Electronic Payment System

Working of Electronic Payment System 

People and electronic technology collaborate to transport payment information through a logical sequence of processes in real-time - frequently in a matter of seconds.

• Let's use the purchase of a book to illustrate these phases. You'll be prompted to input your credit card information, including the expiration date, three-digit card verification value code, and address, when you order the book on the vendor's website using your credit card.
   
• A payment gateway is activated after you click the submit button. Its primary function is to accept or reject payment requests.
   
• The gateway connects your credit card bank account to a website or smartphone.
   
• It verifies the payment information's correctness and employs encryption and security methods.
   
• Your purchase request is forwarded to your employer's credit card company by the payment gateway. This firm then checks to see if there's enough money in your credit card account to cover the cost of the book
   
• If this is the case, the money is sent to the seller by the gateway.

Advantages and Disadvantages of Electronic Payment System

Advantages

1. Payments are faster and more accurate
   You may initiate and finish an utterly electronic payment transaction (or less). Sending a paper check in the mail and completing a transaction, on the other hand, takes several days.
    
2. Cost Savings
   Processing expenses are reduced with electronic payment systems. They save money since they don't have to pay for paper checks, stamps, or mailing.
    
3. More secure and convenient
   We learned the value of firms having the flexibility to make electronic payments during the epidemic last year since so many of their employees began working remotely.
   Workers don't have to endanger their health by coming to business offices to touch and process checks when paid electronically.
    
4. Access to data and reporting improvements
   When companies make payments on paper, they typically waste much time (and money) looking for invoices and purchase orders. With documents strewn about, finding and organizing them and locating the necessary data to make payments can take hours or even days.
   These issues are avoided with electronic payment methods. Financial professionals can readily and rapidly access payment data and reports since they are stored digitally in the cloud. It's also speedier, with approvals and money moving at a faster pace.

Disadvantages

1. Service Charges
   When utilizing e-payment systems, we are frequently charged service fees or convenience fees, which add to our costs.
    
2. Theft Threat
   Many situations have occurred in which cybercriminals have deceived individuals and stolen money.
    
3. Technical Issues
   Because it is an online service, it may fall due to technical faults, causing problems for customers who rely on it 100 percent for their payments.
    
4. Remote Locations
   Cash is still used in remote locations. While traveling to some rural places, you may find it difficult to make payments on the go.
   Refer to know about : Lifi technology

FAQs 

1. Write Some examples of applications that support UPI?
   Mobile Applications that Support UPI are Paytm, PhonePe, GooglePay, BharatPay, etc. 
    
2. If the UPI Payment is failed, are Mobile Applications responsible for that?  
   No Mobile Applications are just the gateway to execute the transactions. If the transactions fail, mobile applications are not responsible for that; the user needs to contact its bank for failed transactions. 
    
3. What's the difference between eChecks and credit card payments?
   eCheck processing differs from credit card processing in a few ways. The most significant distinction is that eCheck transfers payments over ACH rather than through card networks, resulting in cheaper processing fees. Acceptance of eChecks is free of credit card interchange fees, and rates can be as low as ten cents per transaction. Businesses that take large or recurrent payments may see a significant change as a result of this.

Key Takeaways

In this article, we learned about the Introduction to Electronic Payment System and what are its types along with the working, advantages, and disadvantages of Electronic Payment System. 

I hope you understand the topic properly. 

If you are a beginner, interested in computer fundamentals, and want to learn more about computer networks, you can look for our guided path, which is free! 

Thank you for reading. 

Until then, Keep Learning and Keep Coding.