03 Feb Online payment solutions for ecommerce stores
Online payment solutions were never going to be the same after Amazon invented the “click that changed the world” in 1999. Two decades later, ecommerce is worth £137 billion per annum in the UK. Making the most of that opportunity means constructing an ecommerce site that is attractive, easy and intuitive to use – and that includes payments. Payment solutions can vary and you should choose one that suits your company’s needs, but also one that answers customers’ biggest concerns when it comes to shopping online:
Security – Customers need to be sure that the retailer will keep their personal information safe.
Speed – Customers want security but they also want a fast, hassle-free experience.
Which online payment solution is right for me?
There are a few options for retailers to accept payments on their ecommerce site. One option is for customers to enter their payment details directly onto the site’s payment page. Another is to use one of the payment apps consumers often hold accounts with, such as Paypal. Established ecommerce retailers often offer a range of different payment options, largely in order to give customers more variety and greater convenience. But this can also add cost. When you’re starting out, it is best to keep it simple and effective.
Payment gateway vs payment service provider (PSP)
The most simple and effective way of taking payments is to take them directly via your own payment page. To make this happen you need one of two things. You either need to set up a payment gateway and merchant services account, or subscribe to a third party payment service provider (PSP) that supplies both.
The payment gateway sets up your payments page, where customers input their payment details and may or may not be branded but in most cases, your payments page will look and feel like just another page on your website.
It securely validates the customer’s credit or debit card details, makes sure they have the money to pay and transfers the money to a merchant services account.
A payment service provider (PSP) is a third party payment solution that merges both the payment gateway and the merchant services account, doing much of the set up for the retailer. Services like PayPal are examples of PSPs. But PSPs aren’t necessarily the cheapest or the most flexible payment solution, particularly for retailers looking to grow and offer a range of payment options to customers.
The PSP can either sit within the website or be a third party site like PayPal. These have the advantage of being recognised brands, but also mean the customer has to leave your site, go through extra pages and return again to complete the transaction. This may not be desirable for a number of reasons including slow site loading speeds, interrupted connections and simply dropping the basket out of frustration.
How to choose a provider
When starting out, typically ecommerce retailers will want to balance the cost of the service against how easy it is to get up and running and how much hands-on help they will need. However, what happens once the business grows? It pays to plan for the future, to understand how each solution charges and how much that will change as more payments are processed. A PSP, for example, typically charges higher rates than a payment gateway as much more of the process is managed by the provider.
Time matters, too. Some PSPs’ settlement times can be as long as 21 days. This means the customer has paid for and received their goods but the retailer still hasn’t received the payment. If maintaining cash flow is a challenge, a payment solution with prompt settlement will be key.
Solutions that also provide 3D secure – either Verified by Visa or Mastercard SecureCode – give customers confidence that your company does all it can to make sure transactions are secure. They also do the same for your business. It means you can’t be subject to a charge-back based on a disputed transaction because 3D secure passes liability for this from you, the merchant, to the card issuer.
Keeping in line with regulations is vital and can be challenging for new businesses. In particular, PCI – or payment card industry – compliance means you have to handle credit card information securely to minimise the risk that cardholders could have their financial data stolen. One of the simplest ways to make sure you are compliant is to work only with companies who have clear, level one (the highest possible level) PCI compliance status.
Finally, how you implement your payment solution can depend on how flexible you need it to be, and how much in-house technical, payments or data security knowledge you have. Cloud-based platforms offer retailers a number of advantages. There are no complex installations – everything is simply linked via an API installed by the retailer into their current, compatible ecommerce platform and updates are often immediate and automated. This means no visits by software engineers and information is stored securely with industry-grade protections in place.
Choosing a payments solution can be a highly personalised process that depends on a range of variables. It’s important not just to look at the company’s needs today, but also to project how it might evolve in the future to see if the chosen solution is likely to be fit for purpose. For more information on what payment solution might be the best for your business, click here.