Today, purchasing products and services online is an accepted part of lifestyle. You can access almost anything and everything on the internet, be it an educational course, gadget, food, clothes, etc. While making a online purchase, you may come across different types of payment modes. Are you aware of the most common payment methods online? We have listed below 6 online modes of payments, which you need to acquaint yourself with.
- Credit Cards and Debit Cards
Credit cards and debit cards the most widely used online payment methods. A credit card allows you to purchase an item/service, even if you lack funds. A small percentage will be charged on the principal amount, which you have to repay by end of the month. Debit cards on the other hand, come with a fixed balance that is there already in your bank account.
Transactions from these cards are secured, where the online payment processor securely transmits card information through the web to the retailer. The processing firm completes the transaction. Thereby the amount gets debited from the buyer’s account, and credited to the retailer.
- Bank Transfers
You can transfer funds from a bank account to another with help of net banking or online bank transfer service. To avail online banking services, you have request for the same to the bank. You will then receive your net banking login ID and password. You may not require a debit card to complete such transactions, until prompted. Some of the examples of bank transfers are IMPS, NEFT, Quick Transfer, etc. Here, you have to add the beneficiary account prior to making transactions.
For instance, you wish to transfer Rs. 5,000 to someone who has his account in Bank of Baroda. To register him as a beneficiary, you will need to enter beneficiary’s account name, account number, Bank of Baroda IFSC code, and high security password as received on your registered mobile number. The payee will be added as soon as the bank verifies the beneficiary details, then you can transfer money online through any type of bank transfer.
- Mobile Payments
Using a mobile payment application, you can pay for a variety of services and goods. Almost all such payment apps charge no fees. But, some may ask for a small convenience fee for the service. This online payment method wins over checks, net banking, and other pay methods in terms of ease of access, time taken to process the payment, and one-destination for all payments such as utility bills, DTH recharge, booking cab, buying movie tickets and coupons, etc.
- Electronic Checks
There are some payment processors that allow you to accept e-checks or electronic checks from customers. Unlike credit cards, e-checks do not get processed instantly. This is visibly seen when a person writes a bad e-check for a business. Here the transactions follow a particular process, where you as a purchaser enter the checking amount and bank routing number in the online order form. Then these details are forwarded to the processer, which completes the transaction. Now, the net fund is sent to the retailer’s business account.
- Gift Cards
Gift cards are issued by both retail outlets/stores and credit card companies. If a website has a service to process credit cards from gift card issuers like Mastercard and Visa, then they can accept this kind of gift card. Or else, you can only utilize the gift cards, which the particular business has issued.
PayPal allows you to collect payments from customers or clients. Transfer of money here happens between the sender and the receiver’s PayPal account. When you create a PayPal account for business, there are two options to select, A) Accept money from a person’s PayPal account B) Use Paypal as a processing service to accept electronic checks and credit cards.
The above-mentioned are some of the popular online payment methods, which you must know. Go through their details to understand each of the payment modes and their functions.