Fast and reliable payment has become a necessity in today’s world. Consumers demand more convenient methods for transactions, while businesses rely on digital payment technology to remain competitive and profitable. To meet the growing demand, new and innovative payment solutions are frequently being introduced to the market. While the central goal is to facilitate secure and quick transactions, these online payment solutions come in various forms and serve various purposes.
In this piece, we take a look at the major categories of payment solutions, why they are important and how they work:
What are payment solutions?
To begin, let’s gain a good understanding of what payment solutions are.
Payment solutions refer to any electronic equipment or software e.g. debit cards, payment apps, digital wallets, etc., that makes it possible for businesses to receive and process electronic payments from customers. Any business, whether B2B or B2C, that accepts payments needs a payment solution to facilitate such transactions.
Types of Payment Solutions
The payment needs of various businesses vary. An e-commerce business may solely receive payments through its website, while a brick-and-mortar business can accept cash, card payments, bank transfers or mobile payments. As such, payment solutions are designed for various payment types. Your business might require a single payment option or a combination of several payment solutions, depending on your needs.
Here are the types of payment solutions available to businesses:
1. eCommerce Payment Solutions
eCommerce payment solutions are the key component of the online shopping experience. Many businesses from online retailers like Jumia and Konga to subscription companies and utility companies like Dstv and Netflix, receive payments from customers through a payment solution that is built-in or integrated into their websites. This solution is known as a payment gateway.
- Payment gateway
A payment gateway is the online equivalent of a card reader. It provides an interface on the eCommerce website for users to input their card payment information. The payment gateway encrypts the details and securely transfers the data to the various parties involved in the transaction process (customer bank, merchant bank, etc.), and finally notifies the customer whether payment has been approved.
If your business has or is planning to have an online component seeking a reliable payment gateway solution is paramount.
2. POS Payment Solutions
Point-of-sale (POS) refers to the physical location in a brick-and-mortar store where customers pay for their purchases. This is typically at the cashier’s counter. In this case, the payment solutions provided include tabletop debit card machines, contactless payment (QR code), mobile transfer and e-wallets.
Payment cards have been around for many decades now, they are the most popular electronic payment option used for in-person transactions. Businesses require a POS system which includes a card terminal to be able to accept card payments. This POS system reads the customer’s card and passes the data along for processing between the customer’s bank and the merchant’s bank.
- Mobile Payment Solutions
Mobile payment solutions are fast becoming an alternative to card payments. They refer to any payment solution designed to be used on a cellphone or mobile device. They offer more innovative and convenient payment solutions. For example, mobile wallets allow customers to store their card details on their phones and make cardless payments using a mobile app. Mobile payment solutions also include USSD and QR payment options, as well as mobile banking apps.
3. Payment processing
Payment processing is the payment solution integrated into both online and in-store payment technology to make them functional. Payment processing is a communication network that facilitates the series of actions required for an electronic payment to be completed.
The payment processing infrastructure is responsible for transferring the payment information from the in-store payment terminal or online payment gateway to the customer’s bank for authentication. Once approved the payment processor communicates with the merchant’s account to withdraw the funds from the customer’s account. The payment processor then notified the merchant and the customer that the payment was successful.
Holistic Business Payment Solutions With Redtech
If you’re seeking the right payment solutions for your business, Redtech can help you make a solid decision. Redtech offers a variety of payment solutions and products that can empower your business to be innovative and dynamic. We currently serve the top industries in Nigeria, including Financial Services, Education, Government, Healthcare and Retail.
To learn more about our offerings, speak to us today. Visit redtechlimited.com/contact-us/.