An E-payment System typically involves the following phases:-
This phase involves the registration of the payer and the payee with the issuer and acquirer respectively. Most e- payments designed require respectively. Most electronic payments designed require registration of payers and payees with their corresponding banks so that there is a link between their identities and their accounts held at the bank.
In this phase, the payee obtains an invoice for payment from the payee. This is accomplished by either browsing and selecting products for purchase from the merchant’s (Payee’s) website in case of purchases made through the internet or obtaining an electronic invoice using other electronic communication medium like e-mail. The importance of this phase is that, it sets the mandatory and optional data variables that should be included in a payment protocol.
3.Payment Selection and Processing:-
In this phase the payer selects type of payment, (card based, e-cash, e-cheque, etc.) based on the type of payment the payee accepts. Based on the selection, the payer then sends the relevant payment details like account number, unique identifiers of the payer to the payee along with accepted amount based on the invoice.
4.Payment Authorization and Confirmation:-
In this phase, the acquirer on receiving payment details from the payee authorizes the payment and issues a receipt containing the success or failure of the payment to the payee. The payee based on the message may also issue a receipt of payment to the payer.
Steps for choosing the best Electronic Payment System:-
- Learn the various categories of e-payment system.
- Find the category that dominates e-commerce.
- Examine the differences in how transactions work in physical world versus online.
- Plan to put the components to enable electronic payments into place.
- Evaluate payment methods for their ease-of-use by all parties involved, including consumers, merchants, and financial institutions.
- Know the actual costs of a transaction.
- Set up credit card verification.
- Enact protocols that ensure online security.
- Help your customers develop trust in online transactions.
Benefits on an E-payment System:-
Following are the benefits of an E-Payment System:-
1.Processing Cost Reduction:-
An electronic payment system lowers the associated process time by automatically initiating and processing payments.
2.Minimize Overdue Payments:-
An electronic payment system accelerates credit and collections by giving customers, collection groups and internal customer service department’s greater visibility into payment status
3.Simplify Dispute Management:-
With an electronic payment system, companies enjoy improved data accuracy and automated disbursement, receipt and payment processing to streamline vendor disputes management.
An electronic payment system makes it easier to track and monitor data to ensure adherence to complex and monitor data to ensure adherence to complex compliance regulations and all business rules.
An electronic payment system is highly secure, safeguarding cardholder data and preventing payment fraud better than paper-based payments can achieve.
6.Improved Workflow Efficiencies:-
Increased automation is a key feature of a robust electronic payment system, enabling less reliance on time-consuming and costly manual business processes.
7.Greater Visibility into Financial Supply Chain:-
With access to reports and comprehensive corporate financial history, an electronic payment system gives management and other authorized users easy decision-making and process efficiency.
8.Day Sales Outstanding (DSO) Improvements:-
For suppliers, an electronic payment system can immediately improve DSO numbers by allowing them to electronically receive and process payments from commercial customers.
9.Minimum Human Intervention Required:-
An electronic payment system requires minimum human intervention and it also facilitates storage and retrieval of records.