Contactless payment, Apple Pay, Android Pay, Smartphone payments, where will technology end?
Will we all eventually have a chip inserted under our skin as they are currently trialling in Sweden?
This article is not going to tell you which payment provider you should use.
It is going to do something much more important than that.
I remember as a young boy on the market stalls when credit card payments first became accessible.
Before that everything was cash.
This was not contactless payments.
It wasn’t even chip and pin.
It was a large imprint machine.
In it you load the customer card, place a triplicate strip of paper over the top and manually swipe the top part of the device to create an imprint of the card.
A truly analogue experience.
The customer signs the paper. You check the expiry date and signature…
Top copy to customer, middle copy for accounts records, bottom copy to the bank, get paid in 3-5 working days.
Small time retailers were not too impressed with the arrival of plastic payments.
At that point cash was king.
Cash was instant. The new credit card system took 3-5 days to get into your bank.
You used to be able to go anywhere and get the best deal by offering up a wad of notes.
Try buying something with paper money now.
Habits and behaviours change.
Taking eCommerce payments is no different. There are options, some faster than others. Some cost more than others.
The payments landscape is constantly evolving.
The right payment method can make or break your business.
When I first started in eCommerce Worldpay was in its infancy.
After working hard to get a sale, the money would sit in a holding account for 30 days.
Yes, 30 days!
The impact on cash flow was enormous.
We purchased stock from suppliers on 30-day credit, shipped to the customer within days of ordering. Then we would wait 30 days for the money to hit our bank.
Rarely would we make a sale on day one.
We would end up in overdraft for the overlap period between paying the supplier and receiving the sales income into the bank.
However, the only option for internet merchants at the time.
Waiting 30 days for your money is an extreme example but the lesson when choosing the right payment provider for your business remains valid as processing times vary across payment processors.
Choosing the right one for your business can be the difference between healthy cash flow and headbanging frustration.
Cash flow, or lack of it, is one of the biggest killers of businesses.
Scrutinise the transaction costs of doing business with each provider too.
0.5% difference in transaction fees might not seem a lot when you are starting out, but believe me when your business is turning over millions…
…0.5% matters a lot!
Another important factor to consider is your customers.
Back in the day on the market stalls, my Dad was one of the first to embrace the clunky new credit card technology.
However, he did it reluctantly.
Moreover, only after customers at the point of purchase asked if we took credit cards, then promptly walked away when the answer was “no”.
I can still see the confoundment on my Dad’s face.
At the time there was a shift in customer behaviour.
Buying habits were changing.
They keep changing.
So it is important for you to keep your ear to the ground and respond quickly to how your audience wants to pay.
Don’t be like my Dad and wait for customers to walk away before making the switch to a new provider.
The other surprising thing about taking credit cards on that analogue machine years ago was that people felt more confident because they were protected by the credit card company.
What we did not anticipate was that accepting the right payment methods meant we were able to scale faster.
Why? Because of the surge in confidence people were prepared to spend more money.
The very same thing happened when eBay blossomed into the online car boot sale that it was and everyone started using Paypal.
The switch to accepting Paypal had a profound effect on our eComm sales.
People trusted Paypal.
They felt confident b
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