Setting up online payment modes on your website is essential in today’s marketplace. However, there are many online payment providers to choose from. Read on to see what considerations you should have before choosing your online payment service provider.
By the myBusiness techblog team
Implementing an online payment service allows your business to receive payment from virtually any customer—providing a user-friendly platform that caters to the needs of the increasingly digital customer. However, there are several key issues that you need to take into consideration before choosing an online payment service provider:
- Implementation costs and transaction fees
Paypal (as an example) could well be the first option that you consider due to its popularity. However, with convenience, comes greater costs—it charges 2.4 percent of every transaction plus 30 cents, which is somewhat expensive. If you take another route and open a merchant’s account with a bank, charges will be much lower, but there is a lot more work involved
- Security
Major providers of online payment services (for example, PayPal or Bill Me Later) have developed features like two-factor authentication to help businesses enhance e-commerce security. Two-factor authentication requires businesses to enter a six-digit code in addition to their password, making transactions more secure. As e-commerce becomes more popular, security features will continue to evolve. Be sure to research service provider plans for the most current security technology.
- Shopping cart services
Online payment services usually require a virtual shopping cart. These virtual carts allow businesses to accept orders on multiple products from their website; these shopping carts can also calculate the total, tax, and shipping costs of an order, in addition to collecting customer account and shipping information. Some online payment service providers offer free shopping cart services to businesses. If your online payment service does not provide a free, secure shopping cart option, you need to remember to add the cost of obtaining a third-party shopping cart service.
- Different payment modes
You also need to remember that everybody will want a different way to pay. Which payment modes can your chosen payment solution support? Credit cards are generally well accepted across all countries, however, certain cards such as JCB (Japan) and Discover (China) might be more applicable to certain countries. You also want to remember that some customers might prefer to use debit, rather than credit cards. From a customer-service perspective, it’s beneficial to have multiple payment options available.
If your business is already accepting credit and debit card payments, then online payment services can either replace or supplement these payment modes. Online payment accounts also typically incur smaller fees than a traditional merchant account with a bank—which impacts businesses that go through many small transactions in their daily business. The following is a list of popular online payment services that you can consider for your business:
Authorize.net is a payment gateway service provider that works with your existing merchant account to accept credit cards and electronic checks through your website. This service allows you to provide customers with a professional payment option that doesn’t require exiting to a third-party site.
Google Checkout is a payment option that simplifies the process of invoicing and collecting payment. You can generate and email invoices directly in the Google Checkout Merchant Center, and your customers can pay you quickly and easily with a single login. Google Checkout is also protected by an industry-leading fraud protection program.
PayPal is a very popular online payment option that allows small business owners to accept online payments without having a traditional merchant account. Through PayPal business services, you can accept credit cards online or by phone. You can also generate and track invoices through your PayPal account so you get paid faster.
Amazon Payments is a small business-friendly option for getting paid online. It easily integrates into existing websites, and allows customers to pay instantly for a variety of digital goods and services. Through pre-existing payment information stored on Amazon.com accounts, this service lets customers easily pay you directly.
So which one is the best? It all depends. You might just want to go with the easiest option. Many businesses immediately sign up with Paypal, largely because it is well known and does not require a merchant’s account to be set up. You might not want the hassle of dealing with secure web hosting, a separate gateway system, or a separate shopping cart for your site—which are all included in Paypal. In the end, you need to weigh the advantages of a costlier service provider, versus other lower-cost alternatives.
Is your business already using an online payment service? How effective is it to your business? Do let us know in the comment box below.