Online Payment Methods
The options for receiving online payments have been expanding. Gone are the days when an dedicated payment gateway is needed, now online payment accounts are the accepted norm.
Both systems are very similar in the service and style. The Customer & the Retailer have specific online accounts that monies are moved between as payments are made. The middle man of Paypal or Google, processes the card details, ID verification etc. These systems offer a simplicity to receiving online payments suited to business of all sizes.
These payment methods also have scope for encouraging more sales to an e-commerce site and open up the markets providing a draw for new business, as Paypal claim to have over 1 billion accounts.
Being able to accept online account payments can give an option to a customer who may be a little weary of entering their card details to a relatively unknown site. And with many of the online payment accounts linked to eBay, there is a wealth of online balances that can easily used for impulse buys and easily justified spends.
The two leaders in these systems are Google Checkout and eBay’s Paypal. There are others and many more have fallen by the way side. Google and eBay have gone head-to-head over their respective payment methods. Which came to boiling point earlier this summer, when Google set-up a promo event across the road from the eBay LIVE annual show. It went as far as eBay removing their advertising from Google, albeit only for a few days. Google checkout is now on the banned list of payment methods for eBay auctions. This could have you leaning towards the Paypal option in terms of market saturation, but Google not to be out done, have tied Checkout to adwords.
As Google checkout is in the launch phase, all payments are processed free, but from 2008 for every £1 spent on adwords will allow £10 to be processed via Checkout. Also as part of the checkout adwords combo, your ads can be verified to display a Google checkout logo. The benefits for this can been clearly seen as only a few adwords ads have the logo, but as this grows the benefits will be marginal.
The online payment accounts are not the answer to all eCommerce woes, as cost can be a big drawback. While Google offer the cash back scheme, standard fees average around 4%. A steep price to pay in comparison to some merchant accounts. Fraud protection is also a big factor, while the majority of transaction are worry free when a hitch does occur the big online companies can be difficult to deal with. Paypal has a cult following of detractors and Google will surly have plenty as the ball starts rolling.
