SUMMER UNIVERSITY ON IT IN AGRICULTURE AND RURAL DEVELOPMENT – 2007 DEBRECEN, HUNGARY Payment methods in e-commerce Ádám Péntek 1 1 University of Debrecen Abstract. At the heart of every business lies the need to make and receive payments. Whether it’s a customer purchasing goods/services or a business organization making payments to its suppliers, or a bank account holder transacting with his/her Bank, or a P2P payment transactions. The payment transactions are the key elements of any business. The advent of the Internet has brought consumers and businesses closer by getting them online. The ability to make and receive payments online saves both time and money. Payment systems in tandem with pervasive computing enable payments to be made anytime, anywhere and from any device. Keywords. e-commerce, payment methods, Internet Introduction Internet and e-Commerce ask for new ways of handling payments in the business-to- consumer (B-to-C) market. Several new Internet payment systems have been developed in the past years. Some of them can be distinguished from conventional payment methods (e.g., invoice, COD and credit card) by being additionally applicable to small amounts of money for purchases on the Internet. The first part this paper will show the benefits and the risks of the electronic payment. After that I will introduce the available payment methods in Hungary. Electronic Payments Benefits Electronic payments can benefit our business by extending our customer base; boosting cash flow; reducing costs; enhancing customer service and improving your competitive advantage. Five reasons why Electronic payments improve customer service • Choice – like our competitors, we can offer a wide range of payment options • Convenience – they remove the need for invoices, cheques, cash and BACs • Credit – they may allow purchases that would otherwise be delayed • Concessions – small discounts to encourage online purchases improve the perception of value • Competitive Edge - if we don’t offer the full range of payment options but your competitors do, what does this say about your business? Five reasons why Electronic payments increase profitability • Convenience – removing administrative resources required by invoices, cheques and cash • Immediacy – credit cards enable instant purchasing (without delay) • Improved cash flow – payment at the time of purchase reduces the pressures caused by 30-day invoicing • Growth – open additional payment channels via the phone, mail order and Internet and increase your customer base. More customers mean more revenue. • Competitive advantage – match and beat the services of your competitors and gain the edge 1