Which are the options for receiving online payments?

Are you thinking of opening your online store? It is an excellent idea, this type of business has less administrative costs, allows you to access new markets (for example if you are in Monterrey you can sell to people who are in Merida) and you can analyze specifically what your customer is looking for.

You probably already have the design of the site, as well as other details of your operation. Now it's time to choose how you are going to process payments in your online store, and this is one of the key points for your ecommerce, which unfortunately many entrepreneurs leave until the last minute.

It is necessary to take into account that this element is of utmost importance at the time of selling online, especially in these times of the greatest boom in e-commerce.

For example, in the last edition of Hot Sale 2021, an online sales campaign organized by the Online Sales Association (AMVO), being able to pay in different ways on the Internet was among the top 5 reasons to buy online. While one of the top three motivators for non-buyers to be interested in Hot Sale was the fact that there are more ways to pay besides debit and credit.

As for payment methods, payment by debit card continues to be one of the main payment methods during the campaign. Compared to previous editions, digital bank cards are gaining strength as a payment method. Other payment methods such as deposits or transfers weighed more in this edition as compared to credit cards or departmental cards, according to AMVO information.

Also, consider that payment method fragmentation varies greatly from place to place. While some payment methods such as major credit card brands are now available in almost all countries, others are still limited to a single country or even to a single segment of the population in that country.

Identification of potential customers is an important first step for a company in deciding on its payment options. The distribution of payment methods used in Internet commerce varies radically from one part of the world to another, as well as within specific areas.

Therefore, below we will tell you how online payments work and which are some of the providers that can help you integrate these solutions to your business and what are the key points you can consider.

What is a payment gateway and how does it work?

Let's imagine that you are about to finish the design of your website. At this point you have already purchased a domain, you already have your website with the pictures and descriptions of your products, you have already set up a shopping cart within the ecommerce platform you have selected and you have already decided how you are going to send your merchandise to your customers, etc.

Now you will need to connect the shopping cart with a service that can process card payments digitally and for this you need a payment gateway or platform service and they work as follows.

Let's say your site is fully functional and therefore your customers can now browse, choose products and add them to the shopping cart.

After a person has finished deciding the total amount of their purchase, he/she will proceed with the payment. To do so, he/she will have to enter his/her contact information, shipping address and credit card information.

Once your customer clicks on the payment button, information is processed by the payment gateway, which first validates that the data is correct, then sends it to the bank that issued the card with which the payment was made and asks for authorization to make the transaction.

After that, the bank provides an answer indicating whether the transaction was approved or not, and finally the deposit will be made to your account. Please note that deposit times depend on each supplier.

Online payment options that exist in Mexico

For digital entrepreneurs to receive online payments, there are two options: traditional banks and payment gateways such as:

• Stripe
• Paypal
• Conekta
• Adyen
• OpenPay
• Pay U

Please note that only a few banks in Mexico offer a special account to process payments. The advantage they offer is that they have the lowest commissions among their competitors.

The bad news is that the process to open this type of account can be very long and you will be asked for a lot of documents to prove that your company is legal. Also, you will need a programmer because getting the bank's system to work with your site is quite complex.

In fact, all these factors are the reason why payment gateways have become the main ally of virtual businesses in Mexico, since it is much easier to integrate them to your site and they offer more facilities.

Payments reception requirements through a payment gateway

Payment gateways usually ask for:

• A bank account to deposit the payments you receive.
• Legal representative's official ID
• Taxpayer identification number (RFC) as a legal entity with business activity
• Documentation that proves that your company is legally formed.

Remember, these providers often play an intermediary role between the financial institutions and your business, therefore, it is likely that in some cases they will ask you for more documents to prove that your business operation is regulated.

If you sell certain foods, for example, it is likely that you will be asked for the corresponding licenses for those types of food, or if you are a travel agency, that you have the corresponding permits from the Ministry of Tourism.

3 keys to choose a payment gateway

Many providers can help you to receive online payments in your store. By now, you are probably wondering how to choose a payment gateway. Therefore, we have prepared the following points which will help you make a decision that is optimal for your business finances.

Commissions

All payment processors charge a fee for each transaction you make and some offer preferential rates if your sales are over a certain amount (this depends on each provider). As in all lines of business, some services are more expensive than others, but the service they offer may have more advantages. For example, Paypal, Adyen and Stripe are the payment gateways with slightly higher commissions than the rest but offer more benefits in terms of customer service, anti-fraud system, invoicing systems or others.

Payment schemes

If your business is subscription-based, then you will need to investigate how easy it is to apply this type of payment scheme. The same applies when the items you sell are very expensive and you should check with these suppliers if they can offer Interest-Free Months on your online store.

Remember, it's not all about card payments as one of the challenges facing digital entrepreneurs is the fear of buying online. 

For example, an e-commerce survey conducted by Deloitte in 2019 revealed that the biggest concerns of users are: unauthorized charges, card cloning and information theft.

Therefore, it is also worth evaluating payment processors that enable wire transfer payments and even offline payments in convenience stores, pharmacies or supermarkets.

Offline payment system

This payment system works in a different way. When your customers choose this payment method, they will receive a payment slip with a barcode or a reference number to go to a physical store to make the payment with cash. Keep in mind that commissions in this scheme are more expensive since the establishment will charge a commission (to you and your customer) for processing the payment. The time it takes to receive confirmation of payment is another consideration if you want to implement this type of payment in your business. Some providers can confirm immediately and others take between 24 hrs to 48 hrs to notify the payment.

Some providers that offer this type of collection system are:

• ComproPago
• Conekta
• OpenPay
• Banwire
• Pay U

Most of these systems have different facilities and tutorials to integrate their payment system with the most common ecommerce platforms (Shopify, Woocommerce, Magento, Prestashop, etc.). The best thing to do is to check with your programmer how easy the integration process will be and if the payment processor has a good support team to help you in any situation.

Remote payments to sell without a website

If the above doesn't fit your business because you sell through social networks, don't worry. There are new options for generating remote payment links that can be sent through messaging applications, mail or social networks.

A few months ago, Clip launched Remote Payments in its application so that businesses can sell remotely, securely and without the need for a website. In other words, it is an online payment method because the payment is made without the card present and therefore without a terminal.

In order to use it, you only need to download the Clip app (available for Android and iOS) and generate a link, which you can send to your customers via email, text messages, WhatsApp or social networks. This way, businesses will be able to accept online payments with a maximum amount per transaction of $1,500 pesos and a daily cap of $7,500 pesos.

This way your customers do not need to have an online banking account or any other application, because by clicking on the link their device will open a browser window where they can fill in their card details and make the payment.

One more option is Swap, an application that was created with the objective of helping to send money between people, in an easy and fast way, without having to have someone else's bank details.  

When sending or collecting money through Swap Keyboard, the user will be provided with a link to enter his/her bank details to receive or pay the corresponding amount.

The link is valid for 7 days and if it expires, the money will be returned to the Swap Balance of the person who sent the money.

It is possible to make transactions from your debit or credit cards and send money to any person in your contact list, you only need their phone number or email address.

Collection requests can only be sent between validated Swap users. So in order to send a collection request, you can do it from the application in the "Collect" option.

In case they want to add the Swap app specifically to request collections, they have the option of a merchant type account. If so, the business would absorb a commission of 3.5% plus VAT per transaction.

Remember, this is one of the most important decisions within the operation of your business, so consider all the factors we have given you.

Conclusion

You need to stop and evaluate carefully each payment gateway and ask yourself what is the best thing you can do for your business. A bad experience with this service can mean big losses for your business, so evaluate what you need and which of these options can best satisfy you.

Remember not to go for the cheapest or for the one that charges the least commission, because your priority must be to provide an excellent service for you and your clients. This implies that when choosing, you should also consider aspects such as design, ease of use and trust for the user.

One way to keep customers happy, for example, is by designing call-to-action (CTA) buttons that are optimized for the mobile version. This way, they can easily and quickly complete the checkout process because they know exactly what to do step by step.

Another option is to allow customers to pay as guests, i.e., Do they really need to remember another user name and password? Given that some people still have doubts about the security of mobile payments, this reduces that fear.

Also, given that a percentage of customers may be buying from a mobile device, filling out long forms can be tedious, as the screen and keyboard are smaller.

If you are looking for a way to improve customer confidence, integrate a payment solution that inspires trust, supports multiple payment methods and is protected from potential fraudulent actions.

These details may not seem so relevant, but they could make the difference in the success of implementing online payments in your e-commerce. Don't forget that users are more likely to complete the purchase depending on how easy and fast the process is.