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The share of consumers buying goods online is growing every yr around the world. The variety of online stores can be increasing. Owners of online businesses need specialized services or an online business account in UK to accept payments from abroad (that’s, go international) and generate checks. Keep reading to learn what these services are and the way to select the best one.
What’s a Payment System?
When a customer makes a web-based purchase, she sends money for the product using an electronic payment system, or EPS – software that records payment. The payment system connects the parties to the trade transaction, debits funds from the client’s checking account, and transfers them to the seller’s bank. Participants in the transaction could be legal entities and individuals, credit organizations, and representatives of presidency agencies.
Entrepreneurs must offer convenience for transactions and the security of funds – theirs and the client’s. Subsequently, they need a great payment system that is useful for each parties to the transaction.
Laws regulates the activities of payment systems. Thus, payment acceptance services mix the functions of a technical operator and a supervisory authority, solving essential problems:
- Ensure uninterrupted operation – the buyer pays for the goods at any time;
- Guarantee safety;
- Protect against failures in financial transactions.
Some payment systems provide additional functions that increase customer loyalty – they provide a customized design with the corporate colours of the store company, and supply rare payment methods, for example, with cryptocurrency.
What Payment Systems are There and What Businesses Need Them?
Payment systems are needed by everyone who sells anything via the Web – goods and services of varied kinds.
There are two most important kinds of payment systems:
Web Banks-Acquiring Services
These are services that accept payments from bank cards. They’re suitable for entrepreneurs with a longtime repute, whose overwhelming majority of clients are willing to pay by card online. These services are often cheaper, and the fees for using them don’t exceed 4–5%. Most frequently, they provide a current account and online accounting together with them.
The drawback of any such service is that not all buyers are willing to pay by card. Some people find it more convenient to transfer funds from electronic wallets, through terminals, from a cell phone account, or other methods. Customers could also be wary of leaving card details on the website of an unfamiliar store.
Payment Aggregators
These services offer many methods of accepting payments, including bank cards, electronic wallets, payment through a terminal, contactless payment using a smartphone, and others.
The drawback of payment aggregators is that prices, when used, are higher than in the case of banks-acquiring services, and commissions reach 10%.
How the Payment System Works
The payment system uses complex algorithms, but transactions are accomplished inside a couple of seconds. That is where payment systems profit from standard bank transfers, which may take up to three days.
Customer money and payment information undergo the following stages:
- The customer places the product in the cart on the website, enters card or wallet details, and pays for the purchase.
- Money is converted into electronic currency for further processing, and a commission is charged from the client – if the payment model implies this.
- Transaction information goes to the payment gateway.
- The system checks the security of the transaction.
- The information is transferred to the acquiring company.
- The acquirer transmits the data to the payment system.
- The payment system checks security at the next level.
- The knowledge goes to the issuing company, where it also undergoes a security check.
- The issuer transfers the amount to the acquirer.
- The acquirer holds the money in the trading account.
- The customer receives a receipt by email or SMS.
- The vendor receives money in his account (merchant account) and might withdraw it if obligatory. Commission is withheld if the payment model involves taking a commission from the seller.
Reliable payment acceptance tools for online stores use the only security systems. When making a payment, clients trust the company, enter their details through the payment service, and must make certain that their data is protected against fraudsters.
Conclusion
An excellent payment system must be comfortable for the entrepreneur and the client, allow the business to legally accept payments, and make it easier to work with routine paperwork tasks.
One of the small print when selecting is the profit from the purchase when it comes to calculating commissions and subscription fees: the payment service should allow you to earn money. Tools and options for services suitable for a selected business will help increase profits, retain current customers, and attract recent ones.