Show Me the Money: Setting Up Payment Methods By Sally Curran
April 14, 2008
Time and time again, studies show that offering alternative payment methods increase sales (see related articles). After all, the more payment options an e-tailer offers, the more likely it is that shoppers will find a method that makes them comfortable with making a purchase online. And not everyone wants to share a credit card number on the Internet, even on a secure site.
As a shopper, you've likely used several of the more popular payment methods yourself, but when setting up a Web shop, exactly what do you need to do to provide a choice of payment methods to your customers? We outline the steps you need to take to incorporate three popular alternative payment options — Bill Me Later, Google Checkout and PayPal— into your e-business.
Bill Me Later Bill Me Later is an alternative form of payment that according to Vince Talbert, Bill Me Later's vice president of marketing, has 3 million users on 700 sites and 300 call centers across the world. He said his company offers a lower cost (than credit cards) and assumes the risk of fraud for both merchants and consumers (thereby guaranteeing merchants get paid).
Bill Me Later requires a merchant account, which is simply a line of credit a bank extends to a business so that it can accept payment by major credit card. If an online merchant decides to incorporate Bill Me Later into his site, Talbert said it's a fairly straightforward process. Simply contact Bill Me Later; a representative will lead you through the task required to fold the requisite data into the existing merchant account.
To get it up and running on a site, Talbert noted, is a two-fold process: One, there is some basic HTML work; and two, you'll need to complete some merchant processor database work. For instance, Bill Me Later provides sample code, including promotional messaging and a checkout screen that e-tailers use at their site. The Bill Me Later authorization response is designed to work just like a card authorization response to make it easy for merchants to store it in their systems. Merchants need to store the code for the response in their fulfillment/order management system so they can generate settlement requests just like they do for credit card processing.
Talbert said that the advantage Bill Me Later offers over its competition is that it is just as simple, if not more so, than a Visa or MasterCard transaction on both the front and back end. Consumers enter just a small amount of identifying data (a birth date and the last four digits of your Social Security number), and according to Talbert, authorization usually occurs within three seconds.
Google Checkout Google Checkout allows merchants to charge customers' credit cards, track orders through the fulfillment process and receive order payments in a bank account.
Unlike Bill Me Later, according to a Google spokesperson, Google Checkout does not require a merchant bank account. There are a range of integration options that correlate to various business needs, the spokesperson said, and you can integrate Google Checkout via Buy Now buttons, off-the-shelf shopping carts or the Google Checkout API (application program interface).
To integrate Google Checkout into a site, you must first obtain a merchant ID through the a simple Google Checkout sign-up process. You then simply copy and paste some HTML into your site. To avail yourself of more advanced features, such as different tax rates and the application of digital signatures, you must use either the provided HTML API or the XML API. For a bare-bones sort of application, you can also paste Buy Now buttons onto your site. After clicking Buy Now, a buyer signs into Google Checkout to confirm payment and shipping information. The merchant then processes the order through the Google Checkout Merchant Center.
The Google spokesperson said that Google Checkout's advantage is that it "enhances the effectiveness of [the] search and ads products...Checkout helps drive leads with the AdWords badge [and] increase conversions." Google also offers fraud protection that ensures sellers get paid for all orders that meet certain requirements. The spokesperson also said that Aeropostale, a clothing retailer, found that more that 90 percent of buyers who use Google Checkout on its site are new or have increased their purchasing.
(Continue to Page 2 for PayPal Set Up)
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