Having an online payment system is a convenient way to do business and collect payments, but what are the risks involved and what mechanisms can be the least worrying?
These days, it is essential to accept payments online if you run an online business. In retail environments, having a payment option, or e-payment - on your website offers total comfort and peace of mind for browsers who can complete purchases quickly and efficiently, from the comfort of their home or office. Having a payment service on your website would enable you and your clients to easily exchange money electronically over the internet.
With an online payment service, your business can receive payment from virtually any customer with an email account.
It removes the effort of having to receive and process checks, which seem so antiquated in this fast-paced business climate, or having to travel to an actual location to make the payment in person.
Online payment services have become very popular with businesses and consumers. David Robert, CEO of A Great Place to Work based in Dubai agrees online payment options are ideal. "The intention should be to take the client out of the loop by providing easy payment for products, services, and events," he said.
Online payment services can either replace or supplement your decision to accept credit and debit cards. Opening an online payment account is often faster and easier than setting up a Merchant Account - which is required to accept credit and debit card payments. Online payment accounts typically incur smaller fees than a traditional Merchant Account, which can have a big impact on businesses with many small transactions. Having multiple payment options available is beneficial from a customer-service perspective.
"In fact, we are exploring an online payment system of our own to support our clients," said Robert. Another advantage is the capacity to store credit card information for clients to get business done faster next time.
However, online payment services have their drawbacks. Most of these services redirect customers to a payment service website to complete a transaction. Having to leave your business's website can be off-putting or confusing for customers - especially those new to online shopping - and could make them abandon a purchase.
Consumers have become used to choosing the items or products they wish to purchase and just typing in their credit card information to complete a sale. Businesses that only accept checks, or will only process credit card information over the phone, may seem questionable or unreliable to some consumers, especially if they are not familiar with the business.
Major providers of online payment services such as PayPal have developed features like two-factor authentication to help businesses enhance e-commerce security. Two-factor authentication requires businesses to enter a six-digit code in addition to their password to minimize third-party scams.
PayPal is an online service that enables businesses to accept payments from any customer with an email address and credit card or checking account. PayPal is a popular option for businesses with many small transactions and businesses that do not directly process card payments.
When a customer decides to make a purchase on your business's website via PayPal, they simply click the button that will redirect them to the PayPal website. New PayPal customers will complete a one-time, free registration to receive an account number. This account number will allow them to securely make online payments to registered merchants such as your business. After registration, the customer will complete their purchase using their account number. The payment is then processed and sent directly to your PayPal account. The customer is then returned to your business's website.
Online payment services require a virtual shopping cart to allow businesses to accept orders on multiple products from their website. A shopping cart can calculate the total, tax, and shipping costs of an order, in addition to collecting customer account and shipping information. All this gives consumers the independence and freedom to make purchases on their own time without having to rely on opening hours, or sales staff.
As for your business, automated online payment processing can result in reduced costs. You do not need to pay someone to process your transactions, and you do not need to pay to produce paper invoices and statements. You will also save a lot of time as you will not have to spend time processing payments yourself.
Having your site set up to take online payments gives a professional image and boosts the credibility of your operation in the eyes of the consumer. It shows that you have taken the time and have invested the money to develop a well-run operation.
© Zawya BusinessPulse 2013
