The term payment processing generally refers to the transmission of a certain amount from the purchaser or subscriber to the beneficiary.
What does payment processing mean?
The term payment processing generally refers to the transfer of a sum of money from the buyer to the beneficiary – such as the supplier of goods or (recurring) services. It is a component of payment transactions. There are companies that offer a service where payment processing is the tool to help sellers optimize their business and simplify transactions for both buyers and sellers.
As a seller, all the necessary information about sales and payments can be accessed and statistics, fees, security measures and help features can be accessed. The buyer, on the other hand, has many payment options at his disposal, while the merchant receives the money directly in his company account. In the online market, especially in the subscription business, payment processing must be satisfactory, fast, and secure so that the transaction can be handled smoothly and in terms of an excellent customer experience.
Payment experience: 3 payment options
There are basically three types of payment methods:
- Cash payment, at the time of purchase – this way is hardly used in online marketplaces because it usually requires the presence of the buyer and the seller for the exchange of the amount of money to be processed; this is a more common process in brick-and-mortar stores;
- Semi-payable payment, depositing the money in the account of the product or service provider – this way is also little used in the online market because there is no guarantee that the buyer will use his bank account to complete the transaction;
- Cashless payment, by direct bank transfer or debit – this is the most commonly used method for the digital market, as transactions can be carried out automatically and without cash.
In order for payment processing to be efficient for both the seller and the buyer, a high level of security and convenience is necessary. The website of the provider of products and services must follow the necessary security measures for each country and be aware of the payment processes that their customers prefer to make their purchases. For this, there are companies on the market that facilitate payment processing (called payment providers or payment service providers), that allow integration, better prices and different payment methods, and that already have a large portfolio of companies that can become partners.
Online payment methods
Currently, there are three different ways for customers to make online purchases: first, via web on their network-connected devices; second, via cell phone applications; and third, via recurring payment option in the subscription business. The shorter and lower-threshold the path the prospect has to travel in the online payment process to make their investment, the more likely and easier it will be for them to make the purchase. Companies that offer various and secure payment options where one can get to the destination without any detours are usually preferred by online shoppers, whether they are individuals or businesses.
Meanwhile, companies that offer subscriptions must ensure that the buyer’s data is constantly the most up-to-date. This way, there can be no failure and thus no return of money or cancellation of the purchase process.
Conclusion: Payment processing should be secure and without high hurdles for the interested party
Reliable and successful payment processing is very important for all businesses as it ensures capital growth. For this to happen efficiently, it is necessary that the customer experience is always considered. Especially in the online market, it is necessary that security and convenience are constantly considered so that the positive payment flow is exponential. Enabling a system that prevents glitches and offers multiple payment methods can keep customers coming back for more purchases.
In the subscription business, it is also very important that payment processing is constantly updated so that abandonments are prevented and the payment process leaves the customer with a positive payment experience. So-called payment service providers help companies implement payment processing satisfactorily for all parties involved in the business process. The goal: secure, convenient and reliable payment processing, resulting in an excellent customer and merchant experience.