Setting up the payment methods that are available for customers to use is often one of the last tasks when it comes to launching an e-commerce store.
The payment options we provide may seem trivial, but they can make the difference between success and failure in an online store.
PayPal, Stripe, your bank’s payment gateway… Which one to choose?
A customer may decide not to make a purchase if their preferred option is not offered. Can you imagine losing sales just because they have no way to pay?
You’d want to tear your hair out!
That’s why today we are going to tell you each and every one of the possible payment methods to offer your customers. To begin with, remember this sentence:
For the paying customer, even having all the options is not enough.
What is a payment method and why are they so important?
If you have an e-commerce store, you have already experienced the pleasure of receiving a confirmation email when a purchase is made.
However, that moment of happiness can be interrupted in many ways, one of which is not offering customers a satisfactory solution for sending their money.
A payment gateway, as the name suggests, is the means by which we allow customers to transfer money to us. But beyond the definition, the important thing is that it is a quick, comfortable and painless experience.
If we don’t provide the best process, we will be wasting all the hard work invested in marketing and conversions. Each sale is the culmination of the work done, the final goal, the goal we most want to celebrate.
E-commerce payment methods: how to help your customers pay you securely and conveniently
These are the options and tools that we are going to tell you about so that you don’t lose a single sale:
It has existed on the Internet since 1998 and, although it was not easy in some countries, it has become a 100% reliable payment platform for online shoppers.
Trust is the key factor. Although it has been a slow process, little by little internet users are losing their fear of making online payments. Users must be completely sure that their money is in a safe place.
PayPal has worked hard on that and is now considered an almost mandatory payment method in any e-commerce store.
Advantages of using PayPal as a payment method
Let’s take a look at the benefits you can get from using PayPal:
- Well known: its almost 10 billion annual transactions and more than 200 million users can attest to this.
- Transmits confidence: the average user knows PayPal, has an account and knows that it is a 100% secure and convenient payment method.
- Easy to set up: integrating PayPal into a CMS, whether it’s WordPress, PrestaShop, Magento or Shopify, or your own custom development, is within the reach of anyone, even without coding skills.
- Immediate access to funds: after logging in to your merchant account, you can transfer money to your bank or use it to make online payments with just a few clicks.
Recurring Payments – If your business charges customers monthly, PayPal can make a subscription payment.
The ease and confidence it offers users is, without a doubt, its main attraction.
No doubt it’s a winner from the buyer’s point of view, but is that the case for the seller?
Here are some of the reasons that might make you hesitate.
- Fees: PayPal is not the cheapest payment method, that’s for sure, especially if you bill a relatively low amount, which is when you’ll pay the highest fees.
This is what they charge:
- If you invoice less than 2.500 ¤ per month: 4% + 0,35 ¤ per transaction.
- If you bill between 2,500 and 10,000 ¤ per month: 2.9% + 0.35 ¤.
- If your turnover is between 10.000 ¤ and 50.000 ¤: 2,7% + 0,35 ¤.
- More than 50.000 €: 2,4% + 0,35 €.
- Payment is made outside your website: when the user clicks “pay”, they are redirected to the PayPal page to log in and complete the purchase. That may seem like a small thing, but anything that means adding another step to the process and making the customer leave your site is not a good thing, since you can’t monitor what’s going on there.
- Disputes – In the case of a claim filed by a customer, PayPal usually agrees with them by default. There are many cases where e-commerce stores have felt helpless in the face of arbitrary decisions made by my PayPal. It won’t happen if you do everything correctly, but they have the ability to freeze your money without much explanation.
That brings us to the big question…
Is PayPal worth using?
Our vote says yes, at least when your ecommerce doesn’t have the age and authority for shoppers to trust the brand itself. In addition, there are still a solid number of people who are used to making their purchases through PayPal and don’t trust paying with credit cards.
After a while you can see how many of your transactions are made with PayPal and according to this number include the fee in the prices of your online store, to avoid a lower margin on sales purchases with PayPal.
Or add an additional fee for users who want to pay with PayPal. Any of these options can be integrated into your online store. I would recommend that you factor this fee into the price of your products if possible, as any additional fees added at the last step of the checkout process (at checkout) could be a reason not to purchase from your store.
Payments with Stripe
In a market dominated by PayPal, a new online payment service has emerged with a vengeance, and no surprise there.
Stripe is a payment method that is becoming more and more installed and that you should know, value and probably include as a payment option.
Unlike PayPal, users do not need to have an account with Stripe as it only offers the option to pay with the most common cards: Visa, Mastercard, American Express…
Advantages of using Stripe
These are the reasons why we like it, and we like it a lot!
- Easy: this tool is so well developed that it is a pleasure for anyone who installs it. And its API is incredibly easy to work with.
Integrates with your website: no more sending users to another URL. The entire payment process takes place in-house without even reloading the page, which is perfect for single page payments.
- Clean design: it adapts 100% to the style of your website. No one will think it is a third party service.
- Cheap: their rates are lower than those of the competition:
European cards: 4% + 0.25 ¤ per transaction.
Non-European cards: 9% + 0.25 ¤ per transaction.
- Security: in order to use Stripe it is essential that your website has an SSL certificate installed, i.e. your URL must start with https.
You don’t have to scroll back to compare rates between Stripe and PayPal. For the minimum sales volume is 1.4% + £0.25 with Stripe and 3.4% + £0.35 with PayPal.
They also accept recurring subscription payments.
Disadvantages of Stripe:
- Advanced uses: it is a very powerful tool for large electronic marketplaces and marketplaces. If you want to take full advantage of the API, you will need programming skills or the help of a developer.
- Itis still a third-party tool: that means being exposed to its possible instability, rate changes …
- Not as popular as PayPal: users are not aware of Stripe’s advantages compared to PayPal and many continue to rely on the payment platform founded by Elon Musk, now owned by eBay.
- No immediate access to funds: Stripe processes the payment and sends the money to a linked bank account a few days later.
Now let’s take a look at the third most important option in terms of number of installations.
This payment method is offered by banks to send payments directly to your bank account.
Payment is made in the same way as when a customer is in a physical store and pays with their card, except without the card reader.
In other countries, each bank has its own payment gateway, but in Spain there are two main options:
- Redsys: for Servired, 4B and Cajas Rural banks.
- Mint: for savings banks.
The main drawback, besides the payment being made outside of their website, is the commission.
They usually charge you a minimum, which is usually quite high, just for having a point of sale. If you don’t bill enough to start making up that fixed payment, stick with other services that don’t come with any minimums.
Other forms of online payments
There’s more than we’ve covered. These are the ideal complementary services to ensure that no client escapes for lack of options:
- Cash on delivery: Years ago it was essential because of the lack of confidence in the Internet. It’s starting to fade now, but we still strongly recommend adding this option to your payment options, as users either don’t trust the new store (they are buying for the first time) or don’t want to use any other form of online payment. sending money
- Check: This form of payment used to be very popular in the US. Or UK, but not in Europe, if you avoid this option, you will not lose many customers, especially in Europe.
- Bank transfer: for those who are still reluctant to give their card information, this is a good alternative. Give them a 1-3 day window for you to receive the money before shipping the product.
Which payment method to choose?
It is important to offer a variety, so that you don’t lose any of your customers, if that doesn’t mean a big additional cost for you.
Our recommendation is to include all of the above, a card payment option either through Stripe or a virtual POS, PayPal, COD and Bank Transfer. You may be able to securely skip payment by check if your main markets are Europe, USA, Canada, Japan, Japan and the US. Or South America.