These payments mainly come from retail customers and wholesale customers. In traditional business these payments would be received in cash or cheque and physically deposited in the merchant's bank. However, 1970s technology made it possible for these funds to be transferred electronically from one account to another (in the same bank) and later, from one bank to another. Using PCs and modems, businesses could directly access bank systems and transfer funds through electronic funds transfer (EFT) and could also use computer technology to handle invoices and payments for goods and services using electronic data interchange (EDI).
By the end of the 70's, systems were in place which allowed payments to be received from customers using direct debit and automatic teller machines. These systems have developed and now allow a wide range of payment options including the most popular - credit card payments.
Initially online payment by credit card was extremely risky for consumers since the personal data was transmitted over the Internet with no great security. However, systems now exist to ensure this data is invisible to other users and is sent only to bona fide businesses. Companies like Cybercash provide software for processing credit card information.
Another system is I-cheques whereby electronic payments are made through a third party or intermediary. This is similar to the traditional cheque payment system except that these cheques are created and exchanged online with the intermediary debiting the customer's account and crediting the merchant's account.
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