Providing varied ecommerce payment methods is the key to a successful online business. Because it is defined as the electronic exchange of goods and services, ecommerce's most essential component is allowing consumers to pay for services rendered.
Because ecommerce exchanges take place online, the use of cash is inconvenient. It is possible in certain instances to use cash on a cash-on-delivery basis, but this example is the exception and not the rule. Most of the time, payment is as virtual as the Web site. Let's take a look at the most common ecommerce payment methods:
Credit cards are still the most popular form of ecommerce payment, especially with big-budget items like hotel reservations or airplane tickets. The ability of the business to accept at least two of the major credit cards (this includes Visa and Mastercard) instantly makes its ecommerce Web site more accessible to the consumer. Credit cards work on behalf of the consumer and are more secure against identity theft and other types of fraud. With the convenience and security, chances are good that the consumer will use a credit card on your site.
Since its 2002 acquisition by eBay, PayPal has become a household name. Many consumers prefer PayPal over credit cards for the added security of not needing to provide a credit card number. PayPal is business-friendly and offers a robust ecommerce merchant account that allows businesses to accept credit card payments, send out invoices and dispute charges. PayPal doesn't require that its users have credit cards. This option is particularly useful for consumers who do not use credit cards but who still want to purchase online. Without the option to pay via PayPal, you will lose valuable consumers who either cannot or will not use a credit card.
Bank Draft / Checking
This is the least popular option of the three. Some companies, such as utility companies, offer to debit consumer's bank accounts. Although this is acceptable practice for a select few businesses that provide continuous service and a high level of security, this option will not go over well with businesses that provide a one-time transaction. Determine which of these options will best suit your business. It may likely be a combination of the three.
Interested in building ecommerce Web sites? You'll need to start by choosing a hosting service that offers helpful ecommerce features.