Top Payment Methods for Your Ecommerce Website
Most people today use e-wallets for purchasing online without even thinking about it. Paypal, Skrill, Payoneer - everyone has a preference and usually for a good reason. Sometimes it’s just minute differences in fees and transaction speed, and sometimes it’s location based limitations or benefits. Either way, every ecommerce owner should be very sensible to these e-wallet preferences because it makes all the difference. That’s why we’re presenting you with a comprehensive list of top payment methods for ecommerce sites, and a detailed description for each one.
Opening an ecommerce website is such an exciting experience. Whether you want to sell your own arts and crafts or go into business with a wider target group, ecommerce is offering unlimited possibilities and can be very lucrative. But there is a lot of homework to be done before you start earning.
First of all, you have to think about the options you’re giving to your customers. People prefer to use apps and services they are familiar with, and don’t want to spend an eternity going through the checkout process. The less clicks, the better.
Even though it might seem like a waste of time (and money) to offer so many different payment methods, the math behind it proves otherwise. The astonishing 70% of online purchases are abandoned before completion. Most common reasons listed among the surveyed customers were that they didn’t find their preferred payment method, didn’t trust the site with their personal data and found the checkout process to complicated/long. The list of payment methods you’ll find below covers over 95% of the consumer market, and can give you a good idea of what you need to offer for your customers to feel safe and comfortable.
Choose your ecommerce platform wisely
Top ecommerce platforms in the past 5 years have not changed much. WooCommerce is leading with one quarter of the entire market, although Shopify is a name you are much more likely to hear in this business. Magento is right behind them with one fifth of the market, and these giants combined offer a place for 55% of the total number of virtual stores. Other big players such as Wix, ZenCart, BigCommerce, Gumroad, Jimdo, LemonStand, Volusion, OpenCart, 3dcart, Squarespace, Selz, Storenvy, Weebly, E-junkie, SendOwl, X-Cart and FoxyCart share the rest of the market.
So why is this important for your business? Because they all offer specific payment gateways and it’s your job to choose which one offers just the right mix for your target group. For example, WooCommerce offers over 60 possible gateways combined (the number varies depending on the country) and with your research done right, the right choice of payment gateways can cover almost 100% of your customers’ needs.
Know your customers
Another important variable in choosing an optimal number of payment methods is knowing your target group. Location is the most important one, but so is the type of your ecommerce, the age group of your customers and what you’re actually selling.
Make sure to consider the following factors:
Are you shipping worldwide or is your target group localized?
If you intend to keep your sales lokal, you might be able to go around some pricey payment methods by choosing the most popular local payment gateways. If you plan to ship globally, don’t be skittish. Invest a bit more into payment versatility and it will definitely pay off in the long run.
How risky is your business?
Now, be realistic here, it’s for your own good. Owning a high risk business doesn’t necessarily mean it’s in the “gray” area, it just means they might need more investment to begin with or are highly volatile. Public image also pays a big role here, especially for businesses connected to the tobacco industry or gambling. So what exactly is the problem here? Many online payment providers might straight out refuse to offer their services to you. It’s a good idea to research this before you start, just to have a general idea what you can expect.
Who is your target group?
If you own a specialized ecommerce business, it is essential to do target research. For example, if you are selling software, high-end electronic gadgets and anything that draws in a more tech-savvy audience, you should definitely consider offering cryptocurrency payment methods. On the other hand, a more old school target group will probably go with traditional methods like PayPal, Skrill or good old bank transfers. Furthermore, if you ship worldwide and a significant portion of your target group is in a specific part of the world, think about currency support and conversion fees. For example, if your customers are from Russia, they will prefer Yandex Money or WebMoney over PayPal, Payoneer and other popular e-wallets.
Do you offer dropshipping?
A large part of the e-commerce market consists of dropshipping businesses, and for a good reason. Dropshipping is extremely flexible, adapts to the trends almost instantaneously and gives you a lot of freedom… if you know what you’re doing. Dropshipping doesn’t mean you’re getting the money while someone else handles the goods and payments - you will have to take care of the orders and provide customer service, while offering the best and most versatile payment methods for your target group. At last, think about your profit margin and what you can offer to customers that is so appealing they’ll want to do business with you, and not directly with the vendor.
Top payment methods for e-commerce
There is a lot of versatility here, but don’t get scared. It might seem a bit overwhelming and tedious, but if you research your market well, choosing the right payment method is actually the best way to skyrocket your business.
Getting more and more popular, e-wallets are becoming a primary choice for online payments. Here is a list of the most reliable and popular ones.
- PayPal. More than 200 million people use this platform worldwide. This is the obvious upside. The downside is relatively high fees on both ends. This one is a definite must for all worldwide sellers.
- Stripe. Although mostly used in the US, UK and Canada, Stripe offers its services in more than 25 countries. Supports both online and in-person payments.
- Square.If you already have a physical store, this is a fantastic option because you might already have a Square POS system. In other words, Square merges everything and keeps it simple - online payments and in-person payments.
- Skrill. This e-wallet is available in more than 200 countries but gained the most popularity in Europe. If you plan to do business overseas, it should definitely be included.
- Payoneer. Another e-wallet popular in Europe, but offering services worldwide. Many customers love it because of the low transaction fees and the widely accepted Payoneer card.
- Apple Pay. Gained massive popularity in recent years and is currently on the top of the e-wallet list in the US and Canada. There’s a good reason for it - the customer literally needs to click once. Easy-peasy.
- Google Pay. Similar to Apple Pay, and just as easy to use for both you and the customer. The cool thing about this method is that it can be integrated with other ones already supported by your ecommerce platform, such as Stripe and Square.
- Amazon Pay. What is one of the biggest worldwide platforms for online purchases? Yes, it’s Amazon. If you plan on opening an e-commerce store, it is very likely that your customers already know and use this payment method, so is undisputedly one of the most popular sites across the whole web, and one that almost all your customers will have accounts with already. It is very easy to set up and affordable to the seller.
- Alipay. When it comes to the Chinese consumers, this is your go to option. More than 50% of the total online purchases in China have been done through this method.
- Yandex Money and Web Money. Great options for the Russian and Ukranian market. Many platforms support them and they are very well integrated and easy to use.
- Masterpass. An e-wallet for Mastercard holders. Makes the whole process of checkout on-site way easier for the customer.
- Visa Checkout. Just like aforementioned e-wallet, but for Visa users.
- 2Checkout. Extremely versatile because it supports all major credit cards and offers services in developing countries, too. It can also be combined with other payment gateways to override high transaction fees and currency conversion fees.
E-wallets are gaining popularity, but credit cards are still very much alive. Here is a list of the most popular and safe credit cards worldwide and locally.
- American Express
- Union Pay
- Diners Club International
Old school but still alive and kickin’. For one reason or another, many customers still prefer this way of doing purchases so it’s a good idea to have it as an option.
When it comes to ecommerce, the formula is as simple as it can be. Research the trends, cater to the target group and secure profit margins. But don’t think the initial costs will be much lower than opening a physical store - after all, enabling so many payment methods comes with a lot of monthly fees and an obligatory sail fee (plus a fixed amount) which all go to the payment gateways.
Choose wisely, and start with only 3-5 essential platforms. It’s easy to expand when you have a solid base, but if you don’t offer an appealing payment method to begin with, your business will never grow. Choosing payment methods wisely is crucial for every ecommerce business.