There are many different ways you can accept payments from customers. The different payment options you offer can help increase the number of sales you make. Each payment option however comes at cost and it varies greatly between features, providers and whether you have a retail presence or only online.
1. Choices, Too Many Can Confuse
Too many choices can confuse users. This comes in to play far more in the on-line world. If a user has to spend even 5 seconds trying to look through a list of 30 payment options, then trying to figure out which one would be the most cost-effective for them, you are going to see a drop off in sales.
How many choices is the right amount. I would ideally say 2-4 choices. Any higher than this will cause
2. The Right Choices Improve Sales
Making things easy for consumers is the most obvious way to improve sales. Credit cards are a must for any store as they are the most common form of payment. Visa and MasterCard are the most commonly used, yet you may decide to offer AMEX (American Express). If your business deals with other businesses AMEX may be a great option as it does seem more common with business owners or high wealth individuals. However it costs more to process an AMEX card for your business. If your business is high volume, low-cost goods, AMEX generally is not a good option.
NFC and Wallets are also being released by companies such as Google and Square. They allow very easy and quick payments. The faster the payment, the less queues, the greater the shopper experience and more sales.
On-line you can also see many different options. Which ones would I choose?
A merchant account with a payment gateway and regrettably PayPal. While PayPal can be a nightmare for merchants, many people use it to buy. An interesting psychological point, is that some people purchasing with such systems as credits or PayPal don’t actually view the money as “real”. It isn’t money out of their bank account and hence people are a little more relaxed about it.
In Store Options
Many in store options exist and we are just witnessing some great changes. Listed below are some of the most commonly known methods.
There are many other options that are appearing, particularly in the NFC space.
If you are an on-line only merchant or accept payments on-line here are some of the ways you can do this.
|Name||Description||Costs (updated 09/09/2012)|
Merchant Account with Payment Gateway
|You must contact your bank for a merchant account. When you have one you will need a payment gateway.
A payment gateway sits between your merchant account and your website. Your website will communicate with the Gateway for all it’s processing requirements.
|Merchant Details: See above
Gateways Costs: Normally $10-$30 per month and 10 cents to 50 cents per transaction. Gateways charge per transaction and not a percentage of sale.
| [Future]: Facebook payments I can say with a lot of confidence is eventually going to come. I wouldn’t be surprised if I saw a A Pay With Facebook button appearing on shopping carts.
Currently there are Facebook Payments, but this is for Facebook applications at the moment.
|Stripe is essentially a better version of PayPal for processing credit cards. It is mainly for developers to integrate at this stage but it offers its service with no branding needed on your site. Meaning you can take credit cards without people leaving your site and no merchant account required. US Only at this point in time. I highly recommend it if you are developer.||2.9% per transaction + 30 cents.|
|On-line payment service for Credit Cards and Bank Transfers. I don’t think I need to explain this one further. Caution: While I use them, their support is the worst I have ever encountered.||2.9% per transaction + 30 cents. Decreases with transaction volume.|
(formerly Google Checkout)
|You just provide a link and Google will perform the Checkout. A similar method to PayPal.||2.9% + 30 cents. Decreases with transaction volume.|
Hopefully this has provided some good insight into the realm of offline and on-line payment options. Feel free to ask any questions below or on Facebook.