Online payment transactions are indeed increasingly prevalent in this digital era. Apart from being easy and practical, online payments are also relatively safe, so it is not surprising that they are more in demand by various groups.
Moreover, there are quite a number of online payment methods that you can choose as you wish.
Technological developments have played a major role in the increasing popularity of online payments. For online-based businesses, apart from using online shop business applications to support your online business operations, offering digital payment method options is also very important.
Because this is the easiest way to make buying and selling transactions.
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Types of Online Payment Methods
Online payment systems consist of 2 types, namely cash and non-cash payment systems. For non-cash, there are several safe and convenient online payment methods that are commonly used in Indonesia, including the following:
1. Transfer Bank
The first online payment that is most often used is bank transfer. What’s more, this method can be applied in many ways. Starting from the most manual by utilizing an ATM machine, or internet banking and mobile banking only with a smartphone device.
Basically, bank transfer is an old method that is still in demand today. Not without reason, considering that this method is also practical, safe, and of course easy to do.
Below are the advantages and disadvantages of online payment via bank transfer:
The advantages of the Bank Transfer Payment Method:
- It is most widely implemented in online buying and selling platforms, such as e-commerce.
- Everyone can do it, even if they don’t have a bank account.
- Various transfer options are available, starting from ATM machines or SMS banking and i-banking.
Disadvantages of Bank Transfer Payment Methods:
- The transfer process is quite long and requires accuracy.
- Both the buyer and the seller must honestly provide confirmation.
- Often there is a misunderstanding between the two parties (seller and customer).
- Requires additional administrative fees for transfers to other banks.
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2. E-wallet
The payment method via e-wallet or digital wallet is of course very familiar to business people and buying and selling online. In fact, several e-commerce platforms and offline shops have also provided payment systems via digital wallets as a means of transaction.
Even so, online payments via e-wallets still have some limitations, especially because they can only be made at certain merchants who have collaborated with a digital wallet provider company. However, it seems that e-wallets have bright prospects.
Following are the advantages and disadvantages of transacting with digital wallets:
The advantages of the e-wallet Payment Method:
- Payment transactions are faster because users only need to scan a barcode to make payments.
- Minimizing the circulation of counterfeit money because security technology in digital wallets is difficult to penetrate.
Disadvantages of e-wallet Payment Methods:
- Administrative fees for each transaction will be charged to the user.
- Merchants who accept payments with digital wallets are still limited.
- Potential to increase consumptive lifestyle.
3. Credit Card
Online payments using credit cards can be said to be safe, because credit card issuers have provided them with extra protection, such as Fraud Guard, On-Us Routing, and Dynamics 3DS. In addition, credit cards can also be used for transactions, both at home and abroad.
In this modern era, almost all online and offline stores make credit cards an easy payment option. So it’s not surprising that at this time, credit cards seem to have become a necessity, especially for millennials.
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What are the advantages and disadvantages of using a credit card? Here’s the answer:
Advantages of Credit Card Payment Methods
- Allows users to buy or pay for something in installments.
- Several credit card issuers provide rewards in the form of points after each transaction is completed.
- Guaranteed security.
- Can be used as a means to build a track record.
Disadvantages of Credit Card Payment Methods
- Many additional fees, such as an annual interest percentage.
- The credit score determines whether the loan application is accepted.
- Has the potential to make users addicted to debt.
4. Joint Account (Rekber)
Transactions using a joint account are considered safer by many parties. Because the purpose of using this online payment method is to protect sellers and buyers. Rekber is increasingly being used along with the rise of online buying and selling transactions.
The way joint accounts work is by involving a third party whose job is to hold transaction funds until the buying and selling activities are completed. In other words, the buyer has received the ordered goods intact. After the buyer confirms, then the funds are forwarded to the seller. Get to know what are the advantages and disadvantages of Rekber.
Advantages of Using a Joint Account
- High security level.
- Serving different bank payments.
- It has been implemented in various online buying and selling forums.
Disadvantages of Using a Joint Account
- Requires a longer transaction process.
- Joint account providers are still limited.
5. PayPal
For those who frequently shop online on global marketplace platforms or work for clients from other countries, of course you are very familiar with the term PayPal, right? PayPal is a virtual account that supports transfer services and online payment transactions.
This popular digital payment vehicle allows users to create an account on the PayPal platform that is linked to a customer’s checking account or credit card. One of PayPal’s advantages is that it has a strong network and serves financial transactions in a global scope.
In other words, PayPal account holders can make overseas online shopping or cross-border transactions. In addition, this digital payment service is also equipped with a fairly good security system, so it is only natural that it is the choice of online transactions by many parties.
PayPal advantages
- It has been used by more than 100 countries around the world.
- High security system.
- Practical and time-saving.
- There are many funding source options available.
- Consumer protection.
- Free monthly rates or administration fees.
- Easier global transactions.
Disadvantages of PayPal
- Prone to hacking because it is digital based.
- Limited access.
- Regulations are strict, so users need to read the provisions carefully.
- Access will be blocked if the IP Address is different.
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6. Cardless Credit
The term cardless credit is also known as PayLater. In other words, buy now pay later. So, users of this digital service can make transactions or shop online in installments (credit). The transaction will be processed after the user verifies.
In general, credit without a card is easier and more practical than transactions with a credit card. Users only need to enter the PIN according to what has been registered in the application. In today’s digital era, installments without a credit card can be a way to meet financial needs during an emergency.
So, if a user needs a certain product but doesn’t happen to have enough budget to buy it, then they can choose transactions with credit without a card. However, the amount that can be used is generally not that big.
7. Cash Retail
The next online payment method is cash retail. This term refers to payments made using cash at retail stores, such as convenience stores and supermarkets. However, retail stores also usually accept non-cash payments by card and e-wallet.
Excess Cash Retail Payments
- Transactions are faster and more practical.
- No problem regarding money back.
- Shopping does not need to carry cash.
Disadvantages of Cash Retail Payments
- The risk of online payment accounts being hacked.
- Requires smooth internet access.
- There is a minimum shopping amount.
8. Direct Debit
Direct debit is an electronic payment method that allows banks from direct debit users to withdraw funds in a certain amount automatically. When the customer transacts, the bank will withdraw the balance from the account registered by the user.
Following are the advantages of direct debit, including:
- Ease and security in conducting online transactions.
- Reducing the transaction budget.
- There are various attractive discounts available.
- The payment transaction process is much more practical.
9. QR Code
The payment method with the QR Code is also increasingly recognized today because it is considered more practical. According to the Financial Services Authority or OJK, the QR Code is a two-dimensional matrix code, which was created to enable digital cameras to read information from the code printed on it.
To make online payments with a QR Code, you only need a smartphone and an internet connection. Meanwhile, sources of funds for QR Code transactions include deposits or other payment instruments, in the form of credit cards, debit cards or e-money.
So, what are the advantages and disadvantages of paying with a QR Code, here’s an explanation:
Advantages of the QR Code Payment Method
- Shopping activities become more practical because it does not require a card and cash.
- Only with a smartphone capital, anyone can shop for the products they need.
- It’s easy to use, because now you don’t have to bother looking for an ATM machine when you don’t have cash. Users only need to open e-wallet applications and the like.
- Save time so as to make payment transactions faster. In this case, both parties, both sellers and buyers will feel benefited.
- More responsive because it has been equipped with a good translation system. In fact, even though the QR Code is physically damaged, smartphones can still read it with the error correction feature.
- From a financial perspective, paying with a QR Code is also more economical because you don’t need to worry about change, especially in small amounts or small change.
- Considering that online payment by QR Code is still not very familiar in Indonesia, the use of this payment method offers many attractive discounts. Users can use it to save expenses when shopping.
- Currently, QR Code is still dominated by large shops and retail, but it has very good prospects for reaching lower-class traders in the future.
Disadvantages of the QR Code Payment Method
- Payment transactions via QR Code are very dependent on internet connection. When there is an internet interruption, automatic payment transactions will not be able to be carried out.
- Although claimed to have a high level of security. However, it cannot be denied that there are still opportunities for scams to occur which result in data theft from accounts.
- Vulnerable to exploit, especially if someone else knows the security PIN.
- Ordinary users generally cannot distinguish between genuine and fake QR Codes.
- Not all merchants provide payment services with QR Codes.
10. Mobile Banking
Mobile banking or what is often called m-banking is very popular among the public. M-banking makes it easy for customers to make transactions without having to come to a bank branch office. Only using a cell phone and internet access, you can enjoy this service.
Generally, m-banking transactions include bank transfers, account mutation information, and other payment transactions.