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Ecommerce Forum

payment options, how many is enough?
merchant acnt, check, paypal...anyone use all?

 12:37 am on Oct 5, 2004 (gmt 0)

i'm of the school of thought that for any online business, you MUST have a merchant acnt for maximum conversion and professionalism....but do you need to take check, paypal and any other systems that i don't currently use?

my target market is low-moderate income middle america, and i get at least 1 email a wk asking me if i take check/moneyorders....not that its a high volume, but the way i figure, for each 1 that asks, there are 9 more that don't.

does anyone here have an experience with conversion rates improving when taking on additional forms of payment? or even-moreso if you're a hardcore B2C shop, selling to ppl who may not have CC's?

i'd love to hear other's takes on this issue...




 6:01 am on Oct 5, 2004 (gmt 0)

I've been contemplating the same question. I've heard that sales increase an average of 7% by adding an alternate payment method. I have no personal data to back this up, just a decent survey I came across on the topic. Does anyone have any real-world numbers?


 12:49 pm on Oct 5, 2004 (gmt 0)

I think it depends on the business.

We offered COD and it added about 10% to our buisness. We got rid of it after 5 years, as our unclaimed (return to sender) rate jumped from 0.5 to 3%.

I also added paypal, and some merchants indicate that it increases conversion, but for us it was a waste of time.

Surprizing, offering payment by phone, increases sales by 15%. Due to unjustified scare tactics by the media,
a lot of people still think giving your credit card over a secure https connection can lead to the credit card being stolen.

Money orders bring in about 2%. Half the people that select money order, never ever sends the money order in, so don't order the product or do customization until you actually see the money.

Don't accept personal checks, electronic or otherwise.
If they can't pay by any of the other means you offer, it ussually means they have no money, and the cheque will be returned NSF.


 1:36 pm on Oct 5, 2004 (gmt 0)

arent there some sort of echecks that automatically debit money when the transaction is made? i sell an online product so i can complete the sale as the transaction occurs.


 5:28 pm on Oct 5, 2004 (gmt 0)

I have accepted Echecks via paypal, never had one returned.


 6:29 pm on Oct 5, 2004 (gmt 0)

I currently accept Visa, MC, Discover through a merchant account, e-Gold, PayPal, money orders, and checks.

Of these I get one or two e-Gold orders a year, but it is no big deal to offer so I'm keeping it and it is by far the most secure for international orders.

PayPal is about 10% or so of sales, but I have gotten a number of high ticket sales with it so it probably represents at least 15% of my gross intake. I need to run the numbers again. One thing that I have found is that a lot of people use it if they sell stuff on eBay and consider it play money, so I would like them to feel free giving it to me to play with. I also have a few stone suppliers that take it along with my webhost so it makes it handy to have some already in the account.

Money orders are good, but I prefer postal money orders since they can be easily cashed at the Post Office when I get them out of the PO Box. The others have to go to the bank, and they are more easily faked I have heard.

Checks are something I'm thinking about droping. I just got a bad check back this week and it will be a pain to deal with. A $20 check so far has cost me $7 in fees and in the end there is probably nothing I can do about it. Luckily I have only gotten a couple in the last five years, and the worst one, $250, was at a face to face sale. It took four months to finally get the money.

As someone else mentioned, only about half of the money order and check orders ever arrive. I usually don't start work on the ordered pieces unless it is something I can sell fairly quickly anyway and don't mind having in inventory.


 6:38 pm on Oct 5, 2004 (gmt 0)

as my business is selling access to a content area online (no its not porn!), i would only consider totally automated forms of payment. i prefer to keep as much of my business online as possible.

so for me, when i'm talking about additional payment options, i'm referring to eChecks insteand of checks, and other things like paypal, i'm definitely not going to have people sending me checks in the mail!

someone mentioned that eChecks could be taken through paypal? that would kill two birds with one stone...if not i know i can take them through my merchant acnt.

anyone know about this?


 7:28 pm on Oct 5, 2004 (gmt 0)

echecks will bounce just like paper checks. However echecks will clear within 48 hours, where paper checks can take over a week.

The fact that echecks are less likely to bounce, is probably due to the fact that, anybody thats going to kite a check, will want the longest time possible to cover the funds, and will thus go the paper check route.


 8:01 pm on Oct 5, 2004 (gmt 0)

more payment options always make for higher conversion rates


 8:49 pm on Oct 5, 2004 (gmt 0)

lgn1 mentioned here that thier sales jumped up by 15% when they introduced pay by phone option!. This is very intresting to me (I've been thinking of implementhing a phone/merchant bank link for a long time).

Does anybody here written / implemented an automated interface that lets a customer enter his order number and credit card number over the phone for as a realtime payment method?


 9:14 pm on Oct 5, 2004 (gmt 0)

We do over-the-phone sales and recurring purchases as well. For us it accounts for about 15% of sales. That 15% includes people who call in with questions and wouldn't have bought something themselves without talking to a person. About 5% of new customers are unwilling to part with their info via the web, even if we offer to walk them through it via phone. Initially, the biggest benefit was all of the feedback we heard from people calling in to place orders. We learned about competitors, purchasing considerations, and so much more that way. Recently it started to become too time consuming and we weren't learning anything new, so we switched to a toll-free inbound messages system that works great. About once a month, I put aside a few hours to take all new customer calls just to stay in touch with the 'pulse' on the street.


 5:36 am on Oct 6, 2004 (gmt 0)

someone mentioned that eChecks could be taken through paypal? that would kill two birds with one stone...if not i know i can take them through my merchant acnt.

anyone know about this? - Echecks via paypal are used when the buyer doesnt have any funds in the accountm money then comes via his/her bank account


 3:46 am on Oct 8, 2004 (gmt 0)

As far as telephone orders and security, an actual phone call conversation is not as secure as the encrypted internet session. And chances are the site operator is going to send their payment to an online gateway anyways. However, I think the main reassurance of ordering by phone is not the technical matter of security, but rather the reassurance that they're ordering from an actual person or company.

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