How to find an e-commerce payment processor
8th Nov 2012 | 09:10
Finding an e-commerce payment processor and gateway
For businesses choosing the right payment partners is vital to get right, but how do you choose the right platform for your store?
E-commerce continues to be a force within the retail sector. According to the Office of National Statistics in February of this year over 10% of all retail sales were made online. This means that just over £1 in every £10 was spent online.
By the end of this year online retail sales are expected to reach an estimated £197 billion across the whole of Europe. With a consumer base ready to spend, your business must ensure it offers the payment methods these customers want to use.
The high street may be going through some of the most testing economic times in recent memory, but businesses still need to ensure they can offer their customers right payment methods.
Choosing a merchant account
When businesses first set-up their online stores they look for the easiest methods of receiving payments. Today this will often mean PayPal. Anyone with a valid email address, credit or debit card can make payments using this system. PayPal is popular, as it doesn't require your business to have a merchant account with a clearing bank.
An issue with PayPal is its relatively high transaction fees which when compared to standard credit card clearing costs can be quite high. PayPal does, however have a merchant rate your business can apply to use if you will be processing more then £1,500 per month. You should look closely at the charges that PayPal would make to your business to ensure these are affordable.
A proper merchant account with your bank is more complex to set up and will require that your business passes a credit check and usually pay a set-up fee, but the overall transaction costs will usually be lower. If your business will be turning over several thousand pounds in any given calendar month, it's advisable to look at opening a merchant account.
E-commerce is now well established with a number of well-known payment platforms now available to your business. Some of the vendors to consider include:
- Google Checkout
Selecting a payment gateway
If you decide that a full credit and debit card clearing system is right for your online store, you will need to set-up a payment gateway that links to your merchant account. This can be beneficial, as your customers won't have to step through to an external system such as the PayPal payment system for instance and makes your site's checkout procedure more efficient and customer friendly.
Often you will find that your bank now has a separate service for its Internet merchant accounts and can offer you all the help needed to get your account set-up ready to receive payments. Once this account is set up you can use it with one of the payment gateway service providers listed above. Think of these services as an online electronic till that links your online store to your merchant account and will also include anti-fraud systems.
Payment systems for bricks and clicks
Business these days tend to have an integrated approach to their operations with a physical store and also a presence on the Internet. Today, your customers want a seamless transaction experience no matter which of your stores they are visiting.
Integration is the key. Talk to your bank about your needs, as they will be able to offer solutions that include full electronic payment platforms that can include hand-held devices for taking credit and debit card payments, to apps that can be used on smart phones and tablet PCs.
e-commerce payments checklist
Use the checklist below to help you decide which payment system is right for your business:
- Do you want to take payments in a physical and online store? – Merchant accounts can now be integrated to reduce paperwork and costs.
- Is your store only online? – Online only payment systems like PayPal and Google Checkout make it fast and easy to make payments, but carefully consider the costs.
- Will your store need stock and order tracking? – Today EPOS (electronic point of sale) hardware and software can integrate with your payment system to keep your stock control up-to-date.
- Have you considered fraud with your credit and debit card payments? – A merchant account will usually have fraud prevention services built in to minimise charge backs for any fraudulent payments.
- Does your business only sell to other businesses? – The usual way for B2B enterprises to pay each other is via BACS (Bankers' Automated Clearing Services). Ask your bank about how to set-up this system for fast and efficient payments to me made directly into your account.
It is important to get the right payment options for your business whether this is off, online or both. Your customers are looking for businesses that make their checkout and payment experience as efficient as possible. Make sure your business' doesn't put any barriers in their way.