The world of payments is very fragmented, getting more complicated and become a commodity today. – there’s no one option fits all in any region and there are many electronic and direct payment methods so you’ll need to know about the best payment methods and options for your company. it is a solution for partners and merchants to provide differentiated payment solutions that bring value to all parties. Differentiate will come from new value creation in the greater process of companies that ultimately lead to payments and receivables.
In this article, we offered you the most popular and trend payment methods:
Cash is a legal tender (currency or coins) that can be used as one of the payment methods to exchange goods, debt or services. Sometimes it also includes the value of assets that can be easily converted into cash immediately, as reported by a company.
A cheque is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of the certain person or to the bearer of the instrument.
Money order payments is a paper document, similar to a check, it is one of the traditional payment methods used for making payments. Money orders are prepaid, so they are only issued after a buyer pays for the money order with cash or another form of guaranteed funds.
Debit Card, It is the most popular and used payment methods, it allows you to transfer money electronically from one bank account to another. With a debit card, you have many options available. For example, you can have an overdraft limit, which allows you to go over your available balance but this is capped at a certain amount. You can also withdraw money from ATM’s or bank machines with ease, as well as having the option to pay on your card at stores. If you do not have an overdraft limit then you won’t be able to go over your available balance when making payments however if you do, then you will be charged a set amount by your bank if you do not have this paid back by a specified date. Some debit cards are now also contactless, which means you don’t have to enter your PIN number if the purchase is under a set amount.
Credit Card is not linked to your debit card; however, it is a credit facility that still allows you to make immediate purchases. Your credit card will be capped at a set amount, which means that you cannot surpass this limit when trying to make a purchase. Many credit card companies will increase your limit over time if you prove that you can pay them back before the due date, which would allow you to borrow higher amounts of money at a later date. With a credit card, you will be asked to make a minimum repayment every month. It is possible to pay off more than your required limit, and this is especially beneficial if you want to avoid interest charges. With credit cards, the general rule is the faster you pay off your card, the less interest you have to pay at the end.
Charge Card is very similar to a credit card; however, you can borrow as much money as you want at any one time. You will get an annual fee from your charge card but you will also be given plenty of perks which may give you access to airport lounges and even insurances. Charge cards are ideal for high spenders and high earners, but not everyone is eligible because you may need to meet a minimum income requirement. When you spend money on a charge card, however, you will need to pay the full amount back by a specified date. You can’t pay it off over time and you won’t get the option to pay back a minimum amount. There are many banks that have charge cards available and in ways, they are very similar to credit cards but the payback scheme is very different.
Deferred Debit Card is a payment method where the purchase is made as normal but instead of the payment being taken out right away, it is taken out a few days later. With a debit card, you are normally asked to enter your pin number as verification. With a deferred debit card, however, you will be asked to sign a receipt as proof of your purchase. The balance on a deferred debit card is normally positive and the charge often takes 2-3 days to clear. The money due however may clear faster, and so it is up to you to make sure that the money is in the account at the time that the payment is taken out. If the money is not there, then you will receive a fee and this may not be apparent to you until you check your statement as the money does not come out right away.
Direct debit payments is an instruction from you to your bank or building society. It authorizes the organization you want to pay to collect varying amounts from your account – but only if you’ve been given advanced notice of the amounts and dates of collection. Once you have agreed with those, the money is deducted automatically. If the organization you are paying wants to change an amount or date of collection, they have to tell you about it first.it is the simplest and most convenient way for you to pay regular and occasional bills.
Electronic funds transfer at point of sale (EFTPOS) is a payment system which allows faster and safer digital fund transfers at payment terminals. Using this system, payment terminals located at the point of sale can be used with debit or credit cards for acceptance of payment. This system was devised in the U.S. during the early 1980s and became very popular in other countries as well.
Online Payment System (eg Paypal) is an Internet-based method of processing economic transactions. It allows a vendor to accept payments over the web or over other Internet connections, such as direct database connections between retail stores and their suppliers–a common method of maintaining just-in-time inventories. Online payment systems greatly expand the reach of a business and its ability to make sales.
E-wallet (digital wallet) is a secure place that contains one or more currency purses. Your shoppers can fund an eWallet in several different ways. Once funded, shoppers can use eWallets online to buy goods or services. A shopper must register with the provider, and may have to complete a full KYC (Know Your Customer) process before they’re allowed to use an eWallet. Some payment service providers have the concept of a verified and unverified eWallet account for users who have completed KYC and those who haven’t. Verified shoppers normally have a higher spending limit.
Pre-paid card is not linked to a bank account. Generally, when you use a prepaid card, you are spending money that you have already loaded onto the card. it is a form of a secured card that is tied to a previously deposited cash balance. Purchases made with prepaid cards are checked for approval against existing funds. Essentially a stored-value card, they usually carry major association logos and can be spent in the same way.
Bank transfer is the general term used to cover a wide range of credit transfers, including cash payments, giro-payments, and wire transfer to local banks They are the most common form of cashless consumer payments in most countries within the European Union and Asia–Pacific. Customers will generally initiate a bank transfer via one of the following methods: online banking, phone banking (also known as telebanking), mailing a payment form to the bank, visiting the bank and completing payment form in person.
Post-pay is one of the new payment methods for Native & Search advertisers that make it easier for you to process and handle your accounts and ad spends. You simply pay as you go, without having to pay charges upfront in your account. Your credit card is charged after you have accrued ad spends in Native & Search. When you hit a specific threshold for your ad spends, your account will be charged and bumped up to the next spend threshold.
Voucher, coupons, gift card, and cash back offer Voucher and Coupon are the same services offered a small printed piece of paper that entitles the holder to a discount off a particular product and service, or that may be exchanged for products or services, Gift Card is a prepaid stored-value money card usually issued by a retailer or bank to be used as an alternative to cash for purchases within a particular store or related businesses and Cashback meaning that is Each time of using the card, you earn a percentage of your spend back in the form of cashback.
Digital Currency (digital money and cybercash) is one of the payment methods which exists only in electronic form and is not tangible. Digital currency can be transferred between entities or users with the help of technology like computers, smartphones, and the internet. Although it is similar to physical currencies, digital money allows borderless transfer of ownership as well as instantaneous transactions. Digital currencies can be used to purchase goods and services but can also be restricted to certain online communities such as gaming or social networks.
Electronic Checks Many payment processors allow you to accept electronic checks or “e-checks” from your customers. The purchaser inputs her bank routing number and checking account number into your online order form. These details are then forwarded to the processor, who completes the transaction and deposits the net funds into your business account. One drawback of e-checks is that they do not process instantly as credit cards do. This means it’s possible for a customer to write a bad e-check to your business.