Competition Heats Up Among Third Party Payment Services
By Greg Holden
Getting shoppers to your online store to press the Add to Cart button is one thing. But getting them to take the next step - sealing the deal by paying for their items - can be an even greater challenge.
It's probably no great mystery that trust and the effort involved in creating a user account are two of the barriers that keep consumers from making online payments. But if your own brand name doesn't yet inspire trust among shoppers, you have the option of "borrowing" the trust and fraud protection measures developed over time by some of the Web's biggest businesses. You can let consumers log in with their Amazon.com or PayPal account information and pay for your product through those services.
For Vancouver, British Columbia-based Cymax, one of the biggest and most successful online furniture sellers with more than $100 million in sales in 2013, trust is still an issue with prospective buyers.
When you prepare to purchase something on the Cymax store, you encounter several options when you get to checkout. If you click the button labeled Proceed to Checkout, you can either log in with your existing Cymax account, create an account, or purchase as a Guest customer. As an alternative, you can click one of three buttons just beneath the Proceed to Checkout button. These buttons enable you to pay with Visa's v.me payment service, with PayPal, or with Amazon.com.
Click Pay with Amazon.com, for instance, and you go to a page where you can login to both Cymax and Amazon with your Amazon account information.
"With Amazon, Cymax gains access to a customer base in the hundreds of millions in addition to gaining the recognition of their brand, which is known for its customer service," says Lar Quigley, Director of Corporate Development. "Having Amazon as a payment method adds additional credibility to Cymax and increases consumer trust. They also assume all responsibility for potential fraud; all transactions are pre-vetted before being received by Cymax."
Cymax and (according to Amazon) thousands of other businesses have signed up for the Amazon Login and Pay service. It was launched last fall in a bid to streamline the payment process for consumers and gain more sales for its merchants. Along with the trust associated with Amazon's name and the ease of logging in, there's another benefit for sellers who use the service, says Quigley: valuable customer data.
"Within Login and Pay, we receive the customer's name, email address and zip code when they log in," he explains. "This occurs before they check out. The timing is important as it gives us the ability to personalize the Cymax experience, which can be something as simple as a "welcome back" message or product recommendations based on past browsing or purchase behavior. In the end, the result is a great customer experience."
Login and Pay is new and it is being promoted by Amazon, but it's by no means the only option out there. You can also sign your business up to allow customers to pay with PayPal or another service like Square Payments.
Amazon Payments' fee for merchants - 2.9 percent plus 30 cents per transaction on items of $10 or more - is the same as PayPal Payments Standard. (For Visa's v.me service, the merchant fees are impossible to find - it appears you need to have an existing merchant credit card account before integrating the service on your site.)
Whatever payment options you offer, the point to remember is that you need to do everything you can do build trust and make checkout and payment as seamless as possible.
Cymax signed up with Amazon Payments in June 2013 and with the Login and Pay option in October. In less than a year, Amazon Payments accounts for 20 percent of the payments on their site.
Amazon does take out fees for its transactions, of course (they are listed at payments.amazon.com). But comments received by Cymax, like this one from a shopper: "Was a breeze to purchase. I also loved that I could sign in through Amazon," indicate that the convenience, trust and protection of a big name are what consumers want.
About the author:
Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.
You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.