The rapid development of online commerce has made it necessary to find new ways of paying for goods and services that are both easy to use and secure for sellers and buyers. In addition to the classic bank transfer or direct debit, there are various ways to pay for goods or services online.
Differentiation according to the time of payment
A basic classification of the numerous payment systems can be made according to when the payment is actually made:
- Pre-paid payment
- Pay-now payment
- Pay Later payment
A pre-paid method provides for the deposit of a credit amount on a storage medium, such as a rechargeable credit card or a virtual wallet. This means that the deposited amount is available at any time and can be accessed in installments or all at once until the credit is exhausted and a new top-up is necessary. Prepaid credit cards are offered by various banks.
In principle, this pay-as-you-go procedure corresponds to cash payment and is the most widespread. It is implemented, for example, in the form of direct debits or with the use of a PayPal account. In the case of direct debit, the buyer gives the seller permission to access a bank account and debit the agreed amount. Thus, payment is made at the time of the transaction, so that the service or goods are paid directly. The largest provider of online payments is PayPal, through which both private and commercial customers can receive and send payments online. For this purpose, a virtual account is set up that protects the deposited bank data, so that the e-mail address is sufficient to initiate transactions. Another variant is Sofort, which significantly speeds up the classic bank transfer. The buyer hands over his own account details to the service provider, so that the latter can check the availability of the amount and trigger the transfer immediately. Since he receives a commitment from the customer’s bank that the transaction will be executed, the seller can quickly dispose of the amount.
Pay Later payment
In this variant, customers can make a purchase and pay later. The most common form is the classic credit card, which credits the merchant with the amount that is later billed to the customer via credit card monthly statement. In addition, this category includes the classic bank transfer, as the customer receives the goods and then instructs the amount, the billing procedure or mobile payments. In the case of billing, smaller amounts are totaled and, depending on the agreement, debited at regular intervals. Mobile payments, on the other hand, are processed via cell phones. Billing then takes place with the cell phone bill or directly via a bank account.
Online businesses also offer classic payment systems, such as direct debit, bank transfer, cash on delivery or payment in advance. If a customer relationship has existed for some time, merchants concede the option of payment at a later date if payment behavior permits. Advance payment, where payment must be received before the goods are shipped, is the preferred option for unstable or new customer relationships. Cash on delivery, where the letter carrier collects the amount due, can be chosen as an alternative, as both seller and buyer enjoy maximum security in this way.
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