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 (This has since been rescinded.)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.