It’s hard to know where to start when it comes to online payment services. As a retailer it can feel a bit like a scam. You spend a lot of your time and money making a quality product but now there’s Paypal, Google Wallet, Apple Pay all jumping in for a slice of your profits. Not to mention what you might lose by choosing the wrong one. You have to do your research. Thankfully, there’s a lot of info out there.

According to recent data, 72% of Australians have utilised some form of online payment service. The dominant services seem to be Paypal and Bpay, utilised by 42% and 59% of Australians respectively. But newer services like Afterpay are on the rise with more than 2 million active users recorded in 2018.

Why do customers want it?

First and foremost, security. In a world where one wrong click can leave you at the mercy of account draining scammers or file corrupting viruses, keeping your customers safe is your priority numero uno. Luckily, it’s your customers’ priority as well.  A 2017 survey found that only 25% of respondents believed businesses handled their sensitive personal data responsibly, and they might have a point. Cyber Security provider Shape security has reported that between 80-90% of login attempts on online retail sites are made by hackers utilising stolen information, largely taken from poorly secured online payment pages. With figures like that, it’s no wonder today’s customers prefer to be selective about who they trust with their information.

Buy now, Pay later

When it comes to services like Afterpay, it’s all about providing instant gratification for customers. Just like a credit card, Afterpay allows users to make their purchases when money is tight and pay for them later when, hopefully, they’re in a better position to make the payment. For you as a seller, there is relatively low risk. Afterpay itself instantly pays you, minus a percentage (we’ll get to that) and then the onus of paying the debt back to Afterpay is on the customer. It seems to have popped up out of a gap in services for people who either can’t or don’t want to use credit cards (perhaps owing to low limits) as well as the desire to create a buffer between unsecured sellers and customer bank accounts. Additionally, Afterpay’s late fees for payment is capped at 25% of the item’s total price, something that the less diligent bill payers of the world are taking as a blessing.

Why might you want it in your business?

Whilst your customers might not know you wouldn’t be so careless with their information, there might be other reasons for you thinking about a service like AfterPay. Hackers move quickly and can adapt to the latest in cyber security faster than you’d think. Unless you’ve got the resources to set up a counter-hacking-task-force all of your own, utilising a secure (aka separate) payment method is the best way to take the pressure off of your site’s security. Mind you, that doesn’t mean you can let security lapse. If you think you’ve seen a bad review, wait until you see one from a customer whose information got lifted from your site. Actually, best pray that never happens to you.

Aside from the security concerns, the fact of the matter is that it’s what your customers are using. Your customers are not going to know that you really do have a secret task force securing your site, they’re going to see you don’t offer what they perceive to be a secure payment platform and move on. Add to that the normal rate of transaction drop off when someone has to fill in their credit card info (hello museum of abandoned carts!) and refusing to adapt to the Next Big Thing in payment options is officially costing you money.

The drawbacks

As with everything in business, there are some things to consider before you commit to a payment platform. Namely there are two major drawbacks, cost and control. Most major online payment options take a portion of your sales. It’s nominal for big businesses, but certainly a cost to factor in for smaller ones. Typically, PayPal takes 2.9% + 30 cents per transaction and Afterpay takes an immediate 4-6% commission. Importantly these numbers must be factored into your costing and selling prices, particularly with services like PayPal where there is a minimum flat rate. If you’re allowing PayPal transactions, try to bundle lower cost items together as opposed to selling them individually, that 30 cents adds up quickly for small items and could really eat into your margins.

However you get your customers through the checkout, we can help you do the rest so you can focus on building your business (not packing and shipping parcels). If you’d like to chat about getting your orders fulfilled or anything else e-commerce, we’d be delighted to help. You can always give us a call on +61 2 9828 0111 (Sydney), +61 3 9240 6300 (Melbourne) or +64 9 263 8855 (Auckland) or drop us a note via the form below.

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