Electronic Payment Services: Different Types and Their Uses
Modern consumers want convenience. This is why eCommerce is exploding in growth and popularity. Global eCommerce sales are projected to reach $7.38 trillion in 2025. From taking educational courses to shopping for necessities, people around the world are turning to the internet to obtain the goods and services they need.
The boom in eCommerce provides an excellent opportunity for businesses to generate more revenue. But to take advantage of this gold rush, you need electronic payment services. What are electronic payment solutions and which one is right for you? This post will discuss all the different types of solutions to help you choose the best online payment service for your needs.
What Are Online Payment Services?
Prior to learning about the different types of e-payment services, you must understand what they are. Electronic payment services are payment providers that allow people to transfer funds online without using cash, paper checks, or physical cards. If you’ve bought something from a website or paid bills online, you used an e-payment service to complete the transaction.
Online payment services provide a platform to merchants to accept electronic payments. While many services offer free signups, merchants must pay monthly and/or transaction fees to process online payments. Many factors, such as the type of online payment you process and the industry you operate in, will determine your transaction fees.
Types of Electronic Payment Services
Online payments are a complex network with many parties and technologies to facilitate transactions. Although it seems like one convenient system, you need many different services to accept online payments. Because every business has unique needs, payment providers offer a range of solutions to satisfy different requirements.
So, which online payment service is best for you? Below, we’ll go over the different types of electronic payment services and their uses so you can find the right solution for your business:
Payment gateways are cloud-based software that ensure valid and secure online transactions. The technology captures payment information, encrypts the data, transmits anonymized data to and from the online payment system, and authorizes or declines transactions. Gateway services are crucial to minimize payment fraud and protect your business from excessive chargebacks.
A payment processor is a third-party company that facilitates the movement of funds from the payer to the payee’s bank. After receiving payment data from the merchant’s gateway, the processor will route the information to relevant banks and card companies to verify the details. Once payment is verified, the processor will inform the gateway to approve the transaction.
Merchant Account Providers
Merchant account providers or payment processors offer merchant accounts to businesses. Without a merchant account, you can’t process online debit and credit card payments. Since credit cards are the most popular online payment method, you need this electronic payment service to build a thriving business.
All-In-One Payment Solutions
While some merchants prefer to get three independent services from different providers, others go for all-in-one payment solutions. A fully integrated service like Seamless Merchant combines payment gateway, processor, and merchant account into one solution to meet all your payment needs. This all-in-one model eliminates integration issues and improves processing efficiency.
Why Do You Need Electronic Payment Services?
Before we give you tips for picking the best online payment service, let’s explain why you need to process electronic payments. If you want to run an online business by accepting money orders and mail-in checks, your business will not survive for long. On the decline even pre-COVID, the pandemic is making physical forms of payment like cash and checks obsolete.
Post-pandemic societies have embraced a cashless and paperless way of life. In 2021, more than 82% of Americans used digital payments to buy goods and services. If you don’t accept online payments, your business becomes out of reach for a large segment of consumers. Along with expanding your audience, here are other reasons why you need electronic payment services:
The most common reason why merchants avoid online payments is the perception of high processing fees. Contrary to popular belief, online payments can actually help merchants save money. The entire payment process is automated – online transactions are more efficient to handle. This increased efficiency can cut your payment processing costs by 57%.
Electronic payment services can increase your sales opportunities. According to a Visa study, 74% of SMBs experienced an increase in revenue after accepting online payments. Whether you offer live cooking classes or sell handmade soap, processing online credit card payments will allow anyone from anywhere in the world to buy your products or services.
Yes, processing online payments comes with some risks. But according to an Association for Financial Professionals (AFP) report, paper checks were the payment method most impacted by fraud in 2020. Accepting fraudulent payments does significant damage to your finances. The best online payment services provide advanced security to help you minimize processing risk.
How to Choose the Best Electronic Payment Service
Now that you know online payment services are essential for running a successful business, let’s walk you through picking the best service. Searching for exemplary service can be overwhelming with all the online payment solutions on the market. Use these tips to narrow your search and find the best payment provider for you:
Serves Diverse Industries
Whether you operate in a fraud-prone industry or process a large number of transactions, your business will be considered high-risk. When you are given the “high-risk business” label, you will struggle to maintain your merchant account. Make sure the payment provider can serve both low- and high-risk industries so you can keep processing online card payments with no trouble.
Electronic transactions are much safer than physical payments but they are still vulnerable to fraud. To minimize online identity and friendly fraud, look for an electronic payment service that provides multiple layers of security. SeamlessChex offers a PCI-compliant payment platform and bank account verification services to reduce processing risk.
Different Payment Options
When searching for the best online payment service, you’re most likely looking for a credit card processor. Although a popular electronic payment method, keep in mind that almost 30% of Americans still don’t have a credit card. If you want to maximize your reach, find a payment provider like SeamlessChex that offers eCheck and ACH processing along with credit cards.
Fast Payment Settlement
Many electronic payment services place holds on your funds to cover the costs of chargebacks. This can impact your finances and lead to cash flow issues. Learn about their settlement periods before you partner with an online payment service. SeamlessChex can make funds available within one business day to help you meet your financial obligations.
Low Processing Fees
Although online transactions cost less than physical payments, electronic payment processing does not come cheap. Working with a payment service that offers low processing rates is important for increasing business profits. SeamlessChex provides free statement analysis that breaks down your current fees and shows how much you will save when you switch over your processing.
Sign Up for SeamlessChex Electronic Payment Services
In today’s digital age, you can’t run a successful business without accepting electronic payments. By automating payment processing and increasing your business’s reach, online payments can help you save and make more money. If you need a secure and low-cost electronic payment provider, look no further than SeamlessChex.
With the lowest processing fees, multiple online payment options, and state-of-the-art transaction security, we are the best online payment service you can find. Sign up for your free trial now to see how our intuitive platform works to grow your business. If you have any questions about our electronic payment services, contact us to get more help.