You must have payment methods for any online store

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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 eCommerce store.
The options we provide for payment may seem trivial, but they can mean 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 the option they prefer is not offered. Can you imagine losing sales just because they have no way to pay?
It would make you want to rip your hair out!

That is why today we are going to tell you about each and every one of the possible payment methods to offer your customers. To start, remember this phrase:

''For the customer who wants to pay, 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 to send their money to you.

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 be a fast, comfortable and painless experience.

If we don't provide the best process, we will be wasting all the hard work put into marketing and conversions. Each sale is the culmination of the work done, the final goal, the goal that we most want to celebrate.

E-Commerce Payment Methods: How to Help Your Customers Pay You Safely and Conveniently

These are the options and tools that we are going to tell you about so that you do not lose a single sale:

PayPal

It has been around 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.

Confidence 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 it 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 that using PayPal can bring you:

  1. Well known: its almost 10 billion annual transactions and more than 200 million users can attest to this.
  2. It transmits confidence: the average user knows PayPal, has an account and knows that it is a 100% secure and comfortable payment method.
  3. Easy to set up – Integrating PayPal into a CMS, be it WordPress, PrestaShop, Magento or Shopify, or your own custom development, is within the reach of anyone, even without coding skills.
  4. Immediate access to funds: After logging into your merchant account, you can transfer money to your bank or use it to make online payments in 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.
There is no doubt that it is a winner from the buyer's point of view, but is that the case with the seller?

Disadvantages

These are some of the reasons that could make you hesitate.

  1. Commissions: PayPal is not the cheapest payment method, there is no doubt about that, especially if you invoice a relatively low amount, which is when you will pay the highest commissions.
    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 you invoice between 10,000€ and 50,000€: 2.7% + 0.35€.
  • More than 50,000€: 2.4% + 0.35€.
  1. The payment is made outside of 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 causing the customer to leave your site is not a good thing, since you can't monitor what's going on there.
  2. Disputes: In the event of a claim made by a customer, PayPal usually agrees with them by default. There are many cases in which e-commerce stores have felt helpless against the arbitrary decisions made by my PayPal. It won't happen if you do everything right, but they have the ability to freeze your money without much explanation.

That brings us to the big question…

Is it worth using PayPal?

Our vote says yes, at least when your eCommerce doesn't have the age and authority for shoppers to trust the brand itself. Also, 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 PayPal sales purchases.

Or add an additional fee for users who want to pay with PayPal. Any of this option can be integrated into your online store. I would recommend that you factor this fee into your product pricing 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 bang, and there's no surprise there.

Stripe is a payment method that is being installed more and more 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 since 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!

  1. Easy: This tool is so well developed that it is a joy for anyone to install it. Plus, working with their API is incredibly easy.
    Integrates with your website - no more sending users to another URL. The entire checkout process takes place inside without even reloading the page, which is perfect for one page checkouts.
  2. Clean design: it adapts 100% to the style of your website. No one will think that it is a third party service.
  3. 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.
  4. Security: in order to use Stripe it is essential that your website has an SSL certificate installed, that is, your URL must start with https.

You don't have to scroll back to compare fees between Stripe and PayPal. For the minimum sales volume it is 1.4% + 0.25€ with Stripe and 3.4% + 0.35€ with PayPal.

They also accept recurring subscription payments.

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Stripe Disadvantages:

  • Advanced uses:  it is a very powerful tool for large electronic marketplaces and marketplaces. If you want to get the most out of the API, you'll need programming skills or help from a developer.
  • It's still a third-party tool:  that means being exposed to its possible instability, rate changes…
  • Not as popular as PayPal:  Users are unaware of Stripe's advantages over PayPal, and many continue to trust 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.

Virtual POS

This form of payment is the one offered by banks to send payments directly to your bank account.

The payment is made in the same way as when a customer is in a physical store and pays with his card, except without the card reader.

In the rest of the 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, aside from the payment being made outside of your website, is the commission.

Normally they 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 for that fixed payment, stick with other services that don't come with any minimums.

Other forms of online payments

There is more than we have covered. These are the ideal complementary services to ensure that no client escapes due to lack of options:

  • Cash on delivery:  Years ago it was fundamental due to the lack of confidence in the Internet. It's starting to go away now, but we still highly recommend adding this option to your payment options as users don't trust the new store (they're buying for the first time) or don't want to use any other online payment methods. 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.
  • Wire transfer:  For those who are still reluctant to give out their card information, this is a good alternative. It gives them a window of 1-3 days for you to receive the money before sending the product.

What payment method to choose?

It's important to offer variety, so you don't lose any of your customers, if it doesn't cost you a lot more.

Our recommendation is to include everything mentioned above, a card payment option either through Stripe or a virtual POS, PayPal, COD and Bank Transfer. Maybe you can safely skip payment with a check if your main markets are Europe, USA. Or South America.

Carmen Marín
Editor

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