Introduction to Banking
Digital Payment is the exchange of money online by using computer networks, the internet, and digitally stored data. Commonly known as e-payment or online payment, this enables accepting and making payments online. It includes a transaction that results in the flow of money from one person to another. This exchange can take place between bank accounts, credit cards, or different payment solutions wallets such as PayTM, PayPal, etc.
The advent of online payment has made life easy for businesses as well as customers. Merchants can now accept payment online and customers can make payments online. The transfer happens over a secured encrypted connection. From purchasing products over e-commerce portals to paying monthly bills, online payment has made the payment system completely hassle-free.
Types of Digital Payments
Online payment or electronic payment refers to any kind of non-cash payment that does not involve a paper cheque. Credit cards, debit cards, automated cheque clearing are all methods of online payment.
Online payment can be used to make the following kinds of payments:
One Time Payment: Online shopping is no more an item of luxury, the convenience factor has made it a habit for many. When people shop online on e-commerce platforms such as Amazon and Flipkart, they make payments using digital payment options such as credit cards, net banking, or e-wallets. This payment is made on a case to case basis and hence referred to as One Time Payment.
Recurring Payment: There are some expenses that people have to incur every month. This includes monthly bills such as the electricity bill or a mobile bill. Earlier, people had to stand in line for hours to pay such bills. Now, they only need to click on a few buttons to complete payment. Customers can make monthly payments either by visiting the service provider’s website or by simply logging into net banking. Banks provide a range of options to customers to pay bills such as linking the bill to net banking for easy payment. This negates the requirement to fill in the details for payment every time customers make payments.
Automatic Payment: To avoid manual intervention every month for recurring payments and to remove chances of missing out on payments, customers can provide an auto-debit instruction to the bank to debit the bill amount from their bank account or their credit card on the bill due date. In such cases, the bill is paid without any manual intervention by the customer.