Payment Method
In the online store, the customer places his selected items in the shopping cart and takes them to the virtual checkout. This is where the decision is made as to whether the purchase will actually be made if the desired payment method is offered. The selection of payment methods in e-commerce is currently already very large and is constantly growing with new e-wallets, online payment systems and checkout systems. The most important payment methods are prepayment, credit card, direct debit, cash on delivery, purchase on account, instalment purchase and cash payment, which are also available offline. These are supplemented by online payment methods such as PayPal, Sofort, giropay, payment via Amazon and many more, which can also be country-specific such as iDEAL, eps, Multibanco, Przelewy24, Bancontact or Carte Bleue.
E-payment involves, on the one hand, the right choice of payment methods and, on the other hand, practical, technical integration into the store system or the online merchant’s website. The integration of payment methods requires either a great deal of effort on the part of the developer or the use of a ready-to-install payment gateway for one of the common store systems, CMS or ERP systems. It is important to ensure that all sensitive customer and payment information is entered via an SSL-encrypted connection and that a PCI DSS-compliant module is used for the credit card payment method, possibly in combination with the 3D Secure procedure.
Each payment method carries different levels of risk for online merchants and end customers. The online store operator can help himself in advance with fraud prevention and, in the event of non-payment, have the defaulting amount collected by a debt collection company. Depending on the payment method, the end customer has different options for getting the money back if the goods are not delivered or not liked. With direct debit and credit card, an objection is possible. PayPal, Sofort, payment via Amazon and others offer buyer protection. And with invoice, the goods are returned without paying for them. The latter is the reason why purchase on account is the most popular payment method in Germany. “First the goods, then the money,” this gives customers complete peace of mind because they only pay if the goods arrive and they like them.
This in turn ensures that online retailers hedge heavily as soon as purchase on account is to be offered. A payment guarantee offers the online store the advantage of calculable income. The risk of non-payment is completely transferred to the payment service provider who issues the guarantee. The payment guarantee is common for direct debit and purchase on account payment methods and is becoming increasingly popular in the e-commerce industry. In terms of e-payment, a store must also remain competitive and plan for certain higher costs for payment processing so that customers remain loyal to it and new customers do not migrate to competitors.
