5 surprising things electronic payment services can do for your business
As a small business owner considering electronic payment services, you may wonder if investing in such an endeavor will pay off. After all, aren’t electronic payment services designed for larger enterprises? Not necessarily. With digital retail sales projected to reach $632 billion by 2020, and eCommerce spending up by 23 percent year over year, small businesses have just as much opportunity to benefit as their larger counterparts.
If you have not yet implemented electronic payments for your business, you’re not alone— 46 percent of American small businesses do not even have a website, and only 26 percent of small businesses have an ecommerce site. So why should you start accepting electronic payments? What do you need to do to accept credit cards online? What are some of the main challenges with online payment processing? Stay with us as we explore these questions so you can choose the right merchant services provider for electronic payment services.
Why accept electronic payments
For purposes of this article, when we talk about electronic payments, we are referring to payments made online. There are many reasons why it makes sense for a small business to accept electronic payments. Here are the top five:
- Reach more customers. More and more consumers are shopping online. BI Intelligence reports that 224 million consumers shop online, up nearly 20 million from 2015 to 2016.
- Sell more. All this online consumer traffic is driving sales. The National Retail Federation projects an 8-12 percent increase in eCommerce growth in the U.S. in 2017.
- Meet consumer demand for a consistent experience across sales channels. Today’s consumers are combining their online shopping with other channels. The majority —73 percent—are omnicommerce shoppers whose buying journey encompasses online, instore, and even direct mail experiences.
- Enhance security. The migration to EMV has raised concern about fraudsters targeting online transactions instead. But many of today’s eCommerce solutions incorporate enhanced payment security measures to help protect against data breach and fraud.
- Increase productivity. By automating certain business processes, eCommerce saves time and effort. Easy online payments reduce—or eliminate—manual tasks such as data entry, processing paper invoices, and managing customer disputes.
What you need to accept credit card payments online
So you’ve decided to begin accepting payments online. Where do you start? The best place to begin is by reviewing your business needs.
First, do you have a website? If you do, you’ll need an online payment solution that makes it possible for your site to accept payments. This is most commonly in the form of a shopping cart with checkout functionality. One of the ways to accomplish this is with an ecommerce payment gateway that connects your website to your payment processor. If you don’t have a website, you’ll need a merchant services provider that can build one for you with all the necessary features. Here are seven questions to ask potential providers:
- How long will it take to set up my site and begin accepting payments?
- What type of navigation tools will the site offer (e.g. search bars and filters)?
- What payment types will I be able to accept in addition to credit and debit (e.g., gift cards, ACH, e-check, and mobile wallets for in-app experiences)?
- Will this solution integrate with my other business applications such as inventory management and accounting programs?
- What type of notification features does your solution provide (e.g. order and shipment confirmations, easy returns)?
- Will the site translate well from desktop to mobile platforms?
- What types of payment security tools does your solution offer (e.g. Address Verification Service (AVS), fraud screening, chargeback prevention, and tokenization)?
3 challenges of online credit card processing
As with any business system, electronic payments pose some challenges. Here are a few, and ways you can address them.
- Shopping cart abandonment: As easy as it is for consumers to shop online, it’s just as easy for them to leave a site without completing their purchase. Business Insider reports that shopping cart abandonment is increasing and that $4 trillion worth of merchandise could be abandoned in one year alone.
- Fraud: Thieves always follow the money, and with more online spending comes more potential for fraud. Small businesses can employ technology and best practices to help prevent and reduce the instances of fraud. AVS is a valuable tool which validates the identity of the cardholder by verifying the cardholder’s billing address with the card issuers. In addition, tokenization and encryption technologies are proven ways to protect against theft of sensitive data.
- Chargebacks: Some merchants view chargebacks as simply a cost of doing business. But in reality, chargebacks can result in big losses to a business’s bottom line, as well as to their reputation. eCommerce chargebacks happen for a few reasons. They can be due to fraudulent activity, but can also happen when a customer does not receive the products they ordered, or when they are unsatisfied with their order.
But there are ways for small businesses to help prevent shopping cart abandonment. These include letting shoppers know about shipping and return policies upfront, simplifying the checkout process, sending reminder emails to customers who have not completed their checkout, and providing easy customer service via email, chat, or a dedicated toll-free hotline.
Best practices businesses can take to reduce fraud include being diligent about passwords (e.g. changing default passwords, not sharing passwords, granting systems access to select individuals), ensuring firewalls are in place, and keeping antivirus protections up to date.
Prevention is the best medicine for chargebacks. Using package tracking and delivery confirmation can help prevent undelivered goods chargebacks. Providing detailed product descriptions and customer reviews can help reduce customer dissatisfaction. And posting product shipping, delivery, and return information clearly on your site can help set customer expectations before the sale.
Getting started with electronic card payment services need not be overly complicated. By familiarizing yourself with the ins and outs of ecommerce payments, you can begin taking credit cards online and offer a valuable service your current—and future—customers will appreciate.