the solution as per your business needs. Also, you can offer a custom payment gateway to your customer as a separate product.
If we talk about the cost of developing an e-payment system, then many factors can affect it. The platform, app type, UI/UX integration, software company portfolio, location, etc. are the factors affecting the development of the electronic payment system. The development of an electronic system can cost you up to $8,05,000 (approx.).
If you want to develop a feature-rich electronic payment solution for your business, then you must think of getting a software development team on board. You can also consider outsourcing your app development to remote developers.
If you have decided to take your business online and your goal is to build a better brand image then you should pay attention to improving your electronic payment systems. For that, you need the services of a payment service provider. A payment service provider can make the solution as per your requirements that can help you to continue your business even in the crucial times.
With constant research and development in payment technology, we are soon going to witness the rise of robust electronic payment systems in the future. Also, such systems will create numerous opportunities for businesses to explore untouched locations and expand their services.
I hope we have provided you with all the necessary information. Feel free to contact us if you still have any questions in regards to the electronic payment system.