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Online payments or an E-commerce payment system is the way of transferring funds for the purchased goods and services through the internet or electronic media. Today every 7 out of 10 people have the access to internet technology. Business transactions that are made online permit online payments.
Debit and credit cards are the most popular types of online payments widely used in today’s world of technology. When you purchase online, credit cards effectively are the secure and safest payment system. At present times, many businesses are adopting online payment methods for transactions.
There are different types of online payment or E-payment systems:
- Debit/Credit Card
- Smart Card
- Payment Apps
Statistics show that about 85 percent of the respondents in the Philippines made transactions through an online payment method in February 2020 and only 2 percent had not heard about any online payment method.
The huge utilization of online payment depends on the underlying advantages that it has for a business. Let's have a look at a few of the benefits of online payment for businesses.
Convenient & Cost-effective
Paying for business transactions has never been easier than using an online payment system. E-payments are far more convenient than cash in the present world. Instead of carrying cash one can easily make payments by using a mobile phone. It is also beneficial for the customers as merchants offer their customers the facility to shop on credit and pay later because the online system can automatically collect payment after a fixed period.
Offering online payments can help a business improve its client retention. Paper cheques are the most expensive payments methods for businesses. Online payment reduces the cost of printing, mailing, and distributing paper cheques. A business has to hire someone to collect, count, and maintain the cash flow for the daily transactions thus an automated system is more cost-effective for a business.
Instantaneous Payment Method
By offering an online payment system a business makes it easier for its customer to pay instantly and quickly through a cell phone. People do not have to go to the banks and wait in a long line to pay. It saves time and a customer can pay instantly from anywhere across the world. It becomes easy for the merchants to collect money easily in minutes against his sales and services.
You can make free accounts on many payments apps to collect and send money through the internet. Payer and receiver both prompt confirmation within 10 seconds of their transaction. Online payments can be made at any time of the day. It enables you to make payments on Sundays and public holidays using online banking and payment apps.
Reaching Customers Worldwide
To make your business successful a businessman needs to have the access to the maximum number of customers globally. When a merchant sells his goods or provides his services to the entire world, he has to think about the quickest payment method.
Online payment method enables international customers to make transactions across the border. You can make a purchase and pay online without having to move from your home to the shop. Hence, you can target the right audience from the different countries in the world. An online payment method increases the customer flow and your business can grow easily.
Secure Payment Method
Online payment is the most secure payment method. While purchasing from shops one has to carry cash which involves the risk of stealing and losing the cash. Online payment method makes it easy for the merchants and the customers to pay and collect the money without having to worry. It eliminates the risk of theft completely as no paper money is to be paid. It also eliminates the risk of bouncing cheques and saves the amount of penalty that is paid for the bounced cheques.
Increased Sales Velocity
The online payment method has got noticeable popularity among people as people like to shop online. Most people prefer online payment systems in today's world. They do not like to carry cash and cheques and avoid rushing to shops.
They prefer sitting at home and access the market that is just a click away from them. A merchant provides the facility of online payment to the customers who like to shop online and that facility gives a boost to the selling ratio of the business. In the present world if a businessman struggles to make his business grow faster it is significant for him to allow people to pay online.
More Attractive for Customers
An online payment method provides so many discounts and offers to their customers and who doesn’t like it? Discounts and offers make it attractive and appealing for customers to pay online. By paying online through credit cards people get discounts at many restaurants and shops. They also get points for making online payments and these points can be redeemed against many purchases and services.
More Reliable Method
People tend to rely more on the merchants who accept online payment through their websites in today's world. As it eliminates the risk of fraud, people consider merchants that offer online payment systems. If a customer does not receive the desired goods that he has purchased, the online payment method secures his money and minimizes the risk of fraud. People find online payment methods more reliable and they find it easy to make transactions with businesses.
The recurring payment is the method where a merchant can deduct the funds automatically from the customer's account for the sold goods or services on a specific period. Online payment method makes it easy to get paid on the regular basis automatically from the accounts of its customers.
This method is generally used by companies that sell their goods and services for a fixed price. A gym membership or monthly magazine subscription is an example of a fixed recurring payment. Online payment helps you pay your bills automatically without worrying about the monthly payments.
The present world is the world of technology. These technologies are making life easier, faster, and better. An online payment system is another advantage of this computerized era where one can sit back in the home and get different services and make multiple transactions through online payments.
A customer does not need to carry a purse or wallet full of money to make a purchase neither he will have to stand in a long line for a long time to make different payments. People can make payments no matter wherever they are. Payments can be made anywhere and anytime.
A businessman should make sure to allow his clients and customers to make payments online to grow his business faster.