If you run an ecommerce business then you have a wide choice of online payment methods. We take a look at what you need to know about the main options.
Ecommerce accounts for billions of dollars in sales each year. Running an ecommerce business is a great way to tap into those profits. However, you need to give people the best online payment methods — otherwise, the buying process gets complicated. This can drive them to your competitors instead.
Not sure which online payment services to try? The best online payment methods depend on many factors. Your website design, industry, target customer, and more can help determine which online payment systems you should use.
In this guide, I’ll help you choose the right payment methods for your ecommerce needs. Keep reading for a breakdown of all the things you need to know to make the best decision!
How to Choose the Best Online Payment Methods
First, there are some things you’ll need to consider so you can pick the payment methods that suit your business best. Here’s what you should keep in mind as you decide.
1. Recurring or Single Payments
If you need to set up recurring payments, you’ll need a method that can support them. But if you’re only taking single payments, you have more flexibility as to the methods you can use.
For example, if you’re a B2B company, you’ll probably want your customers to be able to set up automated reorders. But not all online payment methods will support that. You’ll also want to check for flexibility in terms of payment amounts and scheduling.
2. Accepted Currencies
If you’re operating with a single currency, choosing a payment method might be easy. But accepting currencies around the world can make things more complex — and that’s just what many companies today need to do.
You won’t want to count out potential business just because those customers are based in another country. But you’ll need payment software that calculates exchange rates for you, and offers prices in the currency your customers are using. If they have to calculate currency exchanges on their own, they might go elsewhere.
3. Company Location
Your own location can also affect the best payment methods to choose.
For example, there might be laws governing payment providers located in a specific country. If you’re not in the same country, those laws can become a hindrance to your operations. Make sure there won’t be any processing holdups due to geographical, legal, and other differences between countries.
4. Service Reviews
You should definitely check the reviews of a payment method’s service before committing to it. What do the people who have used this method before have to say?
Consider factors like the industries of the companies that use their method with success. Is it a similar industry to yours, or do most of their customers work in totally different industries?
Popular Online Payment Methods
Now, let’s take a look at the most common payment methods your customers may want to use. The system you choose will depend on which of these methods you’re most likely to encounter.
1. Credit Card
This is one of the most common methods of online payment, and it’s definitely one you’ll need to be prepared to accept.
Fortunately, most online payment systems are set up to accept credit cards. However, to accept credit card payments, you’ll need to have a payment gateway provider.
Payment gateways are the go-between for your website and your customers’ bank accounts. This is what makes accepting credit card payments possible. The gateway is responsible for sending transaction information, validating and authorizing the payment, and confirming its success. Sometimes, they’ll even help protect you from fraud.
There are quite a few payment gateways or processors you can choose from. Look for ones with solid security and fraud protection. Without these features, it can be very hard for a business to be compensated for fraudulent credit card charges.
If you’re in a high-risk industry, like online gambling, card processing experts High Risk Solutions recommend working with a card processing company that’s experienced with similar industries. That way, you’ll be protected from the most common issues.
2. Apple Pay
Apple Pay has become a very popular online payment method for its secure, fast payments. Since it uses touch ID to confirm payments, fraud is virtually impossible.
Even though Apply Pay is new, it’s one payment method to consider accepting, since it’s likely to keep getting more popular.
3. PayPal
PayPal has become one of the favorite ways to pay online. Many customers trust its security, and may be more willing to use it than credit cards and other forms of online payment.
4. Bank Transfer
This is less common, but you might still encounter some customers who want to pay with a direct bank transfer. Whether or not you’re willing to accept them is up to you, since it’s a less conventional form of online payment processing.
Direct deposit is one of the most common methods of bank transfer. However, bank transfers can be more complex than other payment methods. There’s some manual processing involved, and you’ll need to make sure that the funds clear before the order gets completed.
5. Cryptocurrency
Will your ecommerce site accept Bitcoin or other types of cryptocurrency? It’s a niche payment method, but in some industries, you might find a lot of customers hoping to use it.
Cryptocurrency is appealing to certain customers with online privacy and security concerns. But accepting it can be risky, as processing this new type of currency is rarely straightforward.
6. Gift Cards
Gift cards aren’t just for in-store purchases. In many industries, gift cards are still popular, and you’ll probably want to make a simple way for people to spend them on your site.
You might also want to offer store credits, which can operate in a similar way. For example, you might offer store credit refunds for returns, so that people will still have to spend that money in your store even if they don’t keep the original purchase.
Which Online Payment Methods are Best for You?
Generally speaking, the more online payment methods you accept, the more money you can make. However, there are some methods, like cryptocurrency, that come with potential drawbacks. You’ll need to weigh the pros and cons, and the specifics of your industry, to come to the best decision.
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