Regardless of sector, all eCommerce businesses need to work out how they are going to accept payments from their respective customers.
Traditional bricks and mortar businesses are often easy off, as they can accept hard cash and cards directly and on- site.
For eCommerce however, things are slightly more complicated. As deals are made and sealed online, the payment has to be processed remotely. That’s where the different online payment systems come in.
eCommerce has been around for decades – and there is an increasing variety of payment solutions to choose from. So how do you go about selecting the best online payment solution?
When it comes to accepting payments, there are three big options that are usually favored by eCommerce sites: Payment gateways, integrated systems and online wallet systems. All have advantages and disadvantages, so pinning down ‘the best’ option is virtually impossible. It’s all about appropriateness and fit to the eCommerce in question.
Let’s have a look at the different options:
Payment gateway systems
A payment gateway is a bit of technology that makes a secure link between the eCommerce website, the customer’s bank account and the company’s merchant account.
Payment gateways are often the cheapest option as well as one of the most flexible ones. It’s ideal for growing and well established businesses as the payment processing fees are low.
Finding the right payment gateway takes quite a bit of research and it’s all about finding a gateway that works with the specific eCommerce platform and then finding a merchant account that charges a fair fee for transactions, then pairing them up. It’s not just a matter of grabbing PayPal and adding it to your website.
If your eCommerce website is complex, then an integrated system can be a good solution as they are highly flexible and come with great documentation.
The integrated systems are basically a payment gateway and merchant account combined.
One of the most popular integrated systems is Stripe. Stripe was launched in 2010, and is a little like a super flexible PayPal, but are ultimately a more pricy solution than a combination system payment gateway.
Online wallet systems
Online wallets are great for brand new startups as they are super quick to setup and simple to phase out later.
Some of the most popular wallet systems amongst new eCommerce businesses are PayPal, Amazon Pay and Google Wallet. The systems are built by highly trusted companies, and while they’re often the quick alternative – they’re certainly not the cheapest.
While the wallet systems can seem a good way for a fresh- eyed startup, the prices are premium and often not a recommended as a long term solution for established businesses.
Choosing a payment system
It’s essentially about finding a payment solution that fits your business and your needs, then adjusting it as your eCommerce grows.
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