E-transaction, e-commerce, e-wallets – all those financial terms could be grouped under one category called electronic. Letter “e” is just the shortening from “electronic”, so basically everything which is done electronically or online. E-transaction hence means a business process where money is transferred electronically from one place into another. It could be through internet banking, ATM, from stock exchange trades or just an invoice completion for some service/goods. Nowadays almost all transactions are classed as electronic transactions. Why is that?
Let’s look at the example of simple e-transaction. You come to the café to buy chai latte and you pay for it by debit or credit card. When you have entered your pin or swiped the card, then you have placed an order for your bank to transfer money to the merchant (café bank account), in return you get chai latte into your cup. In may sound pretty simple, but all e-transactions consist of small sub-transactions, and in one of our article we have described that in detail (electronic credit card processing). In order to process the e-transaction business needs a merchant account, where all personal party data is analysed against the fraud lists and the money itself is transferred from the customer to the merchant account.
In the long chain of e-transaction there could be some issues, for example when customers bank card is not accepted by the payment terminal. That could mean that card issuer doesn’t trust the merchant system or vice-versa. Both parties have their own security systems even though neither customer or business owner see them working. It is very important though to minimize the risks of e-transaction failures, hence if you are a business owner you have to use a reputable merchant account service or any other e-payment solution which is used to accept orders.
At the moment with the introduction of Phone Payments (ApplePay, AndroidPay, etc) there are smaller chances of being at risk of not getting the money, but some shops still prefer to take payments by cash, because then there are no risks of being part of the fraud. When customers pay by cash they can’t use fake credit card, you don’t need to pay transaction fees etc, but then you need somewhere to store cash securely. There are more positive aspects of accepting e-transactions rather than cash, so if you are the business owner who wants to connect payment solutions to accept credit/debit card payment, then please contact our professional managers, who will individually analyse your need and provide the best payment package for your business.
To finish the article, we just want to repeat what is an e-transaction: it is a transaction which is processed electronically (online). Here is a short video of how e-transactions are processed: