Introduction

E-commerce has expanded across the world over the last decade and is continuously growing through the past few years. What brings all the e-commerce platforms on a common ground is the requirement of payment methods as it's a crucial part of the experience. As the market is growing, there are high demands of a range of payment methods and ultimately it's the businesses’ benefit to deploy a variety of payment methods to grow their performance. 

Setting up payment methods may look very cumbersome at first but it's an easy process if broken down correctly. Follow our guide where we take you through the factors to consider while choosing the methods and choosing what's best for your business.

Key components of online payment process

The key components of payment processing are - Payment gateway, merchant account and payment processor. These work together to facilitate digital transactions. Here’s what you should know as someone dealing with small business finances: 

1. Payment gateway

A payment gateway is a medium providing service which authorises and processes payments in online transactions acting as a bridge between the business website and the payment processor. When a customer makes a purchase and wants to pay, the gateway securely transmits the payment information to the processor which would further authorize and complete the payment. A payment gateway also covers the transaction process with protection, encryption and tokenization of the operations.

2. Merchant account

It is a kind of bank account that helps accept and process electronic payments for businesses dealing with day to day transactions. After the transaction is authorized through the gateway, the funds are held in a merchant account before they are finally transferred to the business’s bank account. Merchant accounts are a crucial part of business payments to accept credit card and electronic payments. 

3. Payment processor

Payment processor the pillar mediator between business, business’s bank and the bank of the payment issuer. Payment processors play an important role by handling the technical aspect of bringing the constituents together, this includes sending the right data to the appropriate card networks and banks.

Transfi provides the perfect tailored solution for small businesses keeping in check with the best of electronic payment benefits, it gives your small business a boost with time, labour and cost savings. 

How to decide which payment methods are apt for your ecommerce platforms

Choosing a payment processing method for your e-commerce platform is a crucial step, it  involves several checkpoints to be considered. One should evaluate the businesses specific needs before making such decisions; following are the factors to consider-

1. Customer preferences and market standards

You need to understand how your target customer prefers to pay for goods and services and figure out the competitive offerings and experience of available platforms.

2. Transaction fees 

Different platforms come with different setting up and processing fees which could be charged from the customers or be borne by the business itself. Eitherways, it's important to evaluate the fees and different costs of these platforms to choose the right one for your business.

3. Fraud protection and prevention 

When it comes to financial decisions for your business or e-comm platform, considering the security aspect is the first and foremost thing. Payment methods which use encryption, two factor authentication and comply by legal clauses are the best ones to go forward with.

4. transaction volumes and patterns

One should evaluate if the transaction activity is regular without much fluctuations or comprises high and lows across time. The payment platform must be able to handle specific needs which differ from business to business.

5. business model and industry specific requirements

different industries have different volume and nature of transaction requirements, one must find out what fits well with their industry and business model before choosing a payment platform. 

6. Growth and expansion 

If your e-commerce platform is growing constantly and is proceeding towards expansion, your payment processing should cater to the coming needs as smoothly as your present needs. It should have a scope of compatibility with higher payment processing, quicker resolutions and accommodating payment demands from across the world.

Transfi covers over 70 countries, more than 250 payment methods, easy integrations and a futuristic tap into stablecoin and digital asset payments opening a wide world of payment processing for your ecommerce platforms.

Reasons to offer different payment methods

There are five main reasons why every online business should be considering letting the customer decide which is the best payment gateway for their ecommerce purchases. The reasons for providing a choice of checkout payment methods are:

1. Maximise conversions

The biggest reason for offering multiple payment options is that it will help maximise your conversion rate. If you have a customer who wants to do business with you after they visit your site and add a product to their cart, then the last thing you want to do is put them off by only allowing a limited choice of payment methods.

2. Minimise abandoned carts

If your business is experiencing a significant amount of abandoned carts, then a limited amount of online payment methods may be partly to blame. There are other reasons why carts get abandoned, such as shipping fees bumping up the cost to the customer to higher than they are willing to pay, or window-shoppers adding items to a cart to remember them or just check what the shipping and payment options are without any real intention to follow through. But a lack of different payment methods contributes to the issue.

3. Appeal to wider demographic

Different types of consumers have different preferences for their favourite or best payment gateway. Some will prefer to pay with their debit card like they always have, while others will exclusively purchase items online via a digital wallet like PayPal. 

You can’t always separate demographics via their chosen payment methods either, although younger shoppers are more likely to use digital wallets. It mostly comes down to habit, with many younger people still preferring credit or debit cards, and many older people fully on board for the digital revolution. It is much better for every business to maximise their chances of a conversion by providing for all the different customer preferences.

4. Easy checkout for customers

Providing multiple payment methods also makes the checkout easy for your customers, as the best payment gateway for their own personal needs will be there waiting for them. They can click through as they please to purchase via a digital wallet, or enter their credit or debit card details as they prefer to do. A hassle-free purchase improves the customer experience and thus will encourage them to return and buy again.

5. Enhanced brand perception

The last major benefit of offering various online payment methods is the credibility it lends to your business brand. When a customer sees multiple payment options on their checkout screen, it makes your website appear professional, trustworthy and secure.

The best payment solution for your ecommerce platform

Transfi is the ultimate payment gateway for freelancers, ecommerce platforms, businesses and developers. You can use Transfi to get paid from anywhere in the world and securely send money everywhere. Online platforms can use it to receive payment securely without any hassle. Compared to other international payment methods, Transfi only takes a few minutes to process your money in the most secure form. It provides multiple payment methods to the customers giving them the independence of choosing their preference. Benefits of using Transfi are as follows;

1. Quicker transactions – customers can directly pay in their desired currency and payment methods eliminating the time and effort of multiple platforms and long waiting times. 

2. Low costs – Currency conversion via banks can incur high fees. Transfi helps with these transactions with minimal fees and no hidden costs unlike other platforms.

3. User friendly interface – Many customers come back for your products and services if you are up and running with your payment methods in an easy to navigate interface.

4. Seamless international payments – Transfi can be integrated in your website or any other websites to carry out seamless less effort transfers. 

Transfi’s payment processing provides a one stop solution for all your international payment needs, it is easily accessible and does not require a multi step - difficult process to make payments.

Conclusion

TransFi’s  innovative approach to payouts simplifies, accelerates, and reduces the cost of accessing payments on any ecommerce platforms worldwide. Are you sick of poor exchange rates and payment delays and cart abandonments because of limited payment methods? If done right, receiving money from people all across the world in local currency is simple, hassle-free, and stress-free. Make TransFi your choice for payment processing and get rid of any hassle. Set it up once and stop worrying about withdrawing or receiving your payments on time. 

Frequently asked questions (FAQs)

1. What are the factors to consider while choosing a payment platform for your online business?

• Customer preferences and market standards
• Transaction fees
• Fraud protection and prevention 
• business model and industry specific requirements
• Transaction volume and patterns
• Growth and expansion 

2. What is the best payment system for an ecommerce platform?

The best payment system for your online business will depend on your unique needs. We encourage you to do your research to find the system that fits your goals and requirements. Our platform, Transfi, offers small businesses the most comprehensive, end-to-end financial operations system with global reach. We offer multi-currency accounts that make it quicker and more cost-efficient to help you accept, hold, and make payments internationally.

3. How do you set up an online payment system for an ecommerce platform?

To set up an online payment system for your small business, partner with a payment system provider for end-to-end support. Make sure the provider you choose includes a merchant account, payment gateway, and payment processor. If you plan on accepting payments online on your website, build a payment form or payment page, and ensure that your provider meets compliance regulations.

4. What is the best way to accept payments for online platforms?

Offering flexibility is key. Most customers expect to pay using cards, bank transfers, or digital wallets. Transfi makes this simple with hosted checkouts, payment links, and plugins. You can accept local and international payments without needing multiple systems or complicated setups.

5. Why should an online business offer multiple payment options?

• Maximize conversions
• Minimise abandoned carts
• Appeal to wider demographic
• Easy checkout for customers
• Enhanced brand perception