The different payment options in your web store determine the success of your shop. It is very important to offer all payment options that meet the payment needs of your (potential) customers. Consumers want to pay quickly, safely and easily using a method they trust. As the owner of an online store, you can choose from a wide variety of payment methods. Which solutions are popular / important? What are the advantages and disadvantages of the various forms?
The most popular payment methods
Choosing the right online payment methods depends on the product or service being offered and the potential customer. In general, it is wise to start with a selection of payment methods that you know are popular within the market the online business is targeting. For example, most Dutch consumers prefer iDeal, while internationally PayPal and credit cards are more popular. In addition, you are required to offer a post-payment method.
iDeal
iDeal is by far the most popular payment method in the Netherlands. When a consumer chooses to pay with iDeal, they are directed from the online store directly to their own familiar banking environment, which is safe both for them and for the online store. Once the consumer pays, the amount is immediately debited, and the transaction is irreversible. This method is ideal for webshops focusing on the Dutch market.
Credit Card
Worldwide, online payment by credit card is a widely used method, which can make it very interesting to offer this way of payment. However, the connection is only profitable when there are a significant number of transactions or when you sell products in the higher price segment. This is because the cost of accepting and connecting credit cards is very high compared to other payment methods. In addition, the application process for credit cards can take several weeks. Furthermore, paying online with a credit card is susceptible to fraud because a transaction can be reversed for up to six months.
PayPal
PayPal is gaining more and more ground in our country. Worldwide, this payment method is actively used by more than a hundred million people. If you are considering doing business abroad, PayPal is a payment method that is definitely worth considering. You can compare PayPal to an online wallet. Consumers deposit money from their bank account or credit card into this wallet. With this money they can pay online. To take full advantage of PayPal, merchants need to create a business account. When you don't want to or can't accept credit cards directly, PayPal is a great alternative. Without going through the credit card application process, you can still receive credit card payments this way.
Pay afterwards
Pay afterwards, or Buy Now, Pay Later (BNPL), is becoming increasingly popular. Under Dutch law, you are required to offer an after-payment method for consumer purchases. Services such as Klarna and Riverty (formerly AfterPay) take over the merchant's payment risk and allow consumers to pay later, sometimes even in installments. Furthermore, it increases customer trust and can increase conversions.
Apple Pay & Google Pay
More and more consumers are paying via their smartphones, and Apple Pay and Google Pay are gaining ground as fast, secure mobile payment options. Especially for younger audiences and mobile users, it is important to offer these methods. In addition to being very user-friendly for mobile devices, it also has low vulnerability to fraud thanks to biometric security.
Bank Transfer
Like iDeal, payment is made by bank transfer within the consumer's online banking environment. Many customers like the fact that they can choose their own time of payment. This can persuade potential customers to actually make a purchase from the online store. A disadvantage can be that you receive the amount due late or not at all. You can mitigate this risk by not shipping the order until payment is made. But this in turn can scare customers away. Also, consumers may incorrectly enter the payment reference or amount due resulting in annoying delays.
Gift Certificate
A gift card is of course also a payment method, although that may not be something you immediately think of as a merchant. Logical, because the gift card can actually be seen - much more than the above mentioned online payment methods - as a marketing tool. By offering gift cards, you can encourage customers to come back to your shop more often or to introduce others to your products.
Payment Service Providers
If you could use some help choosing the right payment methods, it might make sense to turn to a Payment Service Provider (PSP) such as Mollie, Adyen, or Buckaroo. Of course, you can also use your own bank or an acquirer but PSPs specialize in online payments. You can also save money by outsourcing the payment process.
The main advantage of PSPs is that they can combine several online payment methods within one Internet cash register so that transaction processing can be provided more cheaply. They also handle the technical processing of payments, including security and integration. In most cases, you pay a percentage of the transaction amount or a fixed amount per transaction to the PSP for each payment method. Some PSPs charge both a percentage and a fixed amount per transaction. Want to know more about what is the best Payment Provider for you? Then contact us and we will be happy to provide you with advice!
Benefit thanks to our Mollie partnership
We at E-Expansion have formed a partnership with Mollie, and this partnership, using combined volumes, allows us to offer our clients very attractive rates for their online payments. And who doesn't like that? Most of the webshops we build from E-Expansion are built within Woocommerce (WordPress), Mollie offers an excellent extension that is easy to integrate into your webshop. Through a clear portal you can also easily manage payments, perform refunds and add additional payment options. Everything you need, at a glance.
Conclusion
You have three options for managing your payments: you can do everything yourself, you can delegate part of it to a distributing PSP, or you can leave the management of your online payments to a collecting PSP. When making a choice, it is good to consider the size of the company, the payment methods you want to offer and the way of working you yourself are comfortable with.
Want advice on the best option for your business? Then get in touch with us!
