Practical Ecommerce

Adding Alternative Payment Methods to your Online Store

Many established merchants offer payment methods in addition to credit cards. The most popular alternative by far is PayPal, but there are other options, too. In my experience, adding a single alternative payment method that allows shoppers to avoid using a credit cards is a good idea.

In my online jewelry business, we added PayPal Express and saw our checkout abandonment decline by a few percentage points. I became a believer in alternative payment methods at that point. Some customers simply don’t want to enter credit card information in your site and PayPal Express allows you to address that fear.

In this article, I’ll review the most popular alternative payment methods: PayPal, Checkout by Amazon, and Google Wallet.

PayPal

Many merchants add PayPal Express as a payment alternative. It is easy to implement and allows customers to bypass your site to make secure payments.

With PayPal Express, you simply add a button to your checkout screen. This takes the customer directly to PayPal for a secure payment. PayPal also offers “Buy Now” buttons that can be embedded in newsletters or blogs. The setup is easy, payments are made through the PayPal, and you will receive funds nearly immediately.

The PayPal Express checkout button.

The PayPal Express checkout button.

You can also use PayPal to process your credit cards. To do this, use Standard PayPal Payment solution. It also offers an Advanced and Pro option. With the Standard solution, the fees start at 2.9 percent + $.30 per transaction. At a volume of $10,000 or more per month, that rate goes down to 2.2 percent + $.30 per transaction.

PayPal also offers a PayPal Here card swiper that attaches to a smartphone.

PayPal offers seller and buyer protection, making the transaction less risky for both parties. PayPal offers a dispute resolution process that I found to be reasonable the few times I used it.

Amazon Payments

Amazon is soliciting merchants for its Checkout by Amazon platform. The advantage it offers is the huge number of consumers with an Amazon “One Click” account. Those consumers can use that on your store. They also receive the A-to-Z Guarantee, so the risk of purchasing from you is much lower. The disadvantage is you must use Amazon Seller Central. You’ll need to confirm orders and shipments just as though you were an Amazon Marketplace seller. The customers become Amazon’s, not yours.

Beyond that, the integration process for Checkout by Amazon is similar to PayPal. If your shopping cart supports the checkout, it is a straightforward addition. If not, you can add an HTML or XML code snippet.

Amazon will hold your funds for 3 to 5 days after they are posted as shipped in Seller Central. Amazon’s fees are comparable to PayPal’s fees.

I do not recommend Checkout by Amazon unless you are already an Amazon Marketplace seller. You are beholden to Amazon’s customer response policies, which can take a much time and effort.

Google Wallet

Google made a huge online-payment push roughly five years ago. I see very few stores using Google Wallet now. I evaluated it several times in my jewelry business, but the integration with NetSuite, the platform I used, seemed problematic. Merchants also complained that very few buyers actually chose that option.

Google Wallet offers many setup choices. You can use a pre-integrated shopping cart, add a “buy now” button for single items, add a gadget or cart to your store, or integrate Wallet using HTML or XML, for a custom implementation. This can take a single hour or many weeks. You can easily add a cart to a Google Spreadsheet or embed in Blogger sites.

Google’s fees are similar to Amazon and PayPal. You will be subject to Google’s terms and conditions for fraud protection for you and buyer protection for customers.

I have a difficult time seeing an advantage to Google Wallet. I would add PayPal first, before Checkout by Amazon or Google Wallet.


Dale Traxler
Dale Traxler
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Comments ( 3 )

  1. cygnetinfotech May 13, 2013 Reply

    Another alternative for payment methods to your online store is Payment Gateway Integration(PGI) which is concerned with the payment made by customers via cards. Cygnet has a wide experience in all types of payment gateway integration such as PayPal, 2CO or 2Checkout, Authorized.Net, Verisign Payflow, Worldpay, CC Avenue and HSBC, ICICI and HDFC Payment Gateways.

  2. Jason May 14, 2013 Reply

    Great article. We currently offer PayPal as a payment option, but not through PayPal Express. We are in the process of redesigning the web site and decided to start using PayPal Express.

    I have looked over the API and the implementation looks easy.

  3. Jorie Hilbert June 19, 2013 Reply

    If it is working with my fraudlabs pro fraud checking module then I would like to try.

    Thanks for sharing!

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