PAYMENT OPTIONS

blog
Payment gateways, Digitals Currencies, Crypto Currencies, Credit Cards...

The number of alternative payments has grown exponentially in the last few years due to the need for billing solutions on the Internet. Limited credit card penetration and customary local payment habits, combined with tight credit and security fears to use credit cards for online payments has increased the usage of alternative payments on a worldwide level.

Alternative payments are offered by domestic banks and payment processors that offer merchants a variety of billing solutions. Most alternative payments have online applications and are integrated into electronic shopping carts used by online merchants.

Several billing solutions have been devised specifically for web-based merchants to accept alternative payments online and to support and access distant markets. Alternative payments are used throughout North America, Europe and Asia, and have penetration levels of sixty percent or more in various countries. Language, currency and support, including trust and familiarity, often contribute to the success of a domestic alternative payment solution.

Debit cards and charge cards are accepted worldwide as alternative payment and in some cases, debit cards are designed exclusively for use on the Internet, and there is no physical card only a virtual card. Certain systems also require the use of a PIN when a debit is used for online purchases.

Crypto debit cards have become increasingly popular with the rise of digital currencies like bitcoin. These cards operate on traditional card infrastructure, but use digital currencies as the exchange of value.

European online direct debit solutions are particularly popular due to the lower use of credit cards in Europe as compared to other countries like the United States. Transactions can be approved in real-time and funds in 1 to 3 business days. Chargebacks remain a risk inherently when debiting a consumer's bank account, however, using additional verification systems reduces the risk significantly and many payment processors maintain an extensive fraud database that mitigates the risks.

Using bank transfers to accept payments does not carry any inherent risk to the merchant, which makes it particularly attractive to both high and low risk merchants seeking to reduce chargebacks. The drawback to this approach from a merchant's perspective are that re-billing cannot be made automatic and billing does not occur quickly, as their customers must manually transfer the funds.

Electronic checks allow funds to be withdrawn directly from the consumer's account. Recurring payments can be set up and the consumer's personal information can be verified instantly. Merchants that opt to accept electronic checks enjoy convenient processing that reaches a large number of consumers that do not own credit cards or do not wish to use credit cards to make payments. Electronic checks are known to have long clearing times of up to five business days and carry an inherent risk of charge-backs. Checks that have been verified may come back after the clearing time as “insufficient funds”, meaning that the consumer does not have sufficient funds in their account to pay the balance of the transaction.

Phone payments describe a system of allowing consumers to purchase products or services using their phone number. In most cases, the charge is verified via phone or SMS messaging before the transaction is approved. The resulting charge is then added to the customer's phone bill.

Phone billing is accepted in many countries and offers a flexible way for merchants to accept payment, especially online, where the risk of fraud is elevated. While convenient for the consumer, phone billing has several inherent issues for merchants. Payment processors that support phone billing typically charge a higher rate because the payments must go through an additional party, the phone provider, before reaching the merchant. The clearing time on funds is also exceptionally high because the funds are not collected until the consumer pays their phone bill.