Online Stores on Invoice
Ordering in online stores is easy: the customer goes online, looks for the right item and puts it in the shopping cart. Payment is then made. But customers often have concerns about what happens to their money when they buy online and whether they will actually receive the goods they ordered. Many online store operators offer customers a mix of payment options to make payment transactions as convenient as possible. If care is taken to ensure that customers can order on invoice in online stores, their security concerns can be addressed.
Why purchase on invoice?
Many consumers regard purchase on invoice as the most customer-friendly payment method. It is already familiar to them from offline retailers and catalog orders. In addition, many customers are used to receiving their goods first and then paying for them. Therefore, if an online store decides to offer invoice as a payment method, it will have the following advantages:
- Purchase abandonment rate drops before checkout
- Higher shopping cart values generate more sales
- Security of customer data is guaranteed
The last point is important not only for the customer, but also for the operator of an online store. After all, he bears responsibility for his customers’ data and must ensure that it is not revealed without permission through attacks on the payment system. Since websites are being hacked more and more frequently, secure payment solutions are indispensable.
Implementation of purchase on invoice for online stores
In order to implement online purchase on account, there are two options for the merchant. On the one hand, he can manage it under his own direction, which means that the merchant himself is also liable for a payment default. Another option is to commission a full-service provider. This service provider often takes over the entire invoice processing and offers all the necessary procedures and processes that are crucial for the purchase on account. These include identity and credit checks, risk management, dunning and payment risk.
Risks for merchants
Although the merchant has advantages when offering purchase on account as a payment method, he must also weigh up possible disadvantages. A payment default by the customer is a risk to be taken into account. Smaller online stores in particular suffer when customers order and receive goods but fail to pay the agreed amount by the agreed payment deadline. In addition, customers who purchase on account may make an increasing number of returns. In some industries, goods are returned more frequently than in others. To protect themselves from mass returns, retailers often charge a flat service fee for purchase on invoice. However, this makes the payment method less attractive to customers.
Costs of the purchase on invoice procedure
The inclusion of purchase on invoice is not free of charge for the merchant. In addition to the costs incurred for non-payment or returns, there are also costs for payment processing and pre-financing of goods. However, a full-service provider can cover the merchant’s expenses for identity and credit checks, and will also pay for any shortfall due to defaulting customers.
