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5 Things You Need To Know About Magento eCommerce Payment Methods

  • Written By Chris
  • Posted October 11, 2018
  • 5 minutes Read Time

Let’s be honest, customer expectations in today’s world are sky high.

Online shopping experiences need to be straightforward and fast, as consumers nowadays demand seamless payment processes and efficient delivery to boot. As a business owner, you have a responsibility to maintain a clear understanding of how your Magento store serves the end user.

With two-thirds of the global population now in possession of a smartphone, online shopping is already a massive industry and your site needs to be well and truly in the mix to have any chance of profitability.

Building eCommerce into your digital offering is straightforward enough, but here are 5 things you need to consider before choosing how to integrate it into your business:

Customer Preference

At the moment, there are a huge number of payment solutions available in the open market. That said, not all of these are practical to use or suitable for your business size/structure.

One of the best ways for you to choose a payment solution is to look at your customer base, as they are the ones that will be using it.

A great way to do this is by geographical location – for example, customers in the USA generally love to use digital wallets like PayPal and Apple Pay, whereas Europeans favour payments directly from their bank accounts. The Chinese will lean towards using mobile payment solutions like WeChat and Alipay, with other parts of Asia still keen on cash-on-delivery.

One of the best ways for you to choose your payment solution is to look at the needs of your customer base.

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If the location doesn’t work for you, look at audience demographics instead. Working-age customers should be able to finance bank accounts and even credit cards, so choosing payment services that support these methods would be wise.

Keep in mind that accommodating multiple payment methods can be costly, especially if you run a smaller operation on Magento, so consider prioritising the most popular payment process above other alternatives.

Transaction Security

Anything that involves money changing hands should have a significant focus on the security of both the funds being transferred and the data being exchanged.

Ultimately it’s the payment service provider who will maintain compliance with industry standards in your country, so check out who you’re partnering with to make sure they are in line with PCI Standards for example.

Another area to consider is fraud. Criminals will often attempt to check out as normal, but using a stolen credit card for example. If you are unlucky enough to process a fraudulent payment, you may be left with the cost of goods and shipping as most card companies will rule in favour of the cardholder in disputes cases.

Some payment providers will offer fraud prevention and chargeback protection, but often at an additional cost to you. This is where exploring the option of accepting cryptocurrency could be beneficial, as these transactions are irreversible and final.

Emerging Tech

On the topic of cryptocurrency, exploring these emerging niches is worth a moment’s thought. There is already a growing demographic of crypto-wealthy individuals who have made their money through Bitcoin and Ether investments. You could consider trying to tap into this market by utilising services such as Paybear which can help you process payments in Bitcoin.

The downside here is that cryptocurrency is an incredibly volatile currency and can often see double-digit swings within a single trading day. More stable versions are being worked on as we speak, and these would be much more suited for use within eCommerce.

If you’re keen to expand your market across multiple markets, possibly across borders or overseas, it makes sense to try and accommodate this type of payment if feasible.

Costs & Charges

It makes total business sense for smaller businesses to want to stick with cash – the costs are minimal and significantly less when compared to supporting other payment methods.

Card companies can charge anywhere between 1 and 3% per transaction, so the costs really can spiral quickly if business is good. Digital payment services that support card payments can often charge even more.

In most cases, payment service providers will offer a tiered charging structure that is based around the volume of transactions your business is making. This is where you can shop around to find yourself the best deal and start crunching the numbers to save yourself some cash.

Usability

As we mentioned earlier in this article, customers demand speed and convenience when checking out on an eCommerce store. With that in mind, it makes sense to check that your desired payments solution will enhance and not hinder your checkout process.

Faster page load time and fewer clicks should keep your customers happy, so try going through the entire checkout process yourself as a dummy run – what are your thoughts? You don’t want any new payment solution to bring more problems than solutions.

Summary

As the owner of a Magento eCommerce store, you are in the best possible position to understand the requirements of your business, in particular, what your industry and customers want to see.

The success of implementing any changes on your store hinges on this knowledge. Adding a new payment method can make or break an eCommerce store so take the time to evaluate your situation, check out all the possible providers and calculate the most cost-effective solution.

We’re always here to help if you need our advice!