HCOMS website design :: e-commerce payment options
Ecommerce can be a huge step for many SME’s, the difference between having a shop, and a shop that sells will make or break some businesses. So you need to be sure that your potential customers feel comfortable with making payments over your website. There are numerous ways of accepting online payments, some more reliable and secure than others.
Below is a selection of payment methods that we have had experience with, and/or integrated into e-stores for clients.
Credit/Debit Cards – Merchant accounts
Accepting credit/debit card payments will be an essential method of payment for any serious e-commerce business. If you are selling retail, you will not be able to successfully avoid accepting credit cards. Most consumers will purchase using a credit card for online purchases as opposed to cash or check. Potential customers will feel far more secure if you can accept payments from the major providers i.e.: Visa, MasterCard and to a lesser extent American Express. To do this, you will need a merchant account; this will be provided by whomever you bank with as a business.
Expect to pay between 15 and 30 pence for every transaction. And the credit card companies will collect between 2% and 3.5% of the transaction from you.
PayPal
PayPal accounts often run along side a merchant account, PayPal accounts offer an easier way to process the same payment for the customer. PayPal is an online service that allows you to send money across the Internet using either your credit card or bank account for funding. PayPal charges a percentage of your transactions, but it does not charge any monthly fees.
If you don't have a merchant account, PayPal can be an effective alternative in order to allow your customers to use a credit card. To use PayPal you must sign up for an account, which not all customers will have. However, with the absorption of PayPal into eBay, it is quickly becoming an internet standard, with more and more people securing accounts daily. We suggest that rather than using PayPal alone, that it is used in conjunction with a merchant account.
If you sell on E-bay and do most of your advertising there, PayPal will be important to your customers because it is commonly used on E-bay.
E-Check
E-checks provide a handy way to receive payment from customers with no credit card. The downside of accepting an e-check is that the amount of information that your customer must put into the site is greater than when they are simply using a credit card. Because they will need to input a routing and account number, among other things, there will be more room for error, confusion, and the possibility of a lost sale.
Wire Transfer
This option is great for large transactions. A wire may cost your customer about £10 to send and will probably cost you around £5 to accept. In a wire transfer, the money is going to show up quickly in your account. There will be no chance for a chargeback, a card to decline, or a check to bounce. Most people will only feel comfortable sending you a wire transfer after they speak with you on the phone. With the fees involved, this payment method is really only good for large transactions. However, if you sell wholesale and have customers making transactions over £600 it will save you a good deal of money as opposed to a credit card payment.
Wire transfers have long been at the center of many online scams, with little protection available from fraud, most consumers will run a mile if they see that the only way they can transact a payment is through a wire transfer.
Worldpay/Protx
Worldpay and Protx are both methods of transacting payments via credit / debit cards, without having a merchant account. They essentially function the same as a merchant account, but can cost far less, so are more ideally suited to SME’s than large businesses.
Worldpay is part of the Royal Bank of Scotland group, to use its services can cost anything from £150 a year upwards.
Protx is owned by the Sage group, and costs a flat rate of £20 per month up to 1000 transactions per quarter, or 10p per transaction for anything over 1000 transactions per quarter.
Conclusion
Deciding how to accept payments will depend on various factors, the size of your business, how expensive your product is etc…
At HCOMS we can help you to decide and implement your chosen method into your e-shop, and if necessary, change the way you process payments as your business grows.