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E Commerce Payment Systems for Business in 2020 .pdf

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E-Commerce Payment
Systems for Business
in 2020

The Definition
An E-payment system is a system that allows your customers to pay for products and services
online. This complex mechanism works with the purchaser, merchant, purchaser’s bank,
merchant’s bank, payment processor, and payment gateway.

Types of Electronic Payment Systems
Depending on the electronic payment method, E-payment systems can be divided into:

Cash Payment Systems that include Direct Debit and E-Checks.
Credit Payment Systems that include Credit Cards and E-Wallets.

Of course, cash will be around for a long time — but according to WorldPay, the global part of
E-payment transactions, including credit cards, debit cards, and mobile wallets, will increase to
83% by 2022. Here is some additional information from Infopulse on how the total transaction
value of digital payments will grow.

How Does Electronic Payment Processing Work?
We have discussed the importance and benefits of having a modern electronic payment system;
now, let’s dive into specifics. Whether you run a marketplace, own a big E-commerce business, or
represent any other industry online, you need a payment solution that will help you and your
customers get all the benefits mentioned above.

To accept and process E-payments online, businesses need an E-payment gateway. This is a
service that is used for both online and brick-and-mortar stores and enables transactions between
buyers and sellers. The gateway is protected with security protocols and encryption to provide the
safest transactions possible between all parties. Determining what gateway you will choose also
defines what currencies your business can accept, the cost of transaction fees, and the speed of

Choosing the Best Way to Integrate an E-Payment Gateway
There are three methods to integrate a payment gateway; the best fit will depend on the size of your
business.Small business owners will probably prefer the Hosted Payment Gateway method if they are
fine with processing the payment externally. Like in the previous case, no PCI compliance is required,
as all the processing is handled by the service provider. This method is simple and fast to integrate.
However, the drawbacks here are quite significant —you can’t control a hosted gateway. To make a
payment, customers must leave your website — this is not good in terms of conversion and marketing
in general. Additionally, some buyers may be suspicious about going to third-party websites, which
weakens your brand image. On the other hand, integration is easy — all you need to do is to add
JavaScript code, which will serve as your “Buy” button and direct the customer to the third-party
website to make a transaction.

Businesses of any size can use the Direct Post method. After the purchase, the data instantly gets
to the gateway and processor. You don’t need to have PCI compliance, because your platform will
be used only for shopping and none of the money transaction details will be on your server. With
this approach, you will have room for branding and customization options; also, a customer won’t
leave your website for the purchase. The downside is that Direct Post is not the safest method in
terms of security. To integrate this way, the vendor must make an API connection between a
payment gateway and the shopping cart on your website to transfer the information.

If you have a medium to large sized business, your brand image and user experience are very
important and are crucial factors in revenue and potential growth. That’s why the integrated method
can work best here. This approach will keep your customer on your website all the time and you
will get complete control over the payment process. You will be able to adjust and customize the
payment system just as you want. The main drawback is because you need to support a payment
system yourself, it could get very expensive. You will store the financial information of your
customers, so you need to get PCI compliance to even be able to do that. If you have custom
features in mind, they may be quite sophisticated to implement. You need a team of experts to
successfully execute the integration and add APIs to your server. While vendors offer detailed
guides on this process, it is better to find the right team to perform it.



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