6 Most Common Modes of Electronic Payment

Whether you’re a small business owner or a world-renowned corporation, there’s no doubt that you need to have a plan in place for receiving payments electronically. But with so many options on the market, it can be tough to choose the right one for your needs. In this blog post, we’ll run through some of the most common modes of electronic payment so that you can make an informed decision about which one is right for your business.

Credit Cards

One of the most popular—and convenient—methods of payment is by credit card. These days, almost everyone has a credit card that they can use to make purchases both online and in-person. And thanks to advances in technology, it’s now possible to process credit card payments without even having to swiped the physical card. All you need is the card number, expiration date, and security code.

However, there are some drawbacks to using credit cards as a mode of payment. For one, there’s always the risk of fraud. In addition, credit card companies typically charge businesses a fee (known as a “merchant discount rate”) for each transaction. This fee is generally passed on to the customer in the form of a surcharge. As a result, customers may be less likely to use their credit cards to make purchases from businesses that charge these types of fees.

Debit Cards

Debit cards are similar to credit cards in that they offer businesses a fast and convenient way to receive payments. Unlike credit cards, however, debit cards are linked directly to a bank account. This means that there are no interest fees or other finance charges associated with accepting debit card payments. Debit card processors typically charge a flat fee per transaction, as well as a monthly fee. Debit cards are a good choice for businesses that want to avoid the high fees associated with credit card processing but still offer their customers a fast and convenient payment option.

ACH Payments

Another common method of electronic payment is via ACH transactions. ACH stands for “Automated Clearing House,” and refers to a network of financial institutions that process electronic transactions. ACH payments are typically used for recurring payments, such as utility bills or gym memberships. They can also be used for one-time payments, such as paying an invoice from a vendor.

One of the benefits of using ACH payments is that they can be processed quickly—usually within one or two business days. In addition, there are generally no fees associated with ACH payments (at least for the payer). However, one potential drawback is that ACH payments require the payer to provide their bank routing number and account number, which some people may be reluctant to do.

eCheck/Online Check Payments

Another option for businesses looking to receive electronic payments is via eCheck or online check payments. This method allows customers to enter their checking account information (routing number and account number) in order to make a payment directly from their bank account. Like ACH payments, eCheck/online check payments are typically processed quickly (within one or two business days) and usually have few (if any) associated fees.

The main downside of eCheck/online check payments is that they require customers to input sensitive financial information into a website or form. As such, there’s always a risk that this information could be compromised by malicious actors. In addition, if an eCheck payment is returned due to insufficient funds, the payee may be charged a return fee by their bank.

Cryptocurrency Payments

Cryptocurrencies—such as Bitcoin, Ethereum, and Litecoin—are another option for businesses looking to receive electronic payments. Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Cryptocurrencies are decentralized, meaning they’re not subject to government regulation like traditional currencies; instead, they’re regulated by cryptographic algorithms.

Because cryptocurrencies are not regulated by governments or financial institutions, they offer certain advantages over other modes of payment; namely, anonymity and lower transaction fees. However, cryptocurrencies are also volatile and tend to fluctuate rapidly in value. As such, they may not be suitable for businesses whose income relies heavily on cryptocurrency payments.

Apple Pay/Google Pay

Mobile wallet apps like Apple Pay and Google Pay allow customers to store their credit and debit card information on their phones and use it to make contactless payments at participating retailers. Mobile wallet apps are becoming increasingly popular, as they offer customers a fast and convenient way to pay without having to carry cash or cards with them. For businesses, there are typically no additional fees associated with accepting mobile wallet payments – you simply pay your regular credit or debit card processing fees. Mobile wallet payments are a great option for businesses that want to offer their customers the latest in convenience and security.


When it comes time to decide on a method of electronic payment for your business, there are many factors you need to take into consideration; including fees charged per transaction, processing times, and security risks. We hope this overview has given you a better understanding of some of the most common modes of electronic payment so that you can make an informed decision about which one is right for your needs.

At Global Legal Law Firm, our lawyers have decades of expertise in ISOs, processors, commercial collections, credit card brands, and other forms of electronic payment processing litigation. Our attorneys have experience handling a number of cases involving ISOs, processors, commercial collections, credit card brands, and more.  Let us guide you through this new and volatile legal environment, rather than attempting to navigate it on your own.

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