On many occasions during my conferences I have been asked about this topic, which leads me to think that the concern of users and consumers of products that are marketed in Online Stores for payment methods is high and one of the main causes of cart abandonment.
That’s why I wanted to make a brief review of the main payment methods that we can find in our usual e-commerce, and some alternatives to them that, in most cases even causes a better shopping experience and especially sales, although not all of them are understood in the same way.
The most widespread and used is the Virtual POS. The necessary technology is provided by the bank of confidence of the seller, and even provides the necessary, through platforms such as redsys.es for implementation in any E-commerce. Its use is so widespread due to the confidence that exists in this form of payment, the confidence in the bank with which it normally works, and the low commissions (between 0.6% and 0.85% of the total transaction). There are several types of card payment, but the most used is the Triangular Payment, where the e-commerce owner does not know or store any information of the credit or debit card that the customer enters into the payment system. The way it is implemented is under SSL (Secure Sockets Layer, or SecureSockets Layer) in the bank’s own gateway, that is, when the customer is going to enter the credit or debit card.
The credit card is the oldest existing system for e-commerce payment, which is still the most widely used today.
The credit or debit card is the oldest existing system for e-commerce payment, which is still the most used today. When the customer enters the credit or debit card on the web, he will do it, although graphically is part of the same store, on a page of the bank (through its platform such as redsys.es), so the owner of the store can not know or store any data, thus avoiding possible frauds. In addition, this gateway does not have information about the type of product or the shipping address of the buyer, as it is irrelevant to the transaction.
Cash on delivery is used when the website is usually new and you want to generate an initial confidence, and always with non-perishable products, since the customer pays at destination when he receives the package, and if the product is perishable and the customer decides at the last moment not to pay, in addition to losing the shipping costs, the product is also lost. In addition this form of payment also involves a high commission by the courier company, and also that it pays all payments to the Online Store that are made cash on delivery once a week, so it is not immediate.
Paypal as an alternative secure payment is the most used system for a long time.
It belongs to the multinational Ebay, and was used as a platform to guarantee transactions in auctions, and even returns if the product did not meet the expectations generated. Gradually it was extended and today it is one of the most used payment systems. To understand it more simply, Paypal acts as an intermediary between buyer and seller, so that the seller only receives the amount of money for the product and an email from where the payment has been made. The seller cannot know neither the account number, nor the name, surname, address or other personal data of the buyer.
Its ease, its fame, its agility and operation collide head-on with the high commissions that PayPal charges to sellers: 3.4% of the total transaction plus a fixed amount of €0.35 as long as monthly sales do not exceed €2,500. If it does, the percentage commission is reduced to 1.9% for monthly sales over £100,000. Therefore, many E-commerce owners look for alternatives withbetter conditions, such as the aforementioned POS, but very few ignore this payment method, as not offering it can result in the loss of a customer or even a “not good” online reputation.
The bank transfer is still offered on most websites, but it is used in a lower percentage because of the high commissions that banks charge for transfers to individuals, so many prefer alternative forms of payment that do not generate that cost. In addition, paying by bank transfer in an e-commerce increases the number of days to receive the product, because the company that receives the payment will not process the order until it has registered the payment in its accounts.
In spite of the good roots of “conventional online payment methods “, new ways of paying for purchases on the Internet have emerged, with Bitcoin standing out above the rest.
Bitcoin is not a form of payment, it is a new currency that is revolutionizing the Internet world.
Bitcoin can revolutionize online payments. It is not a bank, nor any intermediary company, nor any investment fund. It is a new currency used exclusively on the Internet. BitCoin is called to be the Online Currency, the most used in transactions on the large network, whatever its nature or purpose, as Bitcoin can be used for any type of transaction, whether to pay for a product in an Online Store or even to send money to a family member or friend. To have BitCoins you have to buy them from someone who has BitCoins and wants to exchange them for Euros. Currently 1 BTC is exchanged for 365,79€ as of September 2014. However this figure has been growing exponentially since a few cents was exchanged in 2009 when the new currency was invented. Whoever bought 5,000 BTC in the year of its founding paid only about £15 and today those 5,000 BTC are worth £1,828,974.56.
This deflation of the new Internet currency makes many experts and most banks begin to investigate its use, and this suggests that it will undoubtedly be the currency and the most widespread method of payment by the network. In addition, the commissions for transfer or payment are zero, only charged in those payments involving a very small number of BTC, which are counted to 8 decimal places. Nowadays with FCN technology a person can receive BTC paymentsjust by putting two phones together.
This is the end of the first part of the article. In the second article we will talk about other alternative payment methods such as Trustly, Amazon Payments, Google Wallet and above all Apple Pay, the new payment platform presented by Tim Cook together with two other products of the brand which he totally eclipsed. Add your email to the newsletter and we will inform you when it is published, as well as receive exclusive content and tips.