"Which payment gateway?" is always a hot topic for new shop owners. There’s lots of options with various providers so it’s easy to get confused. It’s not so bad with a little help though...
First things first - what is a payment gateway?
A 3rd party provider used to process payments on your shop. Some work differently to others and there’s plenty to choose from on ekmPowershop.com. They all have one thing in common of course - they collect your money!
That’s the basics covered, now we’ll move onto the ‘merchant account’, it’s where the befuddlement begins for lots of shop owners...
What’s a merchant account?
A special type of bank account for businesses accepting credit or debit card payments. Any business with a chip & pin card machine for instance (such as a garage, newsagent, restaurant etc.) will have a merchant account. Usually a merchant account comes from your bank.
You don’t necessarily need one!
Especially not to begin with, provided you just want to process payments on a website (transactions where the cardholder isn’t present).
The following payment processors don’t require a merchant account to use them, they work with any normal bank account and they’re fully compatible with your ekmPowershop:
It’s worth highlighting all of the above have no monthly fees. Ukash is a bit different, as it’s not for card based payments. PayPal’s the biggest exception though as it’s a bit of a hybrid - it does e-wallet and card payments. We’ll cover PayPal and Ukash later on.
So why all the talk of a merchant account?
There’s lots of payment gateways available on ekmPowershop.com. Aside from the few listed above, all the others require a merchant account to use them.
Why bother with a merchant account?
Gateways requiring merchant accounts are generally cheaper on transaction volumes when you get to a certain size, even if they do have a monthly cost attached. We recommend one of the following as they always do a good deal for ekmPowershop customers :)
They work with a merchant account from any bank. They’ll also take care of the merchant account if you don’t have one, and you’ll get around 300 - 400 transactions per month for the £20/£25 fee.
Payments isn’t just about card processing!
We haven’t really covered the most important ingredient of all... PayPal. PayPal's different because it’s more than just a payment gateway. It’s a payment format all on it’s own, just like credit cards, debit cards, cash, cheque etc. More on PayPal next in our ‘5 steps to payment perfection’...
5 steps to payment perfection
1. Use PayPal
It's the biggest e-wallet in the world, and more importantly it's dominant in the UK. Consider how many people you know use and love the option because there's no messing around entering card details, chances are you do it yourself. Fact is consumers choose to pay using PayPal before Visa or Mastercard when they shop online, so don’t trade without it. It’s quick, convenient and secure... a shopper’s dream checkout! So much so you stand to gain around 15% conversion by offering it.
2. Offer straight credit/debit card processing too
Taking the PayPal option does allow your customers to pay by credit/debit card if they want to. Problem is not many people realise this thanks to the huge popularity of the brand's e-wallet. So you may want to look at one of the others above such as Skrill or Google Wallet in addition to PayPal - just to be sure your customers are 100% aware they can pay using the usual card formats. Uncertainty at the checkout should be avoided at all costs!
3. As you grow the merchant account route works out cheaper
Systems like SagePay or CardSave work out to be very competitive on charges when you're generating regular orders and volumes (remember, these are the gateways which require a merchant account). As mentioned earlier, there’s usually a decent offer running for ekmPowershop.com customers by either of these providers, so it’s always worth mentioning you use us for your online shop.
4. Don't remove PayPal, even if you don’t like the costs!
As your volumes grow it’s tempting to save money on payment processing fees by putting everything through another gateway. It’s a common mistake and it’s easy to do if you see payment processing as a utility or an overhead which must be squashed to it’s absolute lowest point. As you generate more sales, you're actually touching more PayPal/e-wallet users so it’s vital you stick with it to maximise conversion.
5. Offer alternatives to cards and e-wallets like Ukash
Cash payments are becoming more popular as bad credit shoppers, young shoppers and older shoppers embrace online shopping. As the internet gains popularity, more of these demographics are hitting your shop. They may be minorities, but say you get 100 customers in a day... you'd be surprised how many want the alternative option. So the new integration with Ukash is worth a look.
Payments is as simple as getting paid for orders placed on your shop, so long as you keep an open mind on offering choice. The customer is king so choice is key to conversion. Don't pigeon hole your checkout into offering a single method/option and always offer PayPal... then you’ve cracked it!