Electronic payment System – Types and Features of E-payment

Electronic Payment System:- It an e-commerce environment, payments take the form of money exchange in an electronic form and are therefore called electronic payments, Electronic payments (e-payments) are an integral part of e-commerce and are one of its most crucial aspects.

Electronic Payment System

“Electronic payment is a form of a financial exchanger that take place between the buyer and the seller facilitated by means of electronic communications. Electronic payment is a  financial exchange that takes place in an online environment.”

An electronic payment system is a system of financial exchange that is facilitated by a digital financial instrument such as encrypted credit card numbers, electronic cheques backed by a bank.

To a consumer, an electronic payment system is a convenient way of making a purchase or paying for a service without holding cash or having to go through the process of completing a cheque and producing some form of acceptable identification.

To a supplier of goods or services, and electronic payment is the receipt or outward movement of funds, linked into inventory management, ordering or accounting system, eliminating the need of large cash holding, time-consuming clerical activities and offering easier management of cash flows.

To an account\ payment manager or bank, electronic payment is a series of a process by which value exchange is captured, verified and accepted; a series of checks, balances to ensure integrity,

E-payment is based on electronic financial network and communication technologies as a means to realize circulation and payment by making use of binary data stored in the bank computer systems.

Thus an e-payment has the following features:

  • It is supported by computer technologies. It realizes storage, payment, and circulation.
  • Multiple functions are integrated together, including deposit, loan, and non-cash settlement.
  • It is widely applied to areas such as production, exchange, distribution, and consumption.
  • It is simple, secure, fast and reliable.
  • It is usually accomplished through an exclusive network for banks.

Electronic payment systems facilitate the most important action after the customer’s decision to pay for a product or service; which is the delivery of payments from customers to vendors in a most effective, efficient and problem-free way.

Types of Electronic Payment System are:

  • Electronic cash
  • Electronic wallets
  • Smart cards
  • Credit cards
  • Debit cards
  • Charge cards

Also Read:-

What do you mean by e-commerce?

Why is e-commerce important? 

What are the functions of e-commerce?

Advantages and Disadvantages of E-commerce