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Key Takeaways

Widen Your Wallets: Incorporating diverse payment options improves customer satisfaction. Nearly half of customers prefer digital wallets, showing the importance of offering a variety of payment methods, including cryptocurrencies.

Smooth Sailing Checkout: Optimizing payment processing enhances customer experience and increases conversion rates. Easy and secure payment systems like those used by Amazon and integrated into Shopify or WooCommerce make purchasing simpler and safer.

Speedy Transactions Triumph: Quick and efficient payment processing benefits both the customer and the merchant. It reduces the likelihood of cancelled transactions and positively impacts cash flow by ensuring faster access to funds.

Global Expansion Gateway: For businesses eyeing international markets, versatile payment processors facilitate this move. They support multiple currencies, smooth out conversion rate management, and ensure secure international transactions.

Fortifying Fraud Defense: Enhancing security measures in payment processing is crucial to prevent fraud. Advanced security features and fraud detection in payment processors protect both the customers and the brand’s reputation.

Ecommerce payment processing has changed quite a lot over the last few years. Brands now get to choose from a variety of payment options, opening up new revenue opportunities.

However, many businesses still only accept card payments, a big turn-off for the 42% of customers that prefer using digital wallets.

Payment processing is changing so quickly, so it's important to keep on top of the changes in technology and customer practices.

In this guide, we are going to go through 15 of the best practices for payment processing you can incorporate into your online store today.

Benefits of Optimized Ecommerce Payment Processing

Giving customers the best possible payment experience can significantly increase your conversion rates. When customers trust your brand and paying you is convenient, it makes sense.

Let’s have a look at some of the key benefits of an optimized payment processing system.

Better Customer Experience

Customers love having an easy-to-use payment system that allows them to pay with their favorite online payment method quickly and securely.

Customers are more likely to return to a shop that has an easy-to-use system, improving your customer lifetime value (LTV). Amazon is a great example of how a simple payment system can improve conversion rates, but there are good options for smaller businesses.

Big ecommerce platforms like Shopify and WooCommerce have great payment processing plugins and in-built systems.

Secure Payments

Security is the most important part of a payment, as if you have fraudulent payments you can lose customers and have payment processors refusing to work with you.

Fraud costs brands billions of dollars a year in payments, so it can have a big financial and legal impact on your business.

The best payment processors have advanced security and fraud detection built-in.

Faster Payments

When a transaction takes too long, customers lose patience and cancel their transactions.

A slow payment processing system can also mean that it takes a long time for the money to appear in your merchant account, causing a knock on impact on your cash flow when money takes longer to land in your account.

Fast checkout also improves conversion rates as customers are able to checkout and pay with just a few clicks.

International Sales

If you are planning on expanding globally, your payment gateway and processor can help make the whole process seamless.

Most larger payment processors accept multiple currencies and credit cards. They even allow you to store money in your merchant account in local currencies so you can manage international conversion rates.

The payment processor should also have security features that help to accept international payments securely.

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14 Top Ecommerce Payment Processing Tips and Best Practices

Ecommerce payment processing solutions aren’t just about accepting credit cards, debit cards, and digital wallet payments.

There are a number of ways you can improve your payment processing flow for your customers.

Let’s look at my top 14 best practices for payment processing.

1. Diverse Payment Options

Customers love having multiple payment options available, and nearly 50% of customers last year used digital wallets—such as Amazon Pay, Google Pay, and Apple Pay—as their main payment form.

Different ecommerce businesses will have different payment requirements. For example, brands who sell larger items may need payment by bank account transfer (ACH).

Another example is buy now pay later (BNPL). This has become quite popular with brands such as Klarna and ClearPay offering a kind of digital wallet that allows customers to pay for the product in installments.

Some businesses are even accepting payments in cryptocurrency. Shopify, Woocommerce and Bigcommerce accept crypto payments, and the most common payment types are Bitcoin, Ethereum, Bitcoin Cash, and Ripple.

Digital wallets are the biggest trend at the moment, and you should definitely be considering adding them as a payment method. The fees are a little higher than some card payments, but the conversion rate makes up for it. 

Of course, the most important online payment processing method is credit cards, so make sure you can accept major players like Visa, Mastercard, and American Express.

When deciding on which payment options or payment platforms to accept, check the processing fees so you can understand your profitability.

2. Security is Paramount

As we mentioned, security is the most important part of payment processing.  These are the most important security features you need to implement:

  • Encryption - Payment gateways can encrypt card details and payment information during the checkout process to ensure that the data can’t be intercepted and misused. Check that you have SSL certificates in place for secure payments. You can tell if a site has SSL certificates if it has “https” at the beginning of the URL.
  • Tokenization - Most payment gateways can tokenize customer payment data, which means the credit card information is made into a ‘token’, which can’t be intercepted.
  • Authentication - There are some standard authentication methods for credit card processing such as the CVV code (the three numbers on the back of the card). But consider more advanced security methods, such as biometric authentication (as seen with Apple Pay) and 3D secure payments (which connects the customer directly to the customer’s bank or card provider).
  • Reliable payment system - It's important that your payment system doesn’t go down. The best payment systems will give businesses notifications when there are any issues with the network.
  • PCI compliance - Good payment gateways are compliant with PCI DSS standards, which means they are trusted and secure. It's vital you understand your responsibilities around industry standards to keep your business and customers safe.

3. Seamless Checkout Experience 

Checkout needs quick and easy navigation so customers have fewer chances to abandon their carts.

You don't need to ask for overly complicated information, just enough to deliver the customer’s product successfully.

Some payment gateways and digital wallets, especially wallets on digital devices, will even allow a customer’s details to be automatically pre-populated, saving customers a lot of time.

4. Mobile Optimization

Mobile sales made up over 43% of all online sales in 2022. Not an insignificant chunk of potential customers!

If you don’t have a checkout and payment process optimized for mobile devices, you are losing out on sales. Most modern payment gateways use responsive design to make the payment page look great for mobile devices.

5. Transparent Pricing and Policies

Your pricing and policies for payments need to be very clear to your customers, so there's total clarity on what to expect.

Without this clarity, unexpected costs (like shipping fees) will lead to cart abandonment and lost trust with the customer.

Taxes are to be expected, but if you charge for shipping, this should be obvious to your buyer early on.

As for policy transparency, give your customers an idea of how long shipping will take, what the returns policy is, and any other information your customers need to know.

The best place to include all this information is in the product listing page, your policy page, and in your FAQs.

6. Fast Processing Speed 

There are two parts to the payment processing, the front end customer-facing part and the back end.

The payment gateway needs to process the transaction quickly in the back end, so the customer knows when their money has come out of their account. If you have a slow processing time, then the customer may lose trust in the process and pull out.

The customer-facing payment processing should have as few steps as possible.

If you require the customer to create an account or you ask for unnecessary details such as date of birth, it gives them a chance to abandon the cart.

7. International Transactions

If you serve customers globally, consider offering multi-currency support and local payment methods.

For example, if you have customers in the US, but you are based in the UK, you will probably need to accept American Express as a payment option.

Also be aware of different tax laws and compliance requirements in the countries you operate, as they can be different for each region. Sometimes, there are even different rules within the same country.

For example, the US has different sales tax rates in each state, which you'll need to pay.

Most of the major payment providers allow you to accept payment in multiple currencies, but double check before choosing one. Some platforms have high online transaction fees for international credit card payments

8. Fraud Detection and Prevention 

Fraud checks are a major part of what a payment processor does, and all the big payment gateways have really thorough fraud checks.

There are a few different types of fraud that an ecommerce payment processor checks for, including address verification, CVV security checks, and chargeback requests.

A good fraud checking process is very important to your PCI compliance.

9. Regular Audits and Updates

Make sure you are always reviewing your payment system, as sometimes your software updates or becomes out of date, or the laws governing how you manage payments and customer information change.

Keep your payment software up to date regularly by updating any plugins you have and installing any updates given to you by the payment provider.

10. Customer Support

Ensure your payment system is API-integrated with your order management system, allowing your customer support team to efficiently handle payment issues.

Any customer issues around payments should be dealt with as quickly as possible.

11. Recurring Billing for Subscriptions

For subscriptions, ensure your recurring billing maintains the same level of security and user-friendliness as your one-time payments.

This is important for two reasons. Firstly, you want each recurring payment to be taken successfully. Secondly, you want to make sure customers have a good experience to reduce churn rate.

A great idea is to allow customers to see upcoming payments on their account page, so they can manage any upcoming charges.

12. Data Analytics 

Payment gateways typically offer data and analytics on customer behavior, purchase locations, income, returns, and other valuable insights.

You can integrate this data into your ERP or order management system, giving your team access to analytics for payment flow improvements.

If you sell in brick and mortar stores, or through retail, you can integrate the data analytics with your in-person payments point of sale (POS) system.

Payment providers like Square and Stripe have card readers and virtual terminals, so your in-store customer experience can match your ecommerce payments.

Selling globally requires staying updated on each country's laws and regulations, including data protection and consumer rights.

For example, GDPR rules in the UK and Europe demands compliant data storage, affecting your payment journey planning.

14. Continuous Improvement

Make sure you understand new technologies and take into account customer behavior and feedback to keep your payment processing up to date.

Payment processors like Stripe and Square help you to analyze customer behavior in the analytics tools.

Optimize Your Payments to Improve Trust and Your Bottom Line

Optimizing your payment process benefits both you and your customers.

Prioritize secure transactions to build trust. Then, refine your payment flow to boost sales and loyalty.

Dive deeper into the world of ecommerce optimization by subscribing to The Ecomm Manager newsletter. Stay ahead with insider tips, trends, and expert insights that propel your online store to new heights. Join us in shaping the future of ecommerce—subscribe today!

By Teddy Smith

Teddy Smith is an ecommerce brand founder and a former Senior Ecommerce Consultant for Accenture. He is also an independent ecommerce consultant, specializing in selling on Amazon and marketplaces. Teddy has 13 years of experience working with both enterprise and small scale ecommerce brands, and has provided over 3,000 hours of independent ecommerce consulting sessions.