Today’s ecommerce business owner has a multitude of choices when it comes to online payment solutions. There’s PayPal, credit cards and mobile payment solutions, such as Apple Pay and Android Pay. But offering a variety of payment options to customers can be pricey, especially for smaller ecommerce businesses. Here are six tips for picking the right payment solution(s) for your business – and your customers.
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1. Vet providers.
“Choose someone who has a good reputation,” says Mark Tuchscherer, president, Geeks Chicago. Ask fellow business owners who they use, and if they are happy. And read online reviews.
“Your payment processing system is going to be a business-critical part of your life,” says John Shapiro, director of product management, QuickBooks Payments, Intuit. So “be sure to do research to select a trustworthy vendor, keeping in mind [or finding out] how the[ir] system will process transactions, which is often done by a third party. Also be sure to ask about transaction fees, being especially careful to investigate any hidden cost.”
Of course, the easy answer is to “go with a solution your ecommerce provider recommends,” says Michael Schnur, cofounder, Buffy Boots. “That’s not to say don’t do your research. But chances are your [ecommerce] platform has the easiest way for [a] not-so-tech-savvy person to [handle payments]. [So] if you’re launching a small business and wearing many hats [and are not tech savvy],” the simplest solution may be to just use what your ecommerce provider recommends and supports.
2. Make sure financial information will be protected.
“When small business owners consider ecommerce payment solutions, the primary consideration should be security and PCI compliance,” says Krista Fabregas, an ecommerce startup consultant and staff writer at Fit Small Business. “Luckily, some of the most competitively priced all-in-one online payment providers also are the most secure. Stripe, Square and PayPal top the list for secure processing, shopping cart integrations and ease of use [for omnichannel small business owners].
“For small businesses that prefer to use their own merchant accounts, they should seek a reliable cart and gateway combination that ensures PCI compliance,” she says. “Most of the top shopping carts either provide or support PCI-compliant checkouts. Ecwid and Shopify are two that top the list for carts, while Cart66 is an excellent PCI-compliant shopping cart plugin for WordPress users.”
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3. Find out and compare fees.
What does the service or plugin cost per month? Is there a one-time setup fee? Also, find out “what the transaction fees are for your merchant account,” says Matt Iswariah, owner, Luxzura. “Usually there is a flat rate plus [a] small percentage charge.” And keep in mind “where your target market is and what currency they use. Some payment providers will [charge] extra fees for payments outside of your home currency.”
Also compare the “costs per transaction versus monthly minimums,” says Noah Bleich, co-creator, The TeaBook. “You might get a low processing charge, but watch out for the minimums and extra fees, especially cancellation if you switch.”
4. Think globally.
If your business is or plans on selling to customers outside of your home market, choose a payment platform that accepts different currencies, as “customers need to be able to pay for services the way they want to,” says Kris Nagel, CEO, Vindicia. “Even if your immediate plans don’t call for international expansion, your platform should have the capabilities to expand and grow with your business.”
5. Consider a solution that offers more than just credit card processing – and has good tech support.
“When choosing an ecommerce payment provider, make sure that they have the capability to handle back-end taxation and compliance regulations versus just being able to process payments,” says Hayden Reed, senior vice president & general manager, Digital River World Payments. “It’s great if they can process your customers’ payments, but it’s even more advantageous and efficient if your partner can offer end-to-end support from payment and fraud protection to tax management and financial reconciliation.”
Similarly, “it’s also important to find a vendor that offers strong tech support,” says Shapiro.
6. Don’t pigeon-hole yourself with only one payment solution.
“When we first started out, we didn’t accept PayPal and inevitably lost some sales because of it,” says Schnur. “Luckily our shopping cart platform had an easy solution [for] integrating it into our check out. Today, online payments from PayPal make up 20 percent of our revenue.”
Indeed, while some businesses pooh-pooh PayPal, “a 2013 study by Hill Marketing Group stated that almost 3 in 4 customers preferred using PayPal over a credit card,” notes Ellen Cunningham, marketing manager, CardFellow.com. “Respondents indicated that PayPal was less important when they shop[ped at] larger, well-known websites, but was preferred [when shopping at] small ecommerce businesses.”
And you don’t have to use PayPal as your primary processing method. “You can set up ecommerce payments through your preferred processor and add PayPal Express Checkout, allowing customers a choice of paying by card (through your processor) or through PayPal,” she says.