E-commerce: payment methods and systems

When you have an e-commerce site, one of the main concerns is receiving payments. Ensuring that your customers can pay you quickly and safely is one of the first things you should solve. Your payment method should be reliable for both you and your buyers, you don’t want them to feel cheated but you don’t want to never receive your income. That’s why it’s important to know the types of payments available for your e-commerce site, as well as some of the most efficient payment gateways of the moment so you can choose the best one for your business.

Types of payment methods for e-commerce

When we buy something online, we know we can’t afford to pay like we would in physical trade. Most of the time, you enter information from a credit or debit card to pay. However, although this is the most convenient way to pay there are many other ways to receive payments on your e-commerce site. Some are safer for the customer than for you and vice versa, but they might be good choices if you start. Let’s see what they are.

• Bank transfer: In this case, you would make your bank details available to your customers to receive a transfer. The bad thing about this method is that for them there are not many guarantees, they make the payment without seeing that your order is made. Although it is a safe method for e-commerce because before sending the product you can make sure to have the payment. This can be a good method to boot up your website without having to install more sophisticated payment methods. The key to success will be to maintain very good communication with your customers.
• Payment on receipt of shipment: This method is very risky for e-commerce. It is about sending the product and receiving the payment until the customer goes to pick it up at the parcel store. The risk lies in not realizing the sale if the customer does not go for the package or if the parcel service loses it. In addition, not all messaging services have this service and may involve several additional costs for e-commerce. That’s why it’s important to consider it only if you don’t have another option available.
• Direct debit: If you sell a newspaper service this is a good option. The customer must enter their bank details and a charge will be made to their account or card every month or every year to renew the service. It can be tricky to implement if you don’t have the right infrastructure. You’ll need a good collection system. But it will ensure sales.
• Instant Transfer: This type of service is given through intermediaries such as Money Gram or Western Union, however, they are not recommended for e-commerce sites. They are usually the most used methods for scams since deposits can be anonymous and once made it is impossible to cancel or rectify. This is why customers often do not trust this payment method.
• Card: This is the most common method. To use it you will need an online payment gateway. There is already a great variety of them online, of very good reputation and on which most buyers trust. Further on we will give you more information about this payment method.
• Bank payment without card: This method, as well as the instant transfer, requires an intermediary, it is a non-banking institution. What the intermediary does is to safeguard the bank details of the customer to make deposits to people or online businesses guaranteeing their security and ease of payment. many offer great benefits for buyers but are often expensive for sellers. An example of this type of payment method is PayPal.

How do online payments work with a payment gateway?

As we mentioned before, the most common card payments. To do this you will need a payment gateway, which is a system that processes the banking details of your customers and make deposits securely. This system integrates what an ATM would do into a physical store with a point-of-sale terminal. They are completely safe to use and build trust between customers who have one. In simplistic terms this is how they work:

1. The buyer selects the products he wishes to purchase. The method to select the items can be through a shopping cart with which you proceed to payment.
2. The customer proceeds to the payment and enters their personal data.
3. The connection to the virtual point of sale terminal is made. This means that the personal data that the customer entered will be processed to make the payment. For security, e-commerce will receive encrypted data.
4. The point of sale terminal will request the bank details to make the payment and verify it. This is the moment when, as it were, the money goes from the customer’s card to the e-commerce account.
5. Finally, the payment is confirmed and this remains as an antecedent for the customer in case of having any claim. In addition, it is when you are usually immediately sent a confirmation that your order has been registered. It is an automated process.

How to choose a payment gateway for my e-commerce?

Before choosing a payment gateway you must have certain considerations. You can’t jump to install the most used gateway because it may not suit your needs or because it may not be within your budget. That’s why we recommend you follow these steps before hiring any service:

• Make a budget: How much can you spend on a payment gateway? Many have a commission per sale or a monthly cost per installation. You have to consider these costs in your company’s operating expenses.
• How it will be installed on your website: If you are not a web developer, you have to think that the payment gateway should be easy to install on your e-commerce site. The last thing you want is more trouble. Look for it to be compatible with the platform on which you have your website and to work, perhaps through the plugin installation.
• Which cards are supported: Not all payment gateways support all cards. verify that at least it captures the most common ones in the market so that your customers have payment options (Visa, MasterCard, American Express…).
• How safe is it: Check the reputation of that payment gateway. Read reviews, learn very well before purchasing the service, try to understand how it handles the data of your customers and yours. Remember that banking information is very sensitive and you do not want it to be shared with third parties or that there is bad management of any kind.
• Do they have customer service: There can always be unforeseen or technical problems. That’s why it’s important to verify that the payment gateway you hire has a good customer service system.

Payment gateway options

Now that you know all this you can choose the payment gateway that best suits your needs. These are some of the most trusted and popular payment gateway options.

• PayPal: Although PayPal is more of an intermediary, we couldn’t help but include it. It’s a well-known payment method that has a very good reputation. Besides that, it has grown a lot and has personalized options according to your e-commerce type, which means that it adapts to your way of selling. It is also a payment method available in more than 200 countries. If your commissions can be a little high. Learn more about Paypal here.
• Apple Pay: This payment method has many advantages. It’s popular with Apple users because you can pay in one click and because in physical stores you can pay without contact. It accepts most cards (Visa, Mastercard, American Expres, Union Pay, QuicPay, and Suica). Learn more about Apple Pay here.
• 2Checkout : This payment method belongs to Verifone. It has a very good reputation and can work very well for businesses that want to accept different payment methods. In addition to cards, you can process PayPal payments in dozens of markets globally. Learn more about 2Checkout here.
• Stripe: This payment method is originally from the United States, it is available in more than 25 countries. Its particularity is that it is a perfect method to make sales through Facebook Market Place, so it can help you diversify your points of sale. Discover more of Stripe here.
• WePay: Finally we have WePay, an efficient payment method for users. It is easy to use, fast, and requires no entangled steps. The only thing that subtracts points is that you have a limited number of payment options and cards. but it can be a good option if it does include the most used cards in your region. Start using WePay here.

Conclusions

On your e-commerce site, you need to receive payments safely and efficiently. One of the best ways to do this is to accept credit cards as would a physical trade with a point-of-sale terminal. This is possible with payment gateways, one of the most reliable payment methods. These systems encrypt data and communicate the buyer’s bank account with that of the seller immediately. Before hiring a service of this type you must consider the costs peruse if it is easy to install on your site, which cards it supports, if it is safe and if it has good customer service. Once you know all this you can install the most suitable for your e-commerce.

What payment methods do you have available in your e-commerce? Tell us in the comments.

Originally published at https://tankstudiolab.com on September 8, 2021.