07/03/2023
Digital payment refers to any payment made through electronic means, such as the Internet, mobile devices, or other digital channels to eliminate the need for physical cash.
The common forms of digital payment:
Mobile payments — Using a mobile device such as a smartphone or tablet to transfer funds to another party.
Online payments — Through a website or other online platform using a credit card, debit card, or other electronic payment.
Peer-to-Peer (P2P) payments — Directly between 2 individuals using a mobile device or other digital platforms.
Contactless payments — Tapping or waving a contactless card or mobile device near a point-of-sale terminal.
The Common Forms of Electronic Payment
Online Payment — Payment is made over the internet, through a website. It involves using payment card information, such as credit or debit card details, in a payment gateway or payment processor.
Phone Payment — The payment is made using a mobile device such digital wallet app, or scanning a QR code.
Mobile Payment — Payment is made using digital wallet apps such as Apple Pay or Google Wallet and through mobile bank apps (electronic fund transfer).
Cable Network Payment — The payment is made over cable or television networks. It involves using payment information through a set-top box or remote control. In this type of payment system, merchants use cable networks to connect their point-of-sale (POS) terminals to payment processors or acquirers, which then transmit the payment information to the card issuer for authorization and settlement. For example, TV-based e-commerce platforms or payment transactions in retail environments.
Financial Private Network Payment — The payment is made securely using a private network. The FPNP networks are operated by financial institutions or by a third-party provider and are subject to strict security and regulatory requirements.
Digital wallet — Typically, the user’s payment card is linked to the e-wallet. It can store loyalty cards, coupons, and other types of digital credentials, making them a convenient all-in-one solution for digital payments. The payment is made through digital wallets by scanning a QR code or using a phone number.
Peer-to-peer payment — Payment is made directly between individuals without the need for an intermediary like a bank or payment processor. It charges low fees or no fees at all. P2P payment can be done using a mobile payment app like Venmo or PayPal.
Contactless Payment — Payment is made by tapping a contactless-enabled card or mobile device on a point-of-sale (POS) terminal without having to physically insert or swipe their payment card. It uses near-field communication (NFC) technology to communicate between the POS terminal and the payment device.
Electronic Check Payment — It is a type of digital payment that allows individuals or businesses to send and receive money electronically from their bank account. The electronic check payment can be initiated provided that the recipient’s name, account number, and bank routing number are validated.
The recipient’s bank processes the payment and deposits the funds into their account. It typically takes between 2–3 business days to clear.
Digital Currency Payment — Payment is made using virtual currencies such as Bitcoin, Ethereum, and others. Virtual currencies exist only in digital form and use cryptography to secure transactions.
Biometric Payment — Payment is made using biometric technology. Each person has unique physical characteristics such as fingerprint, facial recognition, voice recognition, or iris recognition to authorize a payment. So, it removes the need for a physical payment card or entering a PIN. For example, Apple Pay’s Face ID/Touch ID or Samsung Pay’s iris Scanning technology authorizes a transaction.
