Different Types Of Online Payment Methods

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Different Types of Online Payment Methods

1. Smart Cards

A smart card is similar to a magnetic stripe card but contains a microprocessor chip.The first smart cards were prepaid telephone cards, which operated on stored prepaid values.They have moved on from this to be used for things such as library card, credit cards,student cards, and electronic purses.

2. Contact Cards

With a contact smart card, the user inserts it into a reader in order to access the information on it. The data is then transferred once physical contact is made. The reader supplies power to the chip in the card through the contacts. These cards are used in financial applications such as store-value debit, and credit cards because of their reliability and the high power available to the microchip processor. Contact cards are slower and require more servicing than contactless cards.

3. Contactless Cards

Contactless cards communicate with the card reader using radio frequency technology. They are implanted with a radio antenna. No physical contact is required with the reader.Contactless smart cards are suitable for application in fast paced transaction. Proximity, close-coupled, and vicinity cards are sub-types of contactless cards. Vicinity cards are used in industrial tagging, car-park access, and library book tagging. Contactless cards cannot support encryption techniques and are expensive to manufacture.

4. Hybrid or Combi Cards

Hybrid or combi cards combine elements of contact and contactless cards. This is done in there different ways. Firstly, there is a hybrid card that has tow chips.Each chip has either a contact or contactless interface. This method offers high security but is expensive to produce. The combi card has one chip, but with a contact and contactless interface. The combi card is cheaper than the hybrid card. There is a third type that uses an RF sleeve with an inbuilt antenna. This enables the card to contact the reader, thus making a contact card into a contactless one. This card type has low security.

5. eChecks

Definition. An eCheck is an electronic representation of paper check. An echeck uses public key cryptographic signatures and secure massaging over the Internet to make payments and perform other financial functions. They function using the same mechanisms as paper checks, but in an electronic format.

eCheck transaction takes place in the following way:

• the payer “writes” the eCheck and “gives” the eCheck to the payee electronically

• the payee “deposits” the eCheck, receives credit, and the payee’s bank “clears” theeCheck to the paying bank.

•the paying bank validates the eCheck and then “charges” the check writer’s
account for the check

6. Mobile Payments

Definition. A mobile payment is where two parties exchange financial value by means of a mobile device in return for goods or services. Mobile technologies include 2.5 and 3G data networks, and the Bluetooth, infrared, and radio frequency identification (REID) wireless protocols. All mobile payments should be secure. Interoperable, and easy to use.

Examples of where mobile purchases could be used effectively are:

• Mobile top-ups
• online shopping
• road-tolls
• fast-food drive-through
• service stations
• images or games

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