Payment Options for Online Shoppers: What Should You Accept?
When starting an online store, you will have to make dozens of tough decisions. What platform should you use? How should you price your shipping and handling? And what eCommerce payment methods should you accept? While it may seem like a small decision, considering a variety of payment options for online shoppers will help you maximize your digital audience.
Why Offer Multiple Payment Options for Online Shoppers?
The main reason to offer multiple payment options is because it allows you to sell to a larger pool of customers. Online shoppers like the freedom to pay however they please, and accepting as many options as possible will maximize the number of customers who make a purchase.
In addition to thinking about the market as a whole, you’ll also need to think about your specific customer base. If you’re selling to businesses, schools, or local government, you may need to include options like eChecks. Taking your audience into consideration when you choose your accepted payment options will likely improve your conversion rate and minimize your need for customer service.
Common eCommerce Payment Methods
Up until a few years ago, online payment options were pretty simple: credit / debit card and PayPal. But these days, it seems like every tech giant and startup is hard at work creating their own online payment service. It can be easy to get overwhelmed by the laundry list of methods, but most of them fit into one of two categories.
Traditional Payment Methods
Traditional eCommerce payment methods are exactly what they sound like: traditional credit and debit cards, and PayPal. We’ve grouped these payment methods for online shoppers together because they are the ones that customers assume to be “standard.”
Credit / Debit Cards
Over half of U.S. consumers say that credit or debit card is their preferred method of payment online. Luckily, paying by card comes standard with most eCommerce solutions. Cards are a secure and simple way to pay online. They allow consumers to redeem points and rewards while shopping, and are likely to be the most popular method for years to come.
PayPal is another common eCommerce payment method preferred by one-fourth of online shoppers. Some shoppers prefer PayPal because it offers an extra level of security between their credit card and the Internet. This payment method is often built into standard eCommerce solutions, so it is typically easy to offer.
Alternative Payment Methods
In the past few years, we’ve seen all sorts of new payment methods for online shoppers across the web. Here are a few of the popular types of payments and the considerations you’ll want to make before choosing to offer them.
Over the past few years, it seems like every tech giant has created their own payment method for online shoppers. These options include, but aren’t limited to:
- Google Pay
- Apple Pay
- Amazon Pay
- Square Cash
While they go by different names, many of these options are nearly identical. Once set-up, they provide 1-click payments from your phone in stores or online. Some even allow you to pay from other smart technology, like the Apple Watch.
As eWallets grow in popularity, you may want to look into ways to accept them in your online store, especially if your demographic is young, tech-savvy professionals.
While check payment goes back to the 1700s, they are definitely a non-traditional method when it comes to payment methods for online shoppers. Online retailers typically go one of two routes when it comes to dealing with checks:
- They accept checks by mail and process orders upon receipt or clearing of the check.
- They offer some form of eCheck or ACH payment.
If you’re dealing with an older, niche audience, traditional checks may help you maximize your sales. That being said, eChecks are certainly a more modern route for accepting check payment online. While neither is a necessity for online businesses, consider your particular audience before removing them from your list.
Cryptocurrency is one of the least traditional payment options for online shoppers. However, it has grown in popularity over the past few years. While you likely don’t need to accept cryptocurrency payments to make a profit, you may want to familiarize yourself with services like BitPay. In the digital world, and especially with cryptocurrency, things can change overnight — and you want to be ahead of the curve when they do.
What Payment Methods for Online Shoppers Should I Offer?
As a general rule of thumb, offer the big three — debit cards, credit cards, and PayPal. This will prevent you from missing out on major sections of your customer base. From there, consider your audience. If they lean younger, consider integrating Apple Pay, Google Pay, or Amazon Pay. If you operate in the tech space, look into BitPay and cryptocurrencies. And if your audience leans older, consider accepting checks.
Payment Security in eCommerce
Ensuring secure payments is crucial to growing your base of loyal, returning customers. So whichever methods you choose, put security first. All payments should be processed over SSL with an https encrypted protocol. While you may be eager to include new eCommerce payment methods, take the time to understand each one and its security threats before implementing it.