With advances in eCommerce, online payment solutions are available for every market, product or service. Merchants collaborate with payment gateways to offer online alternatives to traditional payment methods, attracting more customers and increasing sales.
A report by ACI Worldwide and GlobalData estimates that by 2025, online payments in India will account for a whopping 71.7% of total payments, leaving cash and cheques to an abysmal 28.3%. Whether it is to capitalise on the spike in online shopping or ensuring business continuity amid a pandemic, merchants are increasingly turning to digital payment solutions.
Online payments are made through electronic mediums, over the internet. Service providers hosting online payments in India ensure security, speed, and simplified payment collection for the merchant.
While digital transactions help streamline payments for online businesses, they’re not entirely risk-free. Future online merchants need to consider both the benefits and the challenges that we explore in this article.
Here are some benefits enjoyed by brands and businesses that have adopted online payment systems:
Customers have increasingly begun shopping globally in search of the right product. Cross border businesses are estimated to amount to $3.53 trillion by 2022.
Online payments in India offer an edge to businesses seeking a global audience or looking to diversify their target market. It makes even a small business accessible to customers across the globe.
Online marketplaces can help build an international brand presence that attracts the right customers, regardless of where they are. To facilitate glitch-free international business online, merchants must introduce payment links.
Online payment gateways simplify adding international currencies and payment modes to help businesses scale globally in no-time.
Customers enjoy access to the global market at their convenience through online payment options. Real-time payment features of online platforms pave the way for quick order placement and instant order confirmation. Having these factors in place helps an international customer enjoy a no-fuss shopping experience, resulting in repeat business.
Online payment platforms offer an array of payment modes to the customer to choose from as per their convenience. With the help of the right online payment platform, merchants can offer a host of payment modes. Supporting both traditional and newer payment methods, like eWallets, Pay Later, and UPI, brands can connect with a larger customer demographic.
Reputable online payment platforms also offer payment links and QR codes that merchants can share with customers via messaging apps, sms or email to accept payments. Through the link, payments and invoices can be tracked and reviewed. In fact, merchants can also use the online payment links to issue quick refunds to their customers.
Compared to the traditional setting, online payment negates the need for more hands on deck and infrastructure to process transactions. This helps reduce overall business costs leading to larger profit margins for the merchant.
Most payment platforms do not charge setup and maintenance fees. However, they charge small transaction fees for selected payment modes that will be a fraction of what employing more people costs.
Companies with a subscription-based business model collect payments at pre-defined, regular intervals from the customers. Online payment platforms with a recurring billing feature helps automate collecting payments at regular intervals with minimal human intervention.
Therefore, customers can save their payment information and authorize regular payments for however long they want.
This directly translates into a happy customer who need not go through the same hassle each month.
With online payments in India, merchants can boost sales by expanding to the affiliate domain. Through affiliate marketing, external websites and brands can sell your product and services with online payment options.
These brands promote your product through online marketing strategies like social media or blogging. Major payment platforms have a wide affiliate network that merchants can explore to uncover new marketing opportunities.
In addition to the benefits, there are several challenges that can deter a brand’s growth if they don’t use the right online payments channel.
1. Risk of Fraud
Online payments expose both the merchant and their customers to a host of vulnerabilities and cyber fraud.
Online fraud can take the form of customer identity theft, hacking, account takeovers or even ‘friendly’ fraud like chargebacks. According to the Microsoft 2021 Global Tech Support Scam Research report, Indian consumers reported a 69% online fraud encounter rate last year.
Nevertheless, secure payment gateway platforms protect merchants and consumers alike from fraudulent transactions. Ensuring customers pay via payment links also solves this problem.
Platforms that are SSL certified for encrypted hosting on third-party and merchant websites are capable at staving off cyber threats. Added security layers like OTP and 3D authentication help maintain transparency with the buyer.
As with most technology solutions, online payments are susceptible to slow loading, lagging and server errors. Payment glitches and technical issues can lead to annoyed shoppers and hinder business operations.
Regular maintenance and bug fixes scheduled by payment platforms help counter these challenges. Merchants should check with their service provider about guaranteed SLA uptime and 24/7 tech support to stay ahead of these problems.
Online payment opens up more avenues for merchants to accept payments. They offer flexibility and scalability to all business verticals, from startups to enterprise.
Adding online payment features to your business website or app comes with some challenges. However, online payment platforms follow government regulations and offer guidelines for merchants to accept online payments securely.