With the abundance of e-commerce solutions for Joomla! it is very easy building a great looking on-line store, showcasing your products and effectively convincing your potential customers to add them to the cart. Beautiful images, obvious calls for action, unique selling points and a smooth online shopping experience are easy to setup and help you “seal the deal” with the customer. However, this is only half the story. One of the most overlooked business decisions when building any kind of e-commerce site is the payment method. It’s what affects the very last step of the online shopping experience and the single most frequent reason to lose a sale.

It’s all about the user experience

The most common payment methods found on e-shops are PayPal and Google Checkouts. How can they not be when they are so easy to setup and so versatile? Setting either method up requires nothing more than an email address, a credit card and a bank account. The registration process with them is very easy for the store owner. They support all credit cards, with the same rates. With integrations for them available in virtually all e-commerce solutions they look a perfect match for your site. Are they?

According to most on-line shoppers, these payment methods are as far from ideal as they can be.

Let’s take PayPal for example. Once your customer checks out, he is transferred to an external site to complete his payment. At this point, if you have not spent some effort to customize the checkout page and validate your business name to display on the PayPal payment page instead of your email, you are frustrating your customer. The first reaction to the different visuals is “where did the e-shop site go”. Even if they get past this first shock – presumably because you made it very clear on your checkout page that they’ll be redirected to an external site – they are confronted with a less-than-optimal experience.

They have to go through three distinct steps to pay for their goods and PayPal urges them to become registered users with it, even if they want to pay with a credit card.

Last, but not least, these payment processors do not have service availability in all parts of the world. If you are targeting a global market, you may be losing out on potential customers.

The story for the store owner is not very good either. PayPal and Google Checkout are not banks, they are payment processors. Since their income comes from the fees all store owners pay them for the transactions and the people using their service to transfer money, it’s not in their best interest to ensure a low chargeback rate for you. In fact, in the case of a dispute, the customer is more likely to win. If you are selling downloadable goods it’s highly unlikely that PayPal or Google Checkout will accept some proof of purchase, even a commercial invoice, as a valid argument not to refund the customer.

The alternatives matter

It’s quite obvious, but there are alternatives to the two major payment processors. There is an assortment of credit card processors, including your local bank, off-line payments and even cash-on-delivery. These payment options can be used either as the only payment solution or as alternatives during the checkout process. The latter method is more preferable as customers like choosing the best payment option for them.

The common theme for all of these options is that having them as alternatives gives your e-shop a touch of professionalism to the eyes of the customer.

If you were an amateur instead of a serious business, would you have gone into the trouble of integrating those alternative payment methods? It may sound corny, but it’s the projection of the customer’s off-line world experience to the on-line realm. Enhancing the customer’s confidence towards you is the best way to successfully do business with them.

Choosing which payment method to implement requires some knowledge about your target market.

If you are mostly selling to the US, go for credit card processing as your primary (default) payment method, due to credit cards being commonplace and widely used for off-line transactions. This might not work very well on markets where credit cards are treated with considerable doubt, like Greece. In fact, experience tells us that the most popular payment method on Greek e-shops is cash on delivery. Apparently this is not an option if you are selling electronic goods, like software downloads, but this can easily be fixed by allowing for “off-line payments”, i.e. a client depositing the amount he owes to your bank account.

Keep in mind that having PayPal and/or Google Checkout on top of those options can only be good for business, as some people might trust them more than giving away their credit card number – especially if you haven’t bought and installed a commercial-grade SSL certificate on your site!

Don’t go overboard

The flip side of lack of payment options is having too many of them. One of the most important directives when building a site is “don’t make me think”. If you are going to present your customer with a dozen different payment options, each one with a fancy name or a 10 word description, you’ve lost the sale. They are about to give their money, they don’t want to think too hard before they do. If you make it exceedingly difficult to figure out how they should pay you, they won’t. In fact, they’ll just go to your competitor with the inferior cart but superior checkout experience. You don’t want to let that happen. Strike a balance. Try different implementation ideas and see how well they fare. This trial and error approach is a key part to optimizing the checkout experience for your clients.

What are you waiting for? Get those e-shops optimized. The holiday season is about to begin!