As an online retailer, accepting payments is one of the most important decisions you’ll make. With the increase in online shopping, accepting payments online is crucial. In fact, the Steelhouse 2012 State of Online Shopping Survey found that approximately 60% of consumers would be shopping online more frequently. This statistic, along with the increase in Internet usage in general, means that you have some decisions to make. While there are other choices in taking online payments, these are the five most common payment options at your disposal.
1) Credit Cards – Accepting credit cards as online payment continues to be the most popular and used method. Most people will have a credit card to use as payment, which makes it an easy choice as a retailer. You’ll need to locate a trusted and reputable credit card processing company on your website by setting up a merchant account. The merchant account will determine which credit cards you accept, such as Visa, MasterCard, Discover, and American Express. Internet merchant accounts are found through most major banking institutions, so starting with the bank where you have your business account is the first logical step. Third-party merchant accounts are also available for setting up credit card processing.
2) Paypal – Paypal is quickly becoming the go-to online payment processing company, as they offer more choices than simply accepting credit card payments. One distinction is that customers of your business can still use credit cards through Paypal, but they don’t actually have to have a Paypal account. And the benefits for those who are registered with Paypal, include using their Paypal balance, or any registered credit or debit cards linked with their account. Paypal also benefits businesses by offering an easy set-up process, relatively low fees, and no monthly fees like some other credit or debit card processing companies.
3) Debit Cards – As an online retailer, you should ensure that your merchant account also accepts debit cards. Some payment processing companies are restricted to credit cards, while others accept debit cards as long as they have a Visa or MasterCard logo on them and can be used as credit cards. The difference between these is important because many consumers prefer to use a debit card as opposed to a line of credit. The debit card payment ensures the products are paid for in full, as it is coming straight from their bank account.
4) Google Checkout/Google Wallet – Google has provided two new online payment processing solutions for retailers looking to simplify the payment process. Google Checkout is for online retailers that want to allow users to store their information, including shipping information, and credit or debit cards that are linked with their own Google account. You can also use Google Wallet which is similar to Google Checkout, but used for mobile payments and can also be used for gift cards and store loyalty cards.
5) Mobile payment options – Accepting payments with the customer’s mobile phones is something to consider, especially since mobile use continues to increase every year. More and more consumers are beginning to look for retailers who accept mobile payments. You have a variety of payment processing companies through mobile phones, including Square, Paypal, GoPayment, and others. This makes it easier for customers to pay for goods they are viewing from their mobile devices, and can help to increase your total number of sales when you offer this option.
Increasing your business and total sales is about offering options. Customers want to know that no matter what their preferred method of payment is for Internet-based retailers, the retailer will offer that choice. So whether they want to pay with their mobile phone, with a credit card, or by using a service such as Paypal, you will offer that option. Consider this when deciding which online payment processing companies you will go with and which options to give your customers.