The online payments industry gives you lots of choice
When you’re getting your ecommerce website up to scratch, arguably the most important factor is your payment processors – without this set up, you won’t ever receive a penny. So before you’ve finished designing your homepage and the rest, you need to get down to the nitty-gritty of online payments.
When you’re researching online payments you’ll probably hear the terms payment gateway and merchant processor. The two refer to two different services:
Payment Gateway: This is the middleman between the merchant and their bank. It is the system used to transfer a customer’s payment information securely from a retailer to their account.
Merchant Processor: The merchant processor is the system that communicates with the payment gateway, a customer’s credit card network and the merchant’s bank account.
Luckily to save confusion and lots of extra work, most of the payment solution companies work as both of the above entities so you never really have to think of them as separate.
When weighing up the options for payment partners, there are certain details you should take into account. What is the set up fee? Monthly fee? Per transaction fee? Is there are contract? What are the refund or international fees?
Before you approach any of these service providers you need to have a merchant account set up with your bank. They will give you an ‘internet’ merchant number which you will need to set up the payment solution.
The answers to these questions differs from merchant to merchant so get your quotes in order before you make a decision.
So what are the options regarding online payments? There are many out there but here’s our pick of the bunch:
PayPal: This is by far the most popular option for online retailers and one that customers will immediately recognise and therefore trust. It can have relatively high transaction fees but has a merchant rate which you can apply to pay if you’re processing over £1,500 per month. It also has no set up or monthly fees.
GoogleCheckout: Having a complicated checkout system can turn users off as we all know. Google has tried to cash in on this by providing its own answer to PayPal and allowing users to pay for goods and services through an account connected to their Google profile – simplifying it for them. It too is free to set up and you can actually use your AdWords account to lower Checkout transaction fees.
SagePay: Another popular option in the UK and as you might of guessed is owned by accounting software giant Sage. The application process and technical integration is fairly simple. There’s no set up charges and competitive transaction fees. You can use SagePay only as a payment gateway with a separate merchant processor or as both.
WorldPay: Formally owned by RBS, WorldPay is another well-known player on the scene. It’s known for its great customer service but this can come at a slightly higher cost than other options. I’ve actually seen it described as the Harrods of payment options.
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