International Payment Processing: The Rise of Local Electronic Payments

There is no point in denying it. Technology is changing more rapidly than we might ever have imagined two decades ago, and electronic systems have now forever changed the way we work, communicate, and even the way that we purchase and enjoy books. Predictably, this trend has also affected the way we pay. Traditional payment avenues, such as cash and cheques, are being systematically replaced by innovative electronic forms of payment as markets respond to growing demand. In some European areas, like Scandinavia and the Netherlands, the use of cheques is virtually nonexistent. In 2009 the UK Payments Council reacted to declining cheque use by proposing they be phased out completely! (This has since been rescinded.) Rapid consumer uptake of electronic payment systems has meant that some countries’ banking systems are rushing to catch up and are currently very busy perfecting local electronic payment systems that can cope with an extraordinarily high volume of paperless transactions.

Popular forms of electronic payment processing are:

Direct Debit – a mechanism where your customer gives you authorization to debit funds directly from their bank account.

EFT – a blanket term used to describe the electronic transfer of money.

ACH – Automated Clearing House – the US specific system for processing electronic payments.

SEPA – Single Euro Payments Area – This is a standardized form of electronic payment used throughout the Eurozone. Using SEPA payments, funds can be transmitted across borders with the speed, simplicity and cost-effectiveness of a local domestic payment.

The electronic trend is heavily promoted by banks, as electronic payments mean less overhead and expense than those systems that require manual processing, such as cheques. They are more than willing to invest in systems that will deal with epayments effectively, ensuring that people can send and receive funds quickly and securely, moving as fast as their computers will allow.

In the US, bank-to-bank transfer payments are cleared through the Automated Clearing House, or ACH, system, which processes huge volumes of debits and credits electronically. Across the pond, the UK has developed FasterPayments, which offers the speed of a wire transfer with the administrative simplicity of an eft. Throughout the Eurozone, payments are streamlined by the existence of the Single Euro Payments Area, a group of countries within which a payment can cross borders and time zones with the same ease and efficiency as if both parties were in the same country.

You can be sure that as the demand for electronic payments grows, more countries will work to create and streamline their own specific electronic payment services to deal with the need. Payment processing companies also respond to the growing demand for electronic payment processing by offering a full suite of local electronic payments.

A Thorough Guide for Electronic Payments

Online businesses may experience problems with payment structure. Given the advancement of technology and the heavy reliance on credit cards, paying electronically is no longer an issue. With internet merchant accounts, businesses have seen a rapid increase in clients and sales. Adding security and efficiency that is now linked with the entire process and your business is assured success, so long as there are customers with credit cards online.

After the account is established, the following are the most critical parts of the entire process:

To ensure that everything went smoothly, run a test transaction through the terminal that should only cost a single dollar. Some credit card providers give out test numbers, but the use of an authentic credit card is also a good alternative. This enables the business owner to verify that the terminal works and that future transactions will be made.

After the test run is complete, check to see if the account associated with the merchant account has received the funds. It is important to remember that a) It takes around two business days for Visa and MasterCard to be finished, and around three days for Discover and American Express; and b) The amount deposited from the test transaction should match the previous batch total. This may not be the case for funds held for reserve and for accounts with fees debited on a daily basis.

Make a habit of checking the statements. Given that fees and rates are charged by the provider, the business owner should be responsible enough to review each processing statement to ensure that there are no errors, or to catch any errors as they happen.

Finally, make sure supplies are always well-stocked. Nothing is more embarrassing than running out of receipt tape in the middle of a transaction. Having a reliable supply count allows the business owner to concentrate on the business and sales, as well as the other online payments that will follow.

Online Payment Guide

The process for online credit card payments are as follows:

The first step involves the customer inputting the credit card information to a specific website on the internet or over the phone.

The information is then passed on to a credit card processor by a gateway or some other real-time processing system.

To prevent fraud, the credit card payment processor will assess the card and verify whether the request came from the card holder or through their billing address.

Whether the request has been denied or approved will be passed on to the party providing the merchant account, then to the customer, to finish the transaction.

Once validated, the amount is kept in the merchant account, ultimately getting transferred to the checking account of the business, or to a business account.

Once the accounts are up and running, the business owner can now focus on sales. The process may seem stressful and daunting, but once your company can accept electronic payments, you can rest easy knowing your business is up-to-date with the current trends in e-commerce, and ahead of the curve compared to other businesses who have not taken the leap yet.

Disadvantages of Electronic Payment Systems

Electronic money, also known as e-money, electronic cash, e-currency or digital cash, refers to money or scrip which is exchanged electronically. Basically, electronic payment systems are key enablers for mass acceptance of electronic commerce over insecure systems such as the Internet. In Business-to-Business (B-2-B) e-commerce, there is a rapidly growing interest in processing payments online.

However, these electronic payment systems have a number of a number of disadvantages also. You need to record to the establishment in order to be empowered to perform money transactions with them. Now, you need to have a username and password, and for that you need to have password aegis. Moreover, you also need to keep up an account per organization, which can be very irritating or pesky for you.

To make sure that your online transactions are solid, it is essential that you observe strict security policies. If password is capable of being hacked, it can mean serious fiscal loss for you. Banks or financial institutes that have your financial information can expose it to cyber-terrorist. So, there is unstated risk of your personal and account particulars being stolen.

The transfer of digital currency arouses questions such as how to impose taxes and the potential ease of money washing. There are also possible macroeconomic results such as exchange rate stabilities and shortage of money supplies.

Moreover, you are always at a loss if your card is stolen. If the card falls in wrong hands, there is a danger of expenditure of entire bank balance. You will obviously inform the concerned authorities about the loss but the time taken between losing the card and informing the authorities is critical.

The purpose of the above article is not to discourage people from making electronic payments but to make them aware of the inherent dangers that such payment systems involve.