Overview of Online Payment TypesThe online payment types which can be accepted are continually growing in numberand generally mirror offline types of payment. The main online payment typesorientate around card payments and direct debit payments which are outlined below:ONLINE DEBIT CARD PAYMENTSDebit card payments can be accepted online and used for real-time, card schemepermitting, subscription and recurring billing. Debit cards are typically linked directlyto the cardholders bank account and payments are authorised only if the funds areactually available or if your card issuer is happy to provide you with an overdraft(unlike credit cards - see below).Debit card payments online typically require authentication using the 3D Secureauthentication process, although this depends on the implementation being supportedby the card issuer.The primary debit card brands used in the UK are Visa and Maestro (being replacedby MasterCard Debit).ONLINE CREDIT CARD PAYMENTSCredit card payments can be accepted online in the same way as debit cards, i.e. inreal-time, and these typically can be used for subscription and recurring billingwithout any restrictions. Credit cards are a form of borrowing where the card issuer isin effect allowing their cardholder to "borrow" money in line with a credit agreement(in the UK these need to be licensed by the Office of Fair Trading (OFT) under TheConsumer Credit Act 1974). Therefore, the amount of funds available isnt linked tothe customers bank account but based on their agreed credit limit and how much ofthis is available to spend.Credit card payments online typically require authentication using the 3D Secureauthentication process, although this depends on the implementation being supportedby the card issuer.The primary credit card brands used in the UK are Visa and MasterCard.ONLINE CHARGE CARD PAYMENTSTypically charge card payments are treated in a similar way to credit card payments
but typically transactions are processed directly through the card issuer.The principal charge card brand used in the UK is American Express.PAYPAL PAYMENTSPayPal is becoming increasingly popular, especially for lower value transactions, andis seeing significant growth in its user base and market share of transactions. WPMEducation has a partnership with PayPal to provide education clients with preferentialrates for PayPal transactions.ONLINE DIRECT DEBITS (ALSO KNOWN AS PAPERLESS DIRECTDEBITS)Direct Debits are historically popular in sectors where there is a requirement forlonger term billing or, in the education sector, where larger values (e.g. fees) are paidover agreed instalments.Paperless Direct Debits can be set up by a payer online and payments are thencollected through the BACS system (unfortunately not in real-time as they fall withinthis traditional BACS processing process).OTHER ONLINE PAYMENT TYPESThere are other online payment types, albeit these typically have a very small marketshare and generally are a better fit for niche applications (e.g. mobile billing).