Everything You Need to Know About Payment Methods for Your Online Store

Payever
payever
Published in
9 min readJul 25, 2017

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The payment section of an eCommerce website is one of the most important parts of any online business. However, quite often it goes underappreciated and without proper attention. Payment part of the checkout is the last step in the conversion process, and if done carelessly, it can create a huge bounce barrier for your potential clients. If you want your online store to succeed, your site, including the payment options, needs to be optimized for conversion.

Therefore, this article will introduce you to all you need to know about payment methods for your eCommerce including how to make the process easy, frictionless, flexible yet not overly eager.

SSL (Green Padlock)

If you are building an eCommerce, you will quite probably need an SSL, a code that establishes a secure connection between the browser (your client) and the server (your site). SSL stands for “Secure Socket Layer” and is essentially an encrypted connection, a protocol used to secure and protect transactions (not necessarily financial). It’s integrated into all websites that deal with sensitive information, e.g. Facebook or YouTube, and ensures the user the connection is safe.

How does your customer know you have an SSL certificate?

There are two ways to tell if a website is encrypted:

  • A green lock icon in the URL bar
  • A URL starts with HTTPS instead of HTTP

Your site can be exempt from the legal necessity of SSL if you aren’t storing any sensitive information yourself and are purely relying on an external gateway such as PayPal. Off-site payment gateways have their own security protocols and standards.

However, be careful! Even if you are using an off-site gateway, when you enable your clients to create accounts with an email, home address, and password, you are also exposing them to risks. While this information is not as sensitive, most people tend to use the same password everywhere so a little bit of reverse hacking could lead to a fraud.

The risks that come along with the lack of SSL certificate include:

  • Customers doubting the trustworthiness of your site
  • Cyber criminals using reverse engineering to hijack your clients’ email, social media, or other online accounts with information retrieved from your online shop
  • Witty individuals imitating your store because there is no manner of proving who is the real owner or manufacturer of the goods
  • Theft of personal or financial information you store on your servers
  • Reputation and financial blow caused by any of the above unfortunate events

How do you get an SSL?

SSL certificates can be purchased from a wide variety of third-party vendors. First and foremost get information about SSL from your domain seller or host as you are likely to get a more convenient bundle pricing.

Before the purchase, do your research and consider which type of SSL is the best fit for you. You can start off with a basic SSL which covers a single domain e.g. examplestore.com or subdomain.examplestore.com. However, you can also purchase multi-domain SSL certificates that protect multiple domains.

Offer Multiple Payment Options

Another important step towards optimizing your payment process is enabling your clients in a way that suits them best. There is an incredible number of ways you can pay online, and there truly is no good reason to limit your store or your customers. Although running your payments through various gateways can produce slightly higher per-transaction fees, customers prefer to have an option to pay in a way they are the most comfortable with.

This is not to imply you should have every possible payment option on your site. Too many options are as bad as one and could create an unnecessary distraction from completing the purchase. The trick lies in picking 3–5 payment methods that are the most convenient to your country and customer demographic.

What is Merchant Account & Do You Need It?

To be able to accept credit and debit card payments, you will need to open a merchants account. A merchant account is a contract between a merchant (you) and a credit card processing entity. It’s a special type of bank account that holds funds captured from credit and debit card sales, once the transaction is completed, the money is passed on to your actual business account. It’s fast and secure.

To open a merchant account consider:

  • What kinds of credit card brands do you want to allow on your site? Mastercard and Visa but, for example, if your primary customer base is in the US, you can include American Express.
  • How much sales will come through the credit cards? This also depends if you will allow other payment methods on your website. It’s important to have at least an approximate idea before you talk to a merchant account provider.
  • What are the merchant account transaction fees? There are two basic kinds of rates: flat rate and percentage based rate based on the amount of transaction.

Keep in mind that to apply for a merchant account you will need to have a business bank account, provide your business license and complete a detailed application.

If you are just starting out, a merchant account can be overly complicated and not necessarily worth your time and money. In that case, you can opt for a third-party payment gateway.

What is Payment Gateway?

A payment gateway is essentially a service that processes credit cards for you. This type of software enables and authorizes credit and debit card information and transactions for online retailers. It’s a middleman between the retailer and their sponsoring bank.

Payment gateways are for both online retailers and brick-and-mortar stores. Some gateways will allow you to get started straight away; others will take a few days to set up. A good and reliable payment gateway is well-documented, doesn’t charge high per-transaction fees and enables you to manage your account online.

How Do Payment Gateways Work?

The process differs depending on a gateway. Some of them, like PayPal, require the user create an account on the website. However, most allow making direct payments. During the checkout, the first gateway step is collecting shopper’s credit or debit card information, storing them securely and authorizing the purchase if the funds are sufficient.

There are a plethora of payment gateways available. Some of the most popular include:

  • PayPal. PayPal is the most popular gateway on the market and is available in a vast majority of countries. The list of countries where PayPal is not available is quite short. It requires users to create an account, but if you solely use it for online payments, it doesn’t involve any fees and express check out option which makes paying ever so easy.
  • Google Wallet. This is another mobile payment system which allows user to send payments from their smartphones (newer Androids as well as iPhones). It’s free and stores credit, debit and gift card info. Google Wallet is a smart move since mobile traffic accounts for 50% of all eCommerce traffic, but purchases are still lower than on browser mainly because paying on mobile has been quite awkward up till now.
  • Apple Pay. Like Google Wallet is a mobile payment method which allows you to pay both online and in brick-and-mortar stores. When you buy a product, Apple Pay utilizes a device-specific number and unique transaction code meaning your card number is not stored on your mobile and therefore protected. It’s available on iPhone 6 and newer models, so if you are selling products targeting Android users, Apple Pay is not the smartest choice. Also, the number of countries that support it is still relatively limited.
  • Amazon Payments. This payment method offers an eCommerce solution that uses your customers’ Amazon.com accounts. It allows you personalize your payments, shipping, sales tax, returns, and chargebacks. You can either opt for a full Amazon Checkout experience or Amazon Simple Pay which is a service focused on payments-only. It’s a great trust enhancer, and Amazon ensures the data of your customers are protected. However, only convenient for people who already have an Amazon account.
  • Authorize.net. Authorize net is an online payment gateway that enables you to accept credit card and electronic check payments through their store. It’s been on the market since 1996 and is available in the US, UK, Europe, Australia, and Canada. The service convenient, however not very useful if you plan on selling to South America, Asia or Africa.
  • Stripe Payments. Stripe, similarly to payever Payments, enables you to accept payments in multiple currencies, credit card brands as well as activate multiple payment methods. It supports ACH Debits, Bitcoin, Alipay and runs a beta version of WeChat Pay. The tool allows you to write your own simplified payment code or use no-code plugins such as WordPress, Drupal or Magento.
  • Payline. Payline provides mobile, online, in-store as well as platform payments. Their pricing plan is standardized and fully disclosed so you can use it without the fear of any hidden fees. Plus, you will be able to earn discounts based on your sales volume. They also offer a Payline Start plan for starting merchants.

These are just a few general examples. You should do your own research to find out which gateways are most used in your target country or by your target audience. Also, some gateways might be completely unavailable in certain countries, so be careful if selling internationally.

What About the Price?

Each payment gateway has its own pricing rules and rates. How much you can deal with depends on you the frequency of sale and amount of purchases. Again, it’s crucial you do your own research and see which gateways are the most likely to be convenient for your clients.

Why is Payment Gateway a Good Idea?

Security. Keeping your customers’ credit card information stored with an external company takes the target off your back. Gateway companies have large and talented security teams devoted to keeping their client’s information secure. Their level of security is considerably better than what you would be able to build with limited resources of your startup.

Quick Setup. Opting for a payment gateway will allow you to start selling almost immediately, often the same day you sign up for your account.

Customer Trust. Shoppers are more likely to trust a largely reputable payment gateway than a payment system they have never seen before. This is especially useful if your brand is not that known yet. It will add a sense of familiarity to the shopping process.

How Do You Setup Multiple Payment Options?

As we mentioned before, it’s good to give your customers choice which means setting up different payment methods. While you can integrate them to your checkout process one by one, there are online tools and integrations which can make the process significantly easier.

For example, payever Payment app enables you to activate or deactivate several different options at once with a swipe of a finger. You can enable PayPal, credit & debit card payments, bank installments, Paymill and more. The tool is for free, the only fees charged are the ones would normally pay with the corresponding payment methods.

Payment & Checkout Tips

  • Track & Analyze Your Checkout Page. The key to increased conversion is personalized optimization. No matter what payment options and their quantity works “in general” your audience has its unique behavioral patterns. Track which options are the most used, which ones are used the least, when and where people give up mid purchase, and so on. Use the analytics to improve your service.
  • Simplify Design. Keep all the elaborate wording and design to your product pages and social media. Keep your check out clean and easy to navigate. No distractive ads, images or promotions that keep the shopper from completing the transaction.
  • Simplify Everything. Remove any possible hiccups and frictions that would slow down the process. For example, don’t require customers to create an account to make a purchase; allow as many fields to be auto-filled as possible and let the errors to be easily fixed (e.g. auto-check the account number existence before submission).

Final Note

Checkout and payment process is a crucial part of your store and choices you make regarding payment options, design and structure will affect your conversion rate. You don’t need to get it right the first time. However, it’s important you keep watching and improving where you can. Review each detail carefully, test your choices, review analytics and adjust your setup according to results again.

The rule of skyrocketing conversion is: Never stop testing!

If you have any questions or you simply enjoy the article, please don’t hesitate to leave us a comment below!

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