An E-payment system is usually a method of securing a transaction, that is, to accept a payment or pay for a product or a commodity by using an electronic medium, without the use of physical ways like cheques or cash. It is also sometimes referred to as an electronic payment system or an online payment system.
The popularity of electronic payment systems has grown exponentially over the last decade due to the money crisis faced by most countries and the general hassle that it is to withdraw currency from a bank. The widespread trends of using technology for most purposes has also helped grow the notion of electronic payment systems. Nowadays, one can see electronic payment system and payment processing devices of the same purpose present in most shops and is one of the only ways to make a purchase through a market that is increasingly becoming an online one.
Methods of Electronic Payment Systems
One of the most popular forms of online payment is done through the use of credit and debit cards. Debit cards are small rectangular cards of plastic that can be used to store a theoretically uncountable amount of money, while credit cards are used for the same purpose, but the money is loaned to the person by the bank.
Besides these, there are the methods which do not require the transactor to carry any physical items whatsoever, like bank transfers, bitcoin wallets (one of the most popular types of online currency, transactions made using these are always encrypted for safety). Bank transfers and net banking require the transactor to memorize his bank account number and his pin, along with the expiry date of the card.
Some of the most popular methods of Electronic Payment are:
Credit Card –
Source : gcoen.ac.in
Credit Cards are very popular in first world countries like the US, UK and is only given to businessmen in other countries. The transactor can use an unlimited amount of money, which is loaned to him by the bank, to be repaid, with a subscription fee, at the end of the month.
Debit Card –
Source : barclays.co.uk
Similar to the credit card, in this, you get a rectangular plastic card. The transactor has to deposit money in the bank account to use it, and a minimum amount must be kept to keep the account open.
Source : fintechnews.sg
This is a popular form of prepaid account where money has to be deposited from a bank account. This is meant to hugely simplify the transaction process for anyone who carries a smartphone.
Source : muirassoc.com
This is a digital version of an old, physical, cheque from a cheque book. It electronically transfers money from a bank account without having to carry a cheque book.
The utility of electronic transactions
Source : tech.firstpost.com
- The business in question can reach more clients from across the world.
- The transactions are more efficient since they occur instantaneously.
- Nowadays, using online payment systems which have highly advanced firewalls are probably more secure than using most physical methods or carrying cash (due to the high risk of fraud and a high chance of being mugged)