The percentage of customers making online purchases continues to grow annually worldwide, leading to an increase in the number of online stores. For online business owners, it is crucial to have specialized services or an online business account in the UK to accept international payments and issue checks. This article will guide you on what these services entail and how to choose the most suitable one.
Understanding Payment Systems
When a customer makes an online purchase, they use an electronic payment system (EPS) to transfer money for the product. An EPS is software that processes payments by linking the transaction parties, debiting the customer’s bank account, and transferring funds to the seller’s account. The participants in these transactions can include businesses, individuals, financial institutions, and government representatives.
To ensure convenience and financial security for both themselves and their customers, entrepreneurs must have a reliable payment system.
The Role of Legislation and Payment Systems
Payment systems operate under regulatory frameworks and serve as both technical operators and supervisory entities, addressing key issues such as:
- Ensuring continuous operation, allowing customers to make payments anytime.
- Guaranteeing security.
- Protecting against transaction failures.
Some systems offer additional features to boost customer loyalty, such as customizable designs with corporate colors and rare payment methods like cryptocurrency.
Types of Payment Systems and Their Business Applications
Payment systems are essential for anyone selling products or services online. The two main types are:
1. Internet Banks-Acquiring Services
These services process payments from bank cards and are ideal for businesses with a solid reputation and customers who prefer card payments online. They are usually cost-effective, with fees not exceeding 4-5%. Typically, they offer a current account and online accounting services.
However, not all customers are comfortable paying by card, preferring alternatives like electronic wallets, terminals, or mobile phone accounts. Some may hesitate to enter card details on unfamiliar websites.
2. Payment Aggregators
These services provide multiple payment methods, including bank cards, electronic wallets, terminals, and contactless smartphone payments.
The drawback is that they tend to be more expensive than bank-acquiring services, with commissions reaching up to 10%.
How Payment Systems Operate
Despite complex algorithms, transactions via payment systems are completed within seconds, offering a significant advantage over standard bank transfers, which can take up to three days.
The transaction process involves:
- The customer adds a product to the cart, enters payment details, and completes the purchase.
- Money is converted into electronic currency for processing, with a possible commission.
- Transaction details are sent to the payment gateway.
- The system verifies transaction security.
- Data is forwarded to the acquiring company.
- The acquirer transmits the data to the payment system.
- The payment system conducts a higher-level security check.
- Information is sent to the issuing company for another security check.
- The issuer transfers the amount to the acquirer.
- The acquirer deposits the money into the merchant’s account.
- The customer receives a receipt via email or SMS.
- The seller receives the funds in their account, minus any applicable commission.
Reliable payment tools for online stores use advanced security systems, ensuring customers’ data is protected from fraud.
Conclusion
A suitable payment system should be user-friendly for both the entrepreneur and the customer, legally facilitate payments, and streamline routine administrative tasks. When choosing a payment service, consider the benefits in terms of commission and subscription fees. The right payment tools and options can help increase profits, retain existing customers, and attract new ones.
