The active development of online business has its logical explanation. Business owners understand that this line of business provides wide coverage of a target audience that can turn into potential buyers. Almost everyone has a home or, at least, mobile Internet, which makes it easier for online businesses to convey their offers to the audience, covering various segments of potential buyers. An equally important point is that e-commerce requires less investment in advertising and online promotion. And the ability to interact with banks online has made the payment procedure and document flow function easier.
Effective e-commerce requires banking institutions and payment systems to be able to process transactions smoothly in real-time. Equally important is the understanding of how eCommerce online payment processing takes place.
E-commerce and payment process
The payment environment is essential to the existence of e-commerce. In a networked economy, the competitiveness of its subjects is determined by the level of development and mutual integration of trade and payment instruments.
E-commerce is gradually turning into one of the important channels of goods distribution, a natural factor and “limitation” of which are online payments. The range of electronic payments is extremely wide.
Online shopping and e-commerce are inseparable from each other. If buyers like the product for its technical characteristics, cost, and appearance, they place an order, pay for it, and, after a while, the product is delivered to the specified address. The buyer can pay in several ways. For this, there are various payment systems and methods of accepting non-cash payments, allowing you to make payments and transfers instantly, regardless of the location of the sender and recipient.
Operating principles of payment system: Electronic payment methods
A payment system is a set of rules, procedures, and technical infrastructure that allow the transfer of funds for a product or service from a buyer to a seller. Payment systems in e-commerce are also electronic. The peculiarity of electronic payments is that the entire process, from start to finish, takes place in digital form. They provide the process of buying a product/service on the Internet and the possibility to pay for it using different payment methods:
- Bank cards:
- Credit. This is the most common payment instrument. In addition to your own funds, such cards provide access to an amount allocated by the bank in debt for a certain period. The buyer can use it to pay for any kind of purchase.
- Direct debit. This bank card acts as a personal account where the owner’s money is kept. The withdrawal amount is limited by the number of funds available on the account. Using it, the buyer can pay for purchases on the Internet and transfer funds to other banks.
- Alternative payment options. The emergence of electronic payment options, such as e-wallets as well as financial instruments operating on the “buy-now-pay-later” model, has opened up new e-commerce opportunities.
Choosing from the whole variety of payment systems, you need to select the one that will be the most optimal in use. Exactly® is a modern, business-oriented payment system for forward-thinking people who value their time and calculate their actions several steps ahead. It helps you with eCommerce payment processing solutions you can require when setting up your e-commerce business. This payment system has many advantages. Among them, you can find an individual approach to each client, reliable protection of confidential information, qualified support service, and quick connection procedure.
Basic aspects of processing eCommerce payment
Any online business implies accepting payments. If you want your business to go smoothly, you will not avoid such terms, like “payment gateway”, “merchant account”, and “payment processor”. To understand eCommerce payment processing, it’s better to learn what it is and what its peculiarities are. All three terms relate to securing payments. The difference is at which stage and what functions each tool performs:
- Merchant account
This is a special type of account used by all online sellers and e-commerce business owners. Clients’ funds are accumulated on this account before they go to the corporate bank account.
Only with the help of a merchant account, it is possible to receive payments from customers from their payment cards (Visa, MasterCard, and others) and other online methods (Internet banks, e-wallets — using payment gateways). Any e-commerce business owner must contact a merchant service provider to obtain a merchant account. A separate account is created for security. If the client requests a refund, the money will be returned from the amount on the merchant account.
- Payment gateway
It is an important link in payment processing. It is software that securely connects the merchant to the payment network. The gateway creates a form where the buyer enters the card data, collects payment data, and, in a secure form, transfers it to the bank or payment processor, after which, depending on the conditions, it informs whether the payment transaction can be carried out or not. The payment gateway does not transfer money. It just makes sure that this is possible and does so in a secure environment.
A payment gateway provides card service and other payment methods: online banking, e-wallets, and bank transfers. The owner of an e-commerce business must open a merchant account to connect it to a payment gateway. However, it is more convenient to use an all-in-one solution: payment connection, connection with payment networks and banks, statistics, recurring payments (subscriptions). After you integrate their payment gateway, it will release you from any compliance concerns.
- Payment processor
If you have an online store, or you are an owner of an eCommerce business, your main concern is the convenience of your customers. Payment for goods and services is one of the procedures that should be smooth. There are dozens of payment methods available, including credit cards, e-wallets, and internet banking. Not taking into account any of them means losing some customers.
A payment processor for an online store is a way to connect dozens of payment methods by concluding just one contract. After that, your customers will be able to pay for purchases and services as they like, and you will receive funds to your account without any problems or interruptions.
A payment processor is a system provided by a legal entity acting on behalf of a bank. It is involved in the transfer of non-cash funds and/or ensures the acceptance of non-cash funds from individuals in favor of legal entities and individual entrepreneurs.
Payment processors are used by people and services that accept payments via the Internet, who receive payments from employers, sell goods and services, or those who run an online business as their source of income:
- eCommerce stores
- companies and organizations that provide online services
- eCommerce businesses of various segments
Exactly® is a reliable partner for the successful organization of online payments and transfers when selling services and goods on the Internet. If you are taking your first steps in e-commerce or want to connect new online payment systems in addition to the existing ones, they will do it effectively. Their extensive network of acquiring banks helps eliminate any barriers along the buying journey.
Modern payment processors are a universal solution. They have agreements with card networks, alternative payment methods; they also offer a merchant account (accumulate your profits up to a certain period) and payment gateways for integration into your e-commerce site.
Importance of eCommerce solutions
E-commerce has long become commonplace for many Internet users. E-commerce opens up new opportunities for sellers and buyers, which are impossible without high-quality, reliable, and secure electronic payment methods and effective solutions.
Thanks to modern technology, businesses have almost no boundaries. Even a small business can grow and become global, but for that, at the very least, there must be a website with the ability to pay online. As for the site, e-commerce platforms will help here. They make it possible to launch an online store on your own, even if you are not an IT specialist. And payment service providers, who develop solutions for accepting and processing payments, will help with online payments on the site. By turning to these services, merchants and online business owners will benefit from the support of major world currencies and popular payment methods. Thanks to end-to-end protection, PCI compliance, and tokenization, you can grow your business as quickly and successfully as possible.
Payment processing is an integral part of online commerce. Accordingly, the choice of the payment provider that will process your payments determines the success of the business. By entrusting your e-commerce business to a reliable provider, you can connect different payment methods to your store and ensure uninterrupted acceptance of payments.
Whether you’re an owner of a small or large business, set up an efficient online payment processing solution and grow your business successfully. A minimum of documents, convenient personal account, installation on the site without problems, security, and favorable rates for businesses of any size all this is possible. You can customize the payment page for yourself: connect an individual design, auto-complete forms or implement additional functionality.