#7 – Payment Methods & Transaction Fees

Payment Options:

• Credit/Debit/Prepaid Card Payments: Cards are the most popular worldwide payment method.
• Bank Transfers: Some e-commerce websites prefer to instruct their customers to make bank transfers directly to their accounts, often using an IBAN Number.
• E-Wallets: E-wallets, like PayPal and Google Pay, require customers and merchants to sign up and create accounts.
• Cash: Cash is still a popular way of paying online in India, Romania and Russia. Not offering a ‘cash-on-delivery’ service can potentially lead to you missing out in certain markets. In the UK, cash is most common for fast food orders below a certain price. For example, Dominoes say that you can’t s use cash if you order over £20 worth of food. This is mainly for security/ financial reasons.

Transaction Fees:

Due to recent events, transaction fees are not part of the equation of your e-commerce site. A new law has been put in place that the Government banned all charges for paying by credit or debit card.

Before 2018, cardholders are often charged fees of around 2%, but they can also be charged a flat fee regardless of how much they are spending. Here are some examples of fees that you might be saving on:

• Driver and Vehicle Licensing Agency (DVLA) - £2.50 credit card fee on all transactions.
• Council Tax – Ealing Council had a 2.5% credit card fee.
• Flights – Flybe charged 3% on credit card & PayPal transactions.
• Packaged Holidays – Thomas Cook had a 2% credit card fee.
• TV Packages – Sky Charged a 30p per month fee on recurring credit card payments.

You may be wondering why the rules are changed. Basically, the new rule stems from the EU Payment Services Directive, which laid out the changes on EU Governments and was put in force on the 13^th January 2018. This rule will continue to exist after Brexit.

In next week’s blog, we will be looking at the back-end operations of your e-commerce site.