An online transaction is also referred to as a PIN-debit transaction. It is a payment method that authorizes transfer of funds over an electronic funds transfer and is protected by a password.
When a customer pays for goods or services using a debit card, he has two options on how payment can be processed. The first option is an offline transaction using a credit card processing network. The second option is an online transaction using an EFT system. Both options require a personal identification number or PIN to complete the process.
Methods of Online Transaction
- Net Banking – This is a system that does not involve the use of physical cards. The customers have accounts that are enabled with Internet banking. The payment gateway allows the customer to specify which bank they wish to pay from. Then he is redirected to the website of his bank where he can authenticate himself and have the payment approved. There will be some form of two-factor authentication that has to be done. It is considered a lot safer than using credit cards.
- Paypal – This is a global e-commerce business that enables payments and money transfers to be done through the Internet. Paypal is an acquirer that performs payment processing for online vendors and other commercial users for a minimal fee. It can also perform payments for services rendered by online freelancers.
- Google Wallet – It has the same function as PayPal to facilitate online money transfers and payments. It features a security that cannot be cracked. It has also the ability to send payments as attachment through emails.
- Mobile Money Wallets – This type of online transaction is accepted all over the world as a form of payment through the existing mobile subscription number of the consumer. Adding funds to the mobile money wallet can easily be done by visiting physical recharge points that is nearest to their homes and offices. They convert their cash to mobile wallet currency that can be used to pay for goods and services.
- Bitcoin – is a payment system where users can transact directly with merchants without any intermediary. Transactions are verified by network nodes that are recorded in a public distributed ledger known as the block chain. The unit of account of the ledger is bitcoin. This system works without need of a central repository or an administrator that is why it is categorized as a decentralized virtual currency. Bitcoin has become popular as a form of payment for products and services.
