In the last edition, we gave you the lowdown on e-commerce and payment solutions.

Now as promised, we share some hints and tips for selecting the best value payment partners to support your e-commerce business growth.

The key elements which drive selection can be grouped as:

  • Customer expectations: Providing an easy to use checkout experience securely offering the payment options your target audiences want
  • Security: Both the consumer’s perception of the security of your site and managing the risks to your business inherent in each type of payment method
  • Cost: with the surcharging ban from January, transaction costs are now in focus, however, businesses must also factor in the considerable set-up costs. These include integration with other channel’s solutions and hidden resource costs such as reconciliation (especially where non-card alternatives are involved).

In this article, we’ll talk about customer expectations and security, then follow up with more on the cost next time.

Customer Expectations: Target territories

This is an international market; solutions and providers vary even across Europe. For example, many more Dutch consumers pay by iDeal, which transfers funds between banks without cards, than pay by credit card. Many other similar systems are growing fast across Europe.

In Africa, mobile banking has filled the void left by the absence of a developed banking infrastructure.

In Eastern Europe and in Russia; ‘cash on delivery’, which is almost unheard of in the UK, accounts for a surprisingly high proportion of transactions.

Just because the UK is currently still very card focussed, do not assume that a ‘cards only’ strategy will power your growth overseas.

Customer Expectations: Product

Is the product a service or physical goods? Digital goods are more likely to be bought via phone or tablet, where the benefit of not needing to key in card details leads to a rising proportion of successful payments via eWallets; 22% according to Worldpay as we reported last time.

At the moment these payment methods are most notable in the closed loop of an App Store or Google Play environment, but they are also expanding quickly – you can use Apple Pay in Tesco already.


Two of the major considerations are security and risk. Gateways need to be both secure and user-friendly, but the balancing act is a difficult one. Consumer expectations are often contradictory. On the one hand, customers want a seamless and simple experience at check-out; but woe betides the provider if user security is compromised.

Take the solutions of ‘Verified by Visa’ and ‘Mastercard SecureCode’ for example; both work to provide users and businesses with a failsafe methodology for making and taking payments from your credit and debit cards.

When they first appeared, the need to remember passwords for routine transactions led to high levels of abandoned baskets and lost revenue. Lately though, the way in which these options work has been modified, so ‘smart fraud tools’ now elect whether to remove the password entry step. The net result is that verification now happens automatically in the vast majority of cases. The systems now only flag rogue transactions outside of the norms of your usage, or outside of set financial limits.

Understanding which transactions complete and which do not, and more importantly why, is critical to optimising risk. One online retailer we helped recently had not appreciated the level of failed transactions, so by tweaking their risk criteria, we helped them to drive down these false-positive fraud blocks and complete more transactions – resulting in a10% uplift in revenue.

Alternative payment methods such as Paypal – and the bank based methods mentioned above – rarely have a resilient charge-back solution to protect merchants and consumers. It is vital to check the terms and conditions of each solution; for example, some providers allow consumers to pull back their payments for up to 90 days post-transaction without challenge, leaving the merchant in a position where going through the courts to reclaim lost monies or goods is the only recourse.

Next time, we’ll look at the role of planning and cost. We’ll also look at how the transaction cost is only part of the picture, and how your internal departments can work together to ensure you provide the optimal solutions for you and your customers. Regulatory changes are coming in January, which will generate further innovation in the market and make it even more vital to be aware of the whole cost and the options available.

And if you feel we may be able to help in the meantime; whether you are looking to sell online for the first time, exploring new international markets, or considering what the optimal payment methods might be for your particular enterprise, please get in touch with our team.

To find out more information on our business consultancy services, please contact us.

Article by The Banking & Payments Team