Online payments have become an integral part of every e-commerce website or online store. However, offering these online payment methods is made even before the website or online store launches. Therefore, choosing the correct payment methods for an e-commerce website is crucial to ensure that the business runs smoothly.
There are many types of electronic payment systems in e-commerce. However, choosing the right one entirely depends on the kind of e-commerce website one is opting for. An e-commerce business owner must understand that the more appealing the payment methods are, the better are the chances of successful payments.
Another reason for offering electronic payment methods rather than old-school cash payment is the advancement in technology. On offer are various online payment methods like UPI, mobile wallets, etc. - one can see a paradigm shift, thanks mainly to the pandemic. People are trying all possible ways to avoid physical contact. Therefore, e-payment systems are a veritable option in the current scenario.
So, here is a list of e-commerce payment methods that can be offered for various online stores and e-commerce platforms.
Types of Electronic Payment System in E-commerce
1. Credit Cards and Debit Cards
Using credit cards and debit cards is the most widely used e-commerce payment method across the world. Being a globally accepted payment method, credit card and debit card payment can be offered by e-commerce business owners to spread the reach of their businesses internationally.
Credit card payments are practical and safe. While making a payment with a credit card, all a customer needs to enter are the card number, expiry date, and CVV.
Debit cards are usually preferred by those who shop within a budget. The only difference between a credit and debit card is that money gets transferred to the merchant first, and the payment is made to the bank later in the former option. Still, in the case of a debit card, payment is made from the already present money in the bank account.
In both cases, CVV is a must as it helps detect fraud by comparing the details of the customer and the CVV number.
2. Prepaid Card Payment
A prepaid card can be used to pay for things. These cards are usually bought with money readily stored in them. Prepaid cards can be purchased from many stores and e-commerce sites. A prepaid card is more convenient than a debit card or a credit card, as you don't need a bank account to use it. Also, prepaid cards don't require a good credit history for any transactions. Therefore, prepaid card payment options can be considered helpful for e-commerce platforms.
E-wallet or electronic wallet is the latest payment option being used extensively. These digital wallets allow a party to transact with the other party by bartering digital currency for goods and services. In addition, E-wallets can store rewards, loyalty cards, gift cards, and so on. Therefore, e-wallets can be used to make online payments on e-commerce platforms.
E-wallets need a sign-up form for both the merchant and the customer. After an e-wallet account is created and linked to the bank account, a customer can deposit and withdraw money from the e-wallet.
E-wallet is considered an instant online payment method, and it can be merged with mobile wallets using NFC. Prepaid e-wallet also store the multiple bank account details of a single customer. It needs a one-time registration, and hence, a customer doesn't have to enter their information every time they make a transaction. Therefore, e-wallets are one of the best payment methods for e-commerce platforms.
4. Mobile Payments
Mobile payment is the payment made with the help of a portable electronic device; it can either be a cell phone or a tablet. Mobile payment can be made by downloading a mobile app and linking it to the bank account so that while making a payment, the funds are directly transferred from the bank account to the merchant.
A mobile payment app like Google Pay is an example of a mobile payment app that links the bank account to the app. Here, the customer makes a payment, and the funds are deducted straight from the bank account instead of any secondary e-wallet. It is a straightforward and hassle-free option and hence, a must-have option for every e-commerce website.
5. Bank Transfer
Although this payment option has taken a back seat nowadays, it is considered a required payment method for e-commerce. Customers who are enrolled in internet banking can do a bank transfer for their online purchases.
Even though bank transfer is the least sought-after payment method, it is the most secure as the transactions need to be approved and authenticated by customers.
Every payment method is good enough, but if we talk about India, cash is the most preferred mode of payment for any transactions - physical or electronic. For e-commerce platforms, this method translates into the cash-on-delivery payment option.
Although this mode of payment carries enormous risks of theft of money, it cannot be ignored. However, the risk of theft has also been reduced drastically nowadays as customers choose to pay with cards or mobile payment methods instead of cash to eliminate physical contact.
This payment method may look absurd, but it is gaining popularity, and it can be a favourable payment method for the next generation.
These were some of the best e-commerce payment methods that every online business owner must check out.
Need For Multiple Payment Methods
People these days are using more than one payment method. The only reason for this is convenience.
The availability of multiple payment options on e-commerce stores ensures that a customer makes the payment without hesitation, and the chances of cart abandonment are lower. In addition, business owners can check out OKCredit, a digital ledge app to make informed choices regarding payment methods.
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Q. What is an e-payment system?
Ans. An e-payment system is a way of conducting transactions through any electronic medium. Therefore, it is also known as an online payment system.
Q. Is a payment gateway an essential tool for all e-commerce websites?
Ans. Yes, a payment gateway is an indispensable tool for every e-commerce website. Furthermore, a payment gateway is essential to enable secure payment authorisation for every e-commerce website.
Q. What is a payment gateway?
Ans. A payment gateway is a service that processes a customer's payment details and generates a link to complete the purchase. After a business owner integrates a payment gateway, they will get the payment in their merchant accounts.
Q. Which are the best payment gateways in India?
Ans. Some of India's best payment gateways for e-commerce websites include Citrus payment gateway, CCavenue payment gateway, PayUBiz India payment gateway, Direcpay Payment Gateway, etc.
Q. What must be kept in mind before choosing a payment method for your e-commerce platform?
Ans. Before choosing any e-commerce payment method for your online business, define your target audience. The local, geographical, or cultural habits of shopping may vary. Therefore, providing those payment methods that the customers don't trust or are not interested in may lead to losses. Hence, before adopting any payment method, keep customers and their shopping habits in mind.