Alternative payments refers to the payment method used as an alternative credit card payment. Most alternative payment methods discuss the domestic economy or have been developed specifically for electronic commerce and payment systems generally supported and operated by local banks. Each alternative payment method has unique applications and their completion process, language and currency support, and is subject to domestic rules and regulations.
Video Alternative payments
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The most common alternative payment methods are debit cards, charge cards, prepaid cards, direct debit, bank transfer, phone and mobile payments, checks, money orders and cash payments.
A debit card (also known as a bank card or check card) is a plastic card that provides an alternative payment method for cash when making a purchase. A charge card is a plastic card that provides an alternative to cash when making a purchase where the issuer and the cardholder enter into an agreement that the debts incurred on the billing account will be paid in full and on the due date. Debit cards and bills are used and accepted in many countries and can be used at sales or online locations.
Prepaid or saved value cards provide payments through the monetary value stored on the actual card or deposit in the account. One major difference between stored value cards and prepaid cards is that prepaid cards are usually issued on behalf of each account holder, while a stored value card is usually anonymous. In the United States, prepaid cards and stored value can usually be processed on the credit card network, but this does not apply to all cards, especially outside the United States.
Direct debit or direct withdrawal is an instruction given by a bank account holder to his bank to collect direct amounts from other accounts. This is similar to a direct deposit but is initiated by the recipient. Direct debit is available in some countries including England, Germany, Austria, and the Netherlands. It is scheduled to be available throughout the Single European Payment Area by the end of 2010. In the United States, where checks are more popular than bank transfers, similar services are available through the Automatic Clearing House network.
Bank transfer (also known as wire transfer or credit transfer) is a method of transferring money from one person or institution (entity) to another person. Wire transfers can be made from one bank account to another bank account or by cash transfer at the cash office. Interbank transfers are often the wisest method to transfer funds between bank accounts. Transfer messages sent via secure systems (such as SWIFT or Fedwire) use IBAN and BIC codes. The online bank transfer system in Europe is a popular alternative payment method, where bank transfers are authorized by the consumers who go to their bank's website and authorize the transfer of funds for payment to the merchant.
A demand deposit is a bank transfer payment, in which the order is given by the payer to his bank, which transfers the funds to the payee's bank account; the receiving bank then notifies the payee. Demand deposits are often used by the post office as well. The term is slightly used in the United States, although ACH Transfer or direct deposit is a US electronic version of a giro transfer.
Online Banking Payments (OBeP) are similar to giro transfers, but are designed specifically for use with online trading. With OBeP, during the online proofing process, merchants divert consumers to online banking sites of their financial institutions where they enter and authorize fees. Once the fee is approved, the financial institution diverts the consumer back to the merchant's site. With some services, such as Trustly, merchants can embed an iframe on their site so consumers do not have to leave the page to make payments. All network communications are protected using industry-standard encryption. In addition, communication with OBeP networks occurs on virtual private networks, not over the public Internet. The OBeP system protects consumers' personal information by not requiring disclosure of account numbers or other sensitive personal data to online merchants or other third parties.
Electronic bill payment is an online banking feature, similar in effect to bank transfers, allowing depositors to remit money from their demand accounts to creditors or vendors such as public utilities or department stores to be credited against a particular account. Payments are made electronically in real-time in real-time, although some financial institutions or payment services will wait until the next business day to remit payment. Banks can also usually generate and send paper checks or banker drafts to creditors who are not set up to receive electronic payments.
With phone payments, consumers will be billed via their regular phone number, where charges are added to their phone bill. A premium phone number or a 900 number is a phone number for a phone call in which a particular service is provided, and for a higher price than usual charged.
Mobile payments are a new alternative method of payment and are quickly adopted - especially in Asia and Europe. Instead of paying with cash, checks or credit cards, consumers can use mobile phones to pay for various services and goods. The charge was then added to their phone bill.
Checks or checks are negotiable instruments instructing a financial institution to pay a certain amount of a particular currency from a particular demand account that is kept in the name of the depositor/depositor with the agency. The manufacturer and the payee may be an individual or a legal entity.
Electronic checks are often referred to as ACH payments in the US.
Maps Alternative payments
Usage
Alternative Payment Amounts have grown exponentially in the last few years due to the need for billing solutions on the Internet. Limited credit card penetration and local local payment habits, combined with tight credit and security concerns for using credit cards for online payments have increased the use of Alternative Payments at the world level.
Alternate payments are offered by domestic banks and payment processors offering trader billing solutions. Most Alternative Payouts have online apps and are integrated into electronic shopping carts used by online merchants.
Some billing solutions have been designed specifically for web-based merchants to receive alternative payments online and to support and access distant markets. Alternative payments are used throughout North America, Europe and Asia, and have a penetration rate of sixty percent or more in different countries. Language, currency and support, including trust and familiarity, often contribute to the success of alternative domestic payment solutions.
Debit cards and charge cards are accepted worldwide as an alternative payment and in some cases, debit cards are designed specifically for use on the Internet, and no physical cards are just virtual cards. Certain systems also require the use of PINs when debits are used for online purchases.
Europe online direct debit solutions are very popular because of lower credit card usage in Europe compared to other countries such as the United States. Transactions can be approved in real-time and funds within 1 to 3 business days. Deny pay remains an inherent risk when debiting a consumer bank account, however, using an additional verification system reduces the risk significantly and many payment processors maintain an extensive fraud database that reduces risk.
Using bank transfers to receive payments does not carry an inherent risk to merchants, which makes it particularly attractive to high- and low-risk traders seeking to reduce chargebacks. The disadvantage of this approach from a merchant's perspective is that re-billing can not be done automatically and billing does not happen quickly, because their customers have to manually transfer funds.
Electronic checks allow funds to be withdrawn directly from consumer accounts. Repeat payments can be set and consumer personal information can be verified instantly. Merchants who choose to receive electronic checks enjoy a convenient process that reaches a large number of consumers who do not have a credit card or do not want to use a credit card to make payments. Electronic checks are known to have a long clearing time of up to five business days and carry the risk inherent in the cost-back. Verified checks can be returned after clearing time as "insufficient funds", which means that consumers do not have enough funds in their account to pay the transaction balance.
Phone payments describe systems that allow consumers to buy products or services using their phone numbers. In most cases, bills are verified by phone or SMS message before the transaction is approved. The resulting cost 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 payments, especially online, where the risk of fraud increases. While convenient to consumers, the phone bill has some problems attached to the merchant. Payment processors who support telephone bills typically charge higher rates because the payment must go through an additional party, the phone provider, before reaching out to the merchant. The clearing time of funds is also very high as funds are not collected until consumers pay their phone bills.
Merchant profits
Alternative payments are increasingly becoming more popular among merchants, as more options mean more sales, and since almost all Alternative Payments offer a variety of service-specific features that address the global online marketplace. Geolocation software, automatic language translation, instant currency exchange and global support are generally included to enable foreign buyers to use their domestic payment solutions, while shopping outside their country in foreign-based web merchants.
Unlike traditional credit card transactions, many alternative payments often provide additional security features that protect merchants from fraudulent and returned transactions, as fund availability is verified and payments are made directly from a bank account. Banks guarantee funds and since there is no chargeback, traders are often not required to provide collateral or keep a deposit. Furthermore, the accounts are validated in real-time and fraudulent modules rub the transaction, similar to the credit card approval process.
Consumer advantages
Alternative payments have, in many areas, become the dominant form of online payments to consumers. Alternative payments give consumers more options to pay and allow them to choose a convenient payment method for them. Languages, domestic apps and familiarity with payment methods, coupled with the trust they place in their own bank, increase usage. In addition, consumers can only choose to use alternative payment methods due to security issues with credit card purchases. Many alternative payments often require additional security measures, such as usernames, passwords or personal identification numbers (PIN) to better protect consumers.
See also
- Comparison of payment system
References
Source of the article : Wikipedia
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