The Shifting Online-Payments Landscape

Most every ecommerce website takes credit-card payments. But the sort of cards which merchants accept can impact cart-abandonment rates, and several consumers expect payment options aside from the four basic charge cards. Merchants that adapt these new approaches can increase earnings.

The purpose of this guide is to explain the fast changing online-payments landscape.

Credit Cards

Accepting credit cards is the very basic necessity of an ecommerce website. Though, not every website supports all the popular credit card brands.

Visa, MasterCard and American Express are accepted nearly everywhere but few retailers encourage Discover, JCB and Diners. Most individuals aren’t aware that the Discover and JCB networks are linked. If your website supports Discover, then you may add the JCB logo and encourage it or vice versa. China UnionPay was just accepted in China but today it’s accepted in over 100 nations. If your website has clients from China — or is in the tourism industry — then encouraging China UnionPay will probably increase your revenue.

Aside from accepting those branded credit cards, big retailers also accept private-label cards and co-branded cards. Private-label cards are branded for a particular merchant and may only be used within that retailer’s network of shops. Co-branded cards have been issued in cooperation with a massive credit card system like MasterCard and the merchant. These cards can be used anywhere the co-branded network such as MasterCard is accepted. Ordinarily, these cards are associated with a rewards program for those consumers. Best Buy is a fantastic example of a retailer that supports both kinds of cards and provides rewards as part of the Reward Zone program.

Best Buy supports a broad assortment of credit cards.

Some retailers, like Dell, allow customers to divide the payment across multiple credit cards. This option works well if your website offers big-ticket items which may exceed a credit card limit. CDW, the electronics retailer, even enables customers to call in their payment information as part of the checkout procedure.

Some retailers make it possible for customers to call in their payment details. This screenshot is from CDW’s shopping cart.

PayPal and Google Checkout

PayPal has also become a fundamental payment for an ecommerce website. Virtually every large retailer supports it. Since PayPal launched its guest checkout operation a few years ago, consumers can check out using PayPal without creating an account on the merchant’s site. This was a game changer, and it has led to substantial growth in checkouts using PayPal.

Google Checkout has existed for the past couple of years but doesn’t have the exact same amount of adoption as PayPal. Google Checkout has just transitioned to Google Wallet; it could capture a larger market share.

Pay Using your Bank Account

Some large online retailers provide consumers the option to pay with a check or a money order, where the money comes directly from the customer’s bank account. eCheck and Western Union are two vendors that support this payment option. The money takes a couple of days to clear since it follows the standard check clearing procedure. Some consumers that are reluctant to enter their credit card numbers online favor this alternative — although it delays the shipment of the purchased goods until the payment is cleared.

Many retailers are now also allowing their customers to pay with their bank’s bill pay services. EBillme is among the vendors which can help enable this payment option by sending an email that functions as the invoice for the internet order. The customer can then pay the invoice with the bank’s bill pay services. Since customers are already used to this bill pay service, this procedure is growing quickly.

Instant Financing

“Immediate financing” payment approaches are gaining wider adoption. Bill Me Later — possessed by PayPal — is one example. You are able to provide”Bill Me Later” as a standalone payment option or it currently integrates with the PayPal checkout flow. You can get the customer begin the checkout process using PayPal and then select”Bill Me Later” as the payment option on the PayPal site.

Other retailers, like Apple, are supplying customers to apply for credit cards as part of the checkout process to provide immediate financing. Apple has partnered with Barclaycard to provide immediate financing to their clients.

Retailers often use immediate funding as an incentive to sign up for credit cards. This illustration is from Apple.com.

Other retailers are offering an installation plan on their websites to cover the purchases, such as”3 easy payments of $39.99 each.” Sometimes, the retailer carries the burden of funding the purchase. In others, it’s working with another finance organization to expand the loan. Dell, for instance, provides instant financing to its clients.

Dell provides financing to”Preferred Account” clients.

Mobile Payments

More people have mobile phones than credit cards. So it’s no surprise that paying with a mobile phone is growing rapidly. Several vendors — such as ISIS, Intuit, and Square — today support an assortment of different ways for mobile payments. Retailers are adopting a variety of strategies to empower mobile payments using these vendors, as clear leaders and criteria haven’t been established. Much innovation is happening at physical, brick-and-mortar retailers to empower mobile wallets and near field communication (NFC) payments, which are contactless payments enabled using a chip on your mobile device and new, specialized hardware in the merchant’s location. Visa PayWave and MasterCard PayPass both encourage NFC payments. There are a few vendors — such as Boku, Mopay, Payfone, SurfPin, Zong — which have offerings to permit online payments with only the mobile phone number. As a merchant, you want to review and establish the offering and the vendor that is most appropriate for your trade environment. Mobile commerce isn’t a trend which ought to be ignored.

Subscription Payments

You’re able to provide subscription payment methods that charge the client a fixed amount each week or each month. Shoedazzle and Birchbox, by way of instance, use this subscription version. Some of the vendors that provide the subscription platforms are Aria Systems, Billing Circle, Recurly, Spreedly, Zuora, and SubscriptionBridge.

Other Emerging Payment Methods

There are numerous other newer payment methods which are now being offered or reviewed with big retailers. Dwolla is a U.S.-based private payment system that’s gaining in popularity; merchants who use it pay a flat 25-cent fee for each transaction over $10. There are a variety of international payment company — such as Klarna, PayEx, ClickandBuy, AfterPay, Konbini, Boleto Bancario — which are being used by big global retail websites. If your website does business internationally, then encouraging a few of these payment methods will better meet customers’ needs.