Payment methods

Credit cards

This is the most common payment method. Use of information is regulated by the Payment Card Industry Data Security Standard, PCI DSS, which states that credit card information can only be processed by PCI DSS compliant organisations.

In practice this usually means that the vendor is not authorised to process credit card information, so Litium will redirect the end-user to the payment provider site, and the payment provider will collect the credit card information.

The type of credit card, whether its MasterCard or Visa or any other card, is determined by the payment provider, and governed by the agreement between the payment provider and the merchant.

Invoicing

An invoice with the order details is printed and sent to the end customer for payment. The payment provider acts as a "debt collector", and usually makes sure that end-user pays the amount to the merchant's bank account, or to a special account hosted by the payment provider.

In most cases, when the end customer buys a product and checks out on the site, an invoice is created in "passive" (or "inactive") mode. Then, the merchant ships the products to the end customer with the invoice, (sometimes the invoice is printed and sent via mail by the payment provider). When the invoice is sent to the end customer, it becomes "active", and the end customer has to pay within the agreed payment term.

The merchant does not need to worry whether the end customer pays the invoice in time or not, since the credit risk is usually taken by the payment provider.

The actual time the merchant will receive money for the products sold depends on the agreement between the merchant and the payment provider.

Debit cards

This method is very similar to the credit card method, except that the end customer is using a debit card, which means that there has to be money in the customer's account connected to the card. Since this does not involve a credit arrangement, it usually costs less. (Not all payment providers transfer the cost advantage to the merchants.)

Bank direct payments

The payment provider will redirect the end customer to the website of the bank, so that the customer can use a bank account to make a direct bank payment. The end customer needs to login to the bank account and complete the transaction.

Part payments

Part payments is not a sperate payment method as such, but they have some special characteristics explained here.

Part payment means the end customer pays the total transaction amount in parts, usually spread across three months, six months or twelve months. The amount paid by the end customer every time is only a fixed part of the total amount.

The merchant usually receives the total amount immediately. The credit risk of spreading the payment over several months is borne by the payment provider, and they usually collect a fee for the service. The fee can be added directly to the order. In some cases the fee is borne by the merchant, so that for the end customer, the transaction will look like a "zero percent credit".

Most payment providers do not allow part payments for all their payment methods, but it is usually allowed for the invoice payment method. To enable part payments, the merchant needs to make a seperate agreement with the payment provider.