Online Payment Services
Online payment services allow business and consumers to exchange money electronically over the Internet. With an online payment service, your business can receive payment from virtually any customer with an email account. Online payment services have recently become very popular with businesses and consumers. You’ve probably heard of many of these services, like Paypal, Google Wallet, Apple Pay, Skrill, Dwolla, and Stripe.
Advantages of Online Payment Services
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. From a customer-service perspective, it’s beneficial to have multiple payment options available. Online payment services are also user-friendly and can simplify the payment process by storing customer card information or billing customers at a later date.
Disadvantages of Online Payment Services
As with all payment methods, online payment services have their drawbacks. Most of these services redirect customers to a payment service website to complete a transaction. Being forced to leave your business’s website can be confusing for customers – especially those new to online shopping – and could make them abandon a purchase they may have otherwise made.
Your business may not get enough value out of offering both an online payment service and accepting card payments. On the other hand, limited payment options may turn some customers away. Finding the right balance of payment options is something that is unique for every business.
Major providers of online payment services 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, making third-party scams rare. As e-commerce becomes more popular, security features will continue to evolve. Be sure to research service provider plans for the most current security technology.
Shopping Cart Services
Online payment services require a virtual shopping cart. Virtual shopping carts 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.
Some online payment service providers offer free shopping cart services to businesses. If your online payment service does not provide a free, secure shopping cart option, third-party shopping cart services can be used.
Content courtesy of the Small Business Administration at http://www.sba.gov
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