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Back in the 1990s, online retailers used a cashless payment system based on the Card Not Present principle. Due to the slow Internet and frequent connection interruptions, banks could not implement full-fledged acquiring with card balance checking. Instead, they used the Luna formula to check the card details to determine whether the bank could potentially issue such a card, and then sent the goods. At the end of the business day, the sellers would call the bank, provide payment details, and demand money. Naturally, hackers paid attention to the verification formula and algorithm. In 1999, they developed the first "valid" card generators and started placing orders for everything. The sellers confirmed the validity of the generated cards, but when they contacted the bank, they faced a surprise - the card did not exist.
Online payment methods on the website
With the development of digital commerce, fully digital online payment methodsincluding electronic money. In this case, you buy electronic currency on the official website and then pay for the goods in the store. The seller receives payment instantly, as the transaction is carried out within a single system, eliminating the need for interaction between two slow banks. The e-money issuer guarantees the exchange of electronic currency back to fiat money, which ensures the security of the transaction. Also, accepting online payments on a website in cryptocurrency is a good payment method. Cryptocurrencies are often used by digital goods sellers, freelance programmers, and new technology enthusiasts. Although cryptocurrencies have no issuers that are guaranteed to exchange coins for fiat money, they can be safely sold on an exchanger or exchange. There is also an unusual payment method - exchange codes. The buyer creates a digital check for a certain amount in his wallet. The bearer of the code receives the money associated with this check to his or her wallet. To prevent possible fraud, exchanges have learned to generate checks at the seller's request with the amount.
Ways to accept online payments on the Internet
Before implementing payment methods to the website, it is necessary to agree with service provider. However, it is important not only to conclude a deal, but also to integrate its payment system, set up infrastructure, and provide security to ensure customer satisfaction and prevent fraudulent activities.
Acquiring - is a simple method of connecting payments from a website via Visa or Mastercard. Usually, acquiring is performed either by the bank itself or its subsidiary. Acquiring is a direct contract without intermediaries, which is usually accompanied by small commissions, starting from 1.5% and above. When using acquiring, the seller receives a confirmation of the withdrawal of money from the buyer's card. The payment itself arrives in a few days: first, the card issuer transfers the funds to the acquirer, and then the acquirer credits them to the seller's card account.
The following features exist:
- The seller receives payment within 1-3 banking days;
- The use of acquiring can increase customer confidence in the website;
- If you have a large volume of transactions, you can negotiate a lower fee.
Gatewayknown as the Internet Payment Gateway, acts as an intermediary between the merchant and several acquirers, ensuring the reliability of payment transactions even in the event of possible communication failures. The use of the gateway is justified in case of a possible loss of communication with the acquirer. How it works: a customer makes a payment, and the gateway sends transaction information to one of the connected acquirers. If one of them is unavailable, the payment will be redirected through the other, ensuring a smooth process for the customer. This is an effective way to implement bank card payments on a website, especially in case of network problems with local banks.
Here are some key features of the gateway:
- The gateway simply sends the payment data, while the merchant has to conclude contracts with each acquirer independently;
- The transfer of information through the gateway guarantees the security of the seller's funds;
- Setting up a gateway can help reduce fees and delays in crediting funds to the merchant's account.
Payment systems provide direct support for electronic money systems. To use these systems, you need to conclude a separate agreement with each of them and set up integration with your website. Although this payment method is not so common, as most people receive their salaries to bank cards rather than e-wallets.
Some of the features include:
- The ability to attract customers who prefer to use electronic payment systems to generate income.
- The ability to accept payments from foreign customers through their most popular payment systems.
Usage of payment systems can be a useful addition to other payment methods on your website, especially if you are targeting an international audience or want to attract customers who prefer e-wallets.
Payment aggregator is an ideal solution for accepting payments on your website. It acts as a universal intermediary that has already established contacts with all major acquirers and payment systems and set up their interaction and payment methods. For an entrepreneur, it is enough to connect the aggregator module or use its API to easily and confidently accept payments in any convenient way.
Some of the key features include:
- The only intermediary that provides a wide range of payment methods.
- A fixed fee that does not depend on the turnover.
- Easy connection without the need to meet strict requirements for your website or company.
Usage payment aggregator greatly simplifies the process of accepting payments on your website, providing convenience for both you and your customers.
Advantages of accepting online payments and paying via the website with a bank card
The main advantage is an increase in sales. Customers are used to paying for purchases with a bank card in large online stores, and they fully trust this payment method. If your online store doesn't offer the option of simply entering card details and a password, potential customers may turn to competitors. On the contrary, customers will appreciate the ability to choose a product and make a secure payment, which is more attractive than waiting for a manager to call to clarify payment and delivery. The second advantage is the automatic crediting of funds to the current account without the need to receive checks. It also makes accounting easier, as all the necessary statistics are available in the computer. The third advantage is the guarantee that the buyer will receive his purchase, since he has already paid for the goods in full.
How to accept online payments and payments via the website with a bank card
We start by researching the market for a suitable intermediary, which can be an acquirer or payment aggregator. We establish contact with the chosen intermediary and receive a detailed list of requirements for our website, as well as a list of necessary documents to pass the verification process. After the verification process is completed, we open an account with the acquirer and then receive a special module for integrating the payment system on our website, along with a unique identifier. After that, we start setting up and mandatory testing of the entire system to make sure it works correctly before we start accepting payments.
How online payment for goods and services works through the website
The process of making non-cash payments using bank cards is a complex sequence of actions performed by both the customer and the payment system to complete the transaction. When a customer makes a purchase decision and selects the "Pay" option, they are automatically redirected to a special page to enter their card details. If an acquirer is used, the user immediately enters their bank details. If an aggregator is preferred, the user must first select the appropriate payment method and then enter the relevant details. After the user has entered all the necessary data and clicked the "confirm" button, the acquirer sends a confirmation request to the payment card or wallet issuer. The issuer, in turn, verifies the possibility of the transaction and sends the customer a one-time password to confirm their identity and ensure the security of the transaction. When the customer enters the password, the acquirer sends it back to the issuer. If the provided password matches the expected one, the issuer charges the required amount from the customer's card and sends a notification to the merchant about the purchase.