Online payments explained
Cash transactions are still holding strong in some industries but with online shopping counting in multi-billions it is a revenue stream every merchant urges to grab a chunk. Every retailer wants a piece of this fast growing pie. As in marketing strategy, online commerce also starts by monitoring the customer’s journey and identifying patterns and preferences.
The current industry standards include direct acceptance of credit/debit cards, phone orders and PayPal. With the mobile market rising over 20% of all online transactions, Apple and Android pay are becoming absolute necessities for 2017. To offer that choice over the web or through a mobile application, an online POS (Point Of Sale) system directly connected with the merchants’ bank account needs to be installed and verified over a server that would guarantee secure transactions.
The newly developed collaborating potentials between online stores and marketplaces have also created new forms of online payments. One of these new commercial practices is called contextual commerce were businesses are partnering to offer connected commerce experiences. This infrastructure requires secure sharing of payment data between partners making possible a store-in-a-store experience to the end user that looks like this:
- Your business partners with a platform or another merchant displaying your products or services on their marketplace.
- The consumer discovers your product on partner’s platform.
- The consumer buys product or service on partner platform.
- The partner platform shares payment info with you.
- You charge consumer and deliver the product or service.
Another variation of online payments is the splitting of payments between involved providers that will be paid for their share contribution in the sales process. A typical example for this option would start on a marketplace app or website the transaction would be created. This sub-merchant that owns that place could do the delivery of the goods and get paid from the end consumer and then pay the cooperating sub-merchants that have produced the goods.
Focusing on the essence of all structures we can understand they are designed to offer more options and a better service to the end consumers like in drop-shipping were a merchant orders and pays another merchant to deliver products directly to the end customer.
For online commerce designers and marketers like us that are called to evaluate the best possible combination this means the payment getaway they will propose to their clients will have to cover a very complex set of variables. Security issues have to be covered, charges must be reasonable and the selected system will need to consider who gets most profit and design an efficient charging system that will distribute those charges accordingly to suit all sides.Contact our team to help you chose the optimal online payment solution for your budget and efficiently implement it on your online marketplace.