Offline and Online Payment Methods

Offline Payment Methods

Offline payment indicates that funds are transferred at a later date. Offline methods don’t charge customers instantaneously. Instead, offline payments are meant to store the customer information for processing manually. There is high reliance on cash when carrying out business, which is why Cash on Delivery Option is popular when it comes to Indian markets. Buyers consider it fit to get the product first then pay for it. Offline payments permit merchants to track payments effected by cash against delivery, cheque, DD/PO/BC, Direct cash Deposit and physical gift coupons.

* Cash on Delivery (COD) is facilitated by many companies namely India Post, FedEx, Amazon, Flipkart, Myntra, BigBasket etc.

* Demand Draft/Pay Order/Banker’s Cheque generally guaranteed methods of offline payments where Banker agrees to pay on demand or when instrument is presented.

* Issuance of Cheque from Bank Account does not guarantee the payment to seller till the time cheque gets cleared from the buyer’s account.

* Direct Cash Deposit is another offline method of payment when permissible amount of cash is directly deposited into seller’s bank account.

* Gift Coupons are issued by manufacturers of consumer goods or by retailers when that can be redeemed for a financial discount or rebate when purchasing a product.

* Sodexo as a company give out restaurant vouchers, meal passes, buying grocery and training voucher in the form of coupons to various Companies, Institutions and Government Authorities, which are then delivered to its employees for consumption.

Online Payment Methods

India has multiple payments and settlement systems, both gross and net settlement systems. For Gross Settlement India has Real Time Gross Settlement (RTGS) system called by the same name and net settlement systems include Electronic Clearing Service (ECS Credit), Electronic Clearing Service (ECS Debit), Cards, National Electronic Funds Transfer (NEFT) system, Immediate Payment Service (IMPS) & Unified Payments Interface (UPI) etc.

* Credit Cards – Master, VISA, AMEX, Diners & JCB Cards are widely accepted wherever Point of Sale (PoS) facility is available. AMEX perhaps require a separate software.

* Debit Cards – VISA, Maestro & RuPay cards have gained popularity when these cards are issued when savings account is opened. RuPay is a card launched by NPCI where settlement also takes place in India, thereby preventing FOREX outgo of precious commission earned.

* Net-banking is used for online transfer of funds from one Bank account to another of individuals, Institutions or Corporates.

* Cash Cards – ITZ Cash, Prepaid/Gift Cards, Done Cash & Oxi Cash are prepaid cards where funds are already loaded, which could be utilised for making online payment.

* Mobile Banking is a convenient way of making online payment from a place wherever mobile network is available.

* Phone Payment – CCAvenue Phone Payment could be made at a call centre where a customer can call to purchase goods and services. This is an Interactive Voice Response (IVR) system that enables enterprise to collect payments securely over the phone through an automated voice prompt driven process with no equipment, hosting, programming or recurring maintenance costs.

Keep watching this space for more updates on Payments and Settlements!