Credit Card Processing, ecommerce

Understanding Ecommerce Payment Options

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Creating a seamless experience for your online customers is essential when crafting an e-commerce website. You want to make sure your site is engaging, well written, and optimized for your buyer’s journey – and your payments experience is a big part of that. The last thing you want is for your customer to get all the way to the checkout and leave the page because of a poor experience.

When it comes to ecommerce payments, you have several options. One of the more common ways to collect payments is through a virtual shopping cart, but there are alternatives to this method that each have their own unique benefits.

Here’s a list of some of the pros and cons to accepting ecommerce payments in a variety of ways. Use this information to determine which solution works for your business.


Shopping Carts

By far the most popular method, online shopping carts allow customers to add items to a virtual cart for eventual purchase and then facilitate the processing of the payment. This is software that is installed into your ecommerce site that takes in payment information and disburses it to the appropriate parties.

The user experience for most shopping carts involves having to key in payment information. This can sometimes be a lengthy process, especially for a consumer generation used to convenience and speed. Be sure you’re only requesting the information you truly need. You might also want to consider implementing tools that can speed up the process. Examples include auto-selecting the brand of card for your user once they enter the number.

Equipping your ecommerce website with a shopping cart should be your first step when setting up an online business, as it is the most universal way consumers give payments. As you will see below, there are a variety of new technologies making it easier on the user. However, remember that not all of your customers will necessarily have them yet.

Related Article: How to Take Payments Online.


Buy Buttons

More common for social media, single-item shops, or businesses that offer services instead of physical products, “buy” buttons let the consumer click a button to indicate that they want to purchase the item or service. Some buy buttons can be used on blogs and social media sites, providing an immediate option to purchase.

Some companies that offer shopping carts also offer buy buttons, giving you a choice for your store. However, despite the fact that buy buttons have been around for awhile, some publications suggest that they haven’t caught on and might not be as successful as the traditional shopping cart.

Digital Wallets

Digital wallets like Apple Pay or Google Wallet are places where payment information is stored electronically, replacing the need for a physical wallet. The card information saved to these wallets can then be used for in-store purchases through contactless technology (where the consumer holds their smartphone in close proximity to the credit card terminal) or online.

Digital wallets are useful in the ecommerce space because you can easily link them with certain apps. Alternately, you can use them for quick purchases on mobile devices. If you have digital wallet functionality enabled on your ecommerce site, customers would only need to click once or twice to authorize the transaction, drastically cutting down on time and locking in that sale for you faster.

The downside, as mentioned earlier, is that not all of your customers will have this technology. You’ll need to make sure you’re providing more than one option on your checkout page.

In some cases, integrating the technology to your mobile app or website is complex. For that you may need a higher level of tech knowledge in order to leverage the API needed. If you’re looking to setup your ecommerce site quickly and easily, this functionality might need to take a back seat at first. However, you can always add more payment options down the road as needed.

Peer-to-Peer Money Transfer

Peer-to-peer money transfer services like Venmo allow your customers to easily link their bank accounts.

Venmo logo

These services are becoming an increasingly popular way consumers are “splitting the bill.”

It’s easier than ever to send money to a friend for a bite to eat or to your roommate for rent.

The good news for virtual retailers is that these services also make it easy to add “Buy with…” buttons to ecommerce sites. With just a few lines of code, you could add a button to your website that would give your visitors the ability to pay with their Dwolla, Venmo, or other peer-to-peer transfer account.

The downside to this option, however, is that some of these services charge an additional per-transaction fee to accept payments through their system. Balancing consumer satisfaction and convenience with what your ecommerce business can afford is essential.

Costs for Accepting Ecommerce Payments

With any method, you’ll have to pay for the ability to accept credit cards. With a traditional virtual shopping cart or a digital wallet, you’ll need a merchant account with a payment processor. That company will collect a fee for providing payment processing.

If you choose to offer P2P money transfers, you’ll typically pay a fee to the P2P service itself.

At the end of the day, what makes the most sense for your ecommerce business is what your consumers are going to respond to. If your target audience is full of first-adopters when it comes to new tech, adding in peer-to-peer buttons and virtual wallet options would be a meaningful investment. Making your decision based on your audience will ensure you aren’t wasting money or losing sales late in the buying funnel.

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Julia Olson

BY Julia Olson

Julia Olson is the Content Strategist at Fattmerchant, a subscription based merchant services provider. She works to educate readers about their merchant services, and loves spreading the word about the industry-changing Fattmerchant model.

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