One of the notable features that determine the success of an e-commerce store is the seamlessness of transactions. Multiple factors are responsible to ensure successful payments on a website/app – a crucial one being the availability of your customers’ preferred payment options.
The increase in online shopping has led to the introduction of a number of e payment systems and it is important that every e-commerce business includes them for hassle-free payments.
This article throws light on the different types of e payment systems and the role of a payment gateway in enabling them for your online store.
| What is an E payment system? An electronic payment system is a means of making payments online without the use of cash. It can be done using credit cards, debit cards, e-wallets, bank transfers and so on. |
What are the different types of E payment systems?
Here’s a look at the various e payment systems used by buyers when shopping at an online store.
Credit cards
A credit card which is usually offered by banks allows users to borrow funds and make transactions within a pre-approved credit limit.
Customers usually prefer using a credit card because they can purchase anything without having to pay immediately. The amount is added to their monthly bill and can be cleared on the due date or even converted into an EMI.
The number of credit card holders in India has increased from 29 million in March 2017 to 62 million in March 2021.
Credit cards are widely utilised for e-commerce transactions due to their secure features and ease of use. Enabling credit card payments on your website can help your customer shop without having to worry about paying upfront.
Debit cards
Unlike credit cards, debit cards can be availed easily without any prerequisites related to eligibility or documentation. Usually, everyone who opens a bank account is issued a free debit card making it one of the important payment systems to include on your website.
In the financial year 2021, there were over four billion transactions made via debit cards across India. This is estimated to rise up to over eight billion transactions in the financial year 2026.
Offering debit card payments on your ecommerce store is crucial for your business to be able to reach a bigger audience who might not be tech-savvy or have access to other modes of e payments.
Smart cards
Smart cards appear like credit/debit cards but have a microprocessor that stores your customer’s personal information and can be used for online transactions by adding money to it. The amount is deducted based on the usage and the user can reload from the bank account based on their requirements.
Smart cards are not a popular method of e payment system in India however, it is advisable to include the option at your store to make it favourable for users who prefer this e payment system.
E-wallets
E-wallets act just like physical wallets except that all the cards and money are virtually stored. They help with instant payments and quick checkouts while purchasing on the internet.
The estimated value of mobile wallet transactions in the financial year 2021 across India was over 1.5 trillion Indian rupees. Rising smartphone penetration along with increasing competition in the domestic market can be attributed to the growing value.
E-wallets are fairly advanced versions of e payments and users can add money to their wallets through credit/debit cards, net banking or using UPI.
India has seen a rise in the number of e-wallet companies offering incentives to their users such as cashbacks and discounts to encourage them to transact more and more through e-wallets.
Net banking
Transactions done through net banking help users pay online directly from their bank account. Customers can access their bank account online through their user-id and password and proceed to make the transaction.
However, owing to other quick and convenient methods of payment, net banking does not enjoy high popularity among the e payment options. It is a payment method to turn to if other methods are unavailable or not functional – nevertheless, an important part of the e payment systems.
Buy Now Pay Later
Buy Now Pay Later (BNPL) is a popular method of payment among young buyers who prefer easy access to credit that simplifies payments for them. BNPL is similar to a credit card where the consumer can pay the bill amount at a later date however, this e payment system is much easier to access without any stringent verifications or checks.
The BNPL payment adoption is expected to record a CAGR of 54.3% during 2022-2028. The BNPL Gross Merchandise Value in the country will increase from US$ 3656.3 million in 2021 to reach US$ 93509.1 million by 2028.
Businesses offering the BNPL e payment system can help the tech-savvy audience shop faster and without any complicated steps or processes.
How does a payment gateway enable e payments
Your online e-commerce store requires a payment gateway to enable all the above-mentioned e payment systems.
A payment gateway helps merchants accept online payments through several complex steps that it manages effectively to process transactions within minutes.
It is not feasible for an online store to handle multiple e payment systems without a robust and reliable payment gateway. Whether you are a newly launched e-commerce website or an established shopping platform, seamless payments are an important aspect for all businesses.
Paytm Payment Gateway is preferred by startups and enterprises across the country to ensure smooth transactions on their website and app. The payment gateway offers unique features and advanced tech infrastructure.
Here’s how Paytm Payment Gateway enables different types of e payment systems for businesses
Multiple payment options: With options such as credit cards, debit cards and net banking Paytm Payment Gateway supports 100+ payment sources. Your customers can also use the Paytm Wallet and Paytm Postpaid for payments.
Quick integration: Paytm Payment Gateway’s onboarding process is completely online. The powerful APIs and custom SDKs activate digital payments on your website/app with minimum documentation.
International payments: Paytm Payment Gateway lets merchants accept payments in 100+ currencies without the need for separate API integration. This feature is very helpful when you plan to expand and target a global audience.
Industry best success rates: Paytm Payment Gateway has 250mn+ saved cards, 100mn+ saved bank accounts and 15mn UPI IDs that ease the checkout experience for customers while reducing the transaction time and increasing success rates.
Conclusion
India has seen a meteoric rise in e-commerce as more and more people prefer shopping online. The advancements in tech have also made it easier and more convenient to purchase goods on the internet. E payments are a part of this revolution and have transformed the shopping experience for customers.
Every online business must strive to make transactions seamless for their customers by ensuring that their preferred method of payment is offered on the website/app. Paytm Payment Gateway simplifies this process for a business by offering maximum e payment methods for easy and instant online payments.
