Types of eCommerce Payment Systems

An e-commerce payment system allows you to pay for on-line transactions using electronic payment. According to The Office of Fair Trading, about 30 percent of Internet users do not shop on-line because of a perceived increased risk of fraud. Though e-commerce fraud can happen, the introduction of such added security measures as a card verification number on credit card transactions helps to diminish the occurrence of fraud.

1. Credit Cards

   • The most common form of payment for e-commerce transactions is through credit cards. To use this system, shoppers simply enter their credit card number and date of expiry in the appropriate area on a web page. Increased security measures, such as the use of a card verification number (CVN), located on the back of the credit card, have been added to on-line credit card payment systems. The CVN system detects fraud by comparing the CVN with the cardholder's information as supplied by their bank.
     

   Digital Wallets

   • A digital wallet, or e-wallet, is another type of e-commerce payment system. Much like a physical wallet, a digital wallet can store your personal information and payment. However, digital wallets are stored within your PC. Once the software is installed on your digital wallet, enter your personal information, such as your name and billing address, then connect it to your banking information so you can use it to withdraw funds from your account(s) when making on-line purchases. When you're at the check-out page of an e-commerce site, the digital wallet can automatically enter your personal and banking information into the appropriate areas.
     

   E-cash

   • An e-commerce system that uses e-cash refers to a system in which money is only exchanged electronically. To use e-cash, link your personal bank account to other payee accounts or set up an e-cash account using a centralized system, such as PayPal, and link it to your personal bank account. To fund your e-cash account, you can debit from your personal bank account or credit card. To make payments using your e-cash account, you can make a deposit to the other person's e-cash account if you have their banking information, or request a transfer to their bank account.
     

   Mobile Payment

   • The newest e-commerce payment system is mobile payment, wherein a consumer uses her cell phone to make purchases. Instead of using cash or credit cards to buy something, the user simply sends a payment request via text message. If the vendor has the mobile billing capability, the consumer's mobile account or credit card is charged for the purchase. To set up a mobile payment system, download a software package from your cell phone company's website, then link your credit card or mobile billing information to that software.