If you are a small business looking to build an online shop you will need to address the question of taking payments for orders. You can, of course, request that a check payment be sent to you in the mail or accept bank transfers, but the easiest way is to accept payments from clients using their debit or credit card. If you already have an offline, bricks and mortar business, you may simply wish to have an online shop to process payments online easily. In this blog post, I reviewed PayPal, Stripe, Klarna, WorldPay and Amazon Pay and included their standard fees and the negotiated fees for the EKM customers using the standard plan.
There are some basic problems with these solutions and it all comes down to the way people shop on the internet. Customers expect to be able to add items to their basket and proceed to the checkout to pay. If they then find they must telephone you or print out and send their order, they may simply abandon their order and hop over to another website. Shopping online is all about convenience and if you are unable to provide this, you may be losing customers without even being aware of it.
New to payment gateway?
A Payment Gateway is an online tool used for taking payments online through eCommerce shops. A payment gateway is required to take payments for purchasing items online.
You will have to install the chosen payment gateway into your online shops’ checkout process. The way you do this differ from platform to platform but if you use an ecommerce platform like EKM you’d simply add your selected payment method to your online shop.
The payment gateway is, literally, a gateway between your shop and the customers bank. When a customer makes a purchase on your online shop, the payment gateway is instructed to take the payment from that customer’s chosen bank or card details and transfer the amount to your business bank account. The gateway would then verify the card details securely by encrypting sensitive details and ensuring that the data is passed from one party to the other.
So, what are your options and what is it all going to cost? Well, the good news is you can do it all very simply and cheaply. Keep reading this blog posts to see differences and similarities between different payment gateways.
Payment via PayPal vs other merchants
If you are looking to start selling online on your own online shop or to change the payment gateway you are currently use, make sure you check what fees you will have to pay per transaction or on a monthly basis.
Traditional merchant accounts are normally set up through your own bank and will become integral to your business account. Having your own merchant account gives you the choice of many different online payment gateways. Most, however, do charge a set-up fee, monthly fee and transaction charge, opposite to PayPal where you only have to pay per transaction and have a merchant account and a payment gateway in one place.
Just as you would offline, do make sure you research any company you sign up with on the internet. Print out and read their terms and conditions. Take particular notice of where they are operating from, their fees, when and how you will receive your money into your account.
PayPal is one of the more well known online payment gateways and is used worldwide with over 200 million accounts. The business accounts they offer can suit a wide variety of business needs.
Benefits for using PayPal:
- Affordable for businesses of all sizes
- Offers chargeback protection on qualifying transactions
- Accepts all forms of payment including credit and debit cards and PayPal payments
- Transparent pricing
PayPal Checkout offers a complete solution to accepting payments online. It combines the functionality of a merchant account and payment gateway in one, allowing you to accept payments and deposit funds into your bank account.
Paypal does not have a set-up charge and is a large and trusted online payment processor servicing 200 million accounts worldwide in 56 countries. Your only cost is a small percentage on each sale and a transaction charge. Payments from your website go straight into your Paypal account from where you can transfer amounts to your bank account with the click of a button.
PayPal fees are currently 2.90% + £0.30p per transaction. EKM negotiated a lower rate for their clients on the Standard plan.
PayPal Checkout allows customers to speed through checkout in just a few clicks, without having to fill out any additional billing information and offers a full dashboard for managing your payments, customers and refunds, which will stay in-sync with your orders within EKM. Another advantage of using PayPal Checkout is that you’ll benefit from PayPal buyer and seller protection which helps to keep both you and your customers better protected.
If you are looking for a platform to build your online shop on, try EKM – using this link you can receive 28 days free trial and a dedicated account manager to help you set it up. There is no setup fee and all you have to pay is a monthly subscription starting from £32.49 plus VAT. Send me an email if you need any extra help to get it started or have any questions.
The eCommerce platform EKM allows you to use either your own PayPal account if you prefer this payment gateway or integrate any other payment gateway like Sage, Stripe, Klarna or many others.
Stripe is another payment gateway that offers a fully online solution. As both a merchant account and payment gateway, Stripe allows you to accept payments and deposit funds into your bank account. Stripe also allows for the use of Apple Pay with your online payments which is a great option for customers who purchase mainly on mobile.
Benefits for using Stripe:
- Quick and simple set up
- A fully secure and seamless experience for shoppers
- Auto-sync with Stripe Dashboard for easy order management
- Fully compliant for PCI, PSD2 and Strong Customer Authentication (SCA) regulations
Each eCommerce platform has different agreements in place with the merchant providers. EKM has worked out a deal with Stripe so their customers can get the best rates possible. Stripe rates on EKM are 2.2% +20p on their Basic plan (cheaper than PayPal) and 1.9% +20p for the Standard plan and above.
Klarna is one of the most popular buy now pay later payment gateways. With over 4000 retailers accepting Klarna, including big clothing brands, Klarna makes sure that you always get paid while suiting your customers’ needs.
Benefits for using Klarna:
- Klarna takes all the risk so you always get paid
- 100% secure checkout
- Simple buying process making it easier for customers
- Hassle-free checkout
- Buy now pay later
- No chargebacks
- No return fees
Klarna can be included in your EKM shop with no extra monthly or set up fees. The Basic plan customers can get access for a 2.49% transaction fee, Standard a 2.19% fee and Advanced Plan receives a 1.99% transaction fee. This is an excellent value for money and a great tool especially if you are selling expensive products and want to give people the opportunity to pay in instalments.
With WorldPay, you’ll be able to accept payments from all major card methods as well as access to multi-currencies and world-class fraud screening.
Benefits for using WorldPay:
- Straightforward pricing with no additional or hidden fees
- Easy interface and real-time dashboard
- Stay in control with payment pages that are displayed to customers on your site
- Supports all major debit and credit cards
WorldPay has two simple options when it comes to their fees – a pay as you go plan and pay monthly plan. What you choose will depend upon the nature of your business.
Amazon Pay Review
Amazon Pay can make shopping on your online shop easier for customers who already have Amazon accounts. It uses their payment and delivery options within their Amazon account to complete purchases on your site, making the process quite simple.
Benefits for using Amazon Pay
- Keep customers on your site by not redirecting them to a third party website
- Accept payment easily and securely in line with your checkout experience
- Mobile-ready with no extra set up required
- Added protection with Amazon Payments
Amazon Pay Fees:
Amazon Pay fees are dependant upon the monthly payment volume going through the gateway. Their processing fee ranges from 3.4% for less than 1,500 to 1.4% for 55,000 and above. All have a 0.20 authorisation fee on top as well. The monthly payment volume is based on the total average transaction payment volume processed by Amazon Payments for the three months preceding the application date. You can read more into this here.
All about chargebacks
Another point to consider is the question of chargebacks. This happens when a buyer requests a refund of an amount already paid to you. Reasons include not receiving goods ordered or items arriving faulty, damaged or not as described. Sometimes requests are made if the buyer’s card was used fraudulently.
Read this article from Which to understand what is a chargeback and how it is used. It’s a useful thing to know as a customer or a seller.
If the chargeback request is successful, your merchant payment processor will charge you a processing fee. However, some companies will now provide you with insurance against chargebacks inclusive in your monthly fee.
It’s certainly worth shopping around for the right solution for you but knowing you have done your research will give you some peace of mind. Please leave a comment below if this blog post helped you in any way and share on social media.