Customers who are ready to purchase from your e-commerce store need a secure, quick, and easy way to checkout. WooCommerce offers a variety of business payment methods—card payments, bank transfers, digital wallets, and even Buy Now Pay Later (BNPL) options.
In a nutshell, offering multiple payment methods on your site provides greater choice. This can streamline your checkout process, boost conversions, and reduce cart abandonments. However, provide too many payment options—or the wrong ones—and you risk overwhelming your customers and incurring higher transaction fees.
This guide will help you to choose the best business payment methods for your e-commerce store. We’re going to do this through a six-step process that you can follow along with. At the end of the post, we’d love to hear about which business payment method you opted for and why!
1. Understand Your Business’ Needs
Aligning your business payment methods with your needs, goals, and capabilities is a crucial first step. Specifically, you need to consider your business model, volume of transactions, and the locations and preferences of your customers.
The business payment methods you offer may also depend on the products or services you sell. For example, if you’re selling digital products or services, you might require a payment gateway that facilitates recurring payments. If you’re an e-commerce retail store, you’ll want a payment gateway that provides instant, convenient payment processing.
For sites with a high volume of sales, the payment method has to be able to handle large-scale transactions. A growing business also needs to consider scalability. This is why Paypal can be a solid option:
There are a couple of other business consideration when choosing your payment gateway. If you serve customers on a global scale, your payment gateways must support the relevant regions and currencies. For example, Stripe supports hundreds of currencies, which makes it a viable and global option. On the other hand, BNPL services often have regional variations that might limit the experience.
Target demographics matter too. If yours primarily uses mobile devices to shop online, it makes sense to support digital wallets for online payments. Those wallets account for 50 percent of e-commerce transactions worldwide—most often by ‘Gen Z’ and ‘Millennial’ consumers. Other payment methods, such as credit cards, are more popular with older generations.
2. Evaluate Your Payment Gateway Options
Payment gateways authenticate, secure, and process the transactions from digital wallets, credit cards, debit cards, and others payment methods. WooCommerce supports a range of payment gateways such as Stripe, Square, and PayPal with global recognition. There are also niche services such as Rapyd and Mollie.
The process of installing payment gateways for WooCommerce is much like other WordPress plugins. However, you’ll often find a sandbox or test mode to help you carry out tweaks without using real transaction data or processing.
Choosing a payment gateway requires a few considerations. First and foremost are the transaction fees. In short, you need to pay a charge for every transaction from your store. This could be a flat rate per transaction or a specific percentage of the sale amount.
Many services offer fixed transaction rates of around three percent, with an additional processing charge of $0.30–0.50. This can quickly add up if you have high sales volumes, and could be astronomical if you deal with international transactions.
Creating an international WooCommerce store needs payment gateways that support cross-border payments and multi-currency transactions without incurring high currency conversion fees). For instance, if your gateway can only handle USD, customers in countries that don’t use dollars won’t be able to make purchases.
Some gateway websites will display supported locales, as Square’s WooCommerce extension page.
You could implement various country-specific gateways, but it can often be inconsistent to put in place. Plus, you can dilute the User Experience (UX), which will overwhelm customers and drive churn.
Speaking of driving more conversions and reducing cart abandonment, you should also evaluate your payment gateways based on what you know about your customer preferences.
Even on a global scale this is important to know. For instance, PayPal and Visa dominate the market, so those options should be available regardless of where you target. You’ll also want to narrow down which options align with your business type. For example, a pizza delivery service is more likely to use cash than cryptocurrency payments.
3. Consider Compatibility and Integration Scope
Ideally, the payment gateways you choose should integrate with WooCommerce to provide a smooth and consistent checkout experience. A gateway that’s incompatible with your e-commerce platform can be costly and time-consuming to fix. It can also lead to the same checkout processes that drive 14 percent of all cart abandonments.
Also consider integration with your other business tools, such as your Customer Relationship Management (CRM) platform and accounting software. This is crucial if you want an accurate view of your cash flow and payment processes, as you can get an accurate forecast of your profits and review the health of your business. For example, QuickBooks has a sync extension available for WooCommerce:
With a CRM integration, you can to store and sync that customer payment data to ensure you have a history that’s up to date and easy to access by different departments. This can streamline your online payments, reduce friction, and increase your opportunities for personalized upselling and cross-selling.
Of course, finding a gateway that syncs with both your choice of accounting software and CRM is another job that could take time—but offers immense value once you get it right.
4. Ensure Security and Compliance
Around 20 percent of consumers have been victims of a cyberattack. Password attacks, data breaches, Point of Sale (PoS) system malware, phishing, and identity theft are among the most common causes. So, performing a comprehensive evaluation of the payment gateways you use should be a top priority.
Payment processes will of course handle sensitive information such as card numbers and bank account details. A lack of security and compliance puts your customers at risk of theft, fraud, and various other cyber threats. In turn, this can damage your reputation, lose you money, and even bring legal repercussions your way.
The good news is most reputable payment gateways come with the checks and balances to ensure the data it processes uses the very best encryption. However, you should also check that the business payment methods you look at provide the security you need.
End-to-end encryption is a clear must, along with multi-factor authentication, fraud detection and prevention, and PCI-DSS compliance.
5. Prioritize UX and Consumer Convenience
A lengthy, complex checkout process can cause customers on the brink of conversion to abandon their carts forever. Long or complicated checkout processes are behind 22 percent of customer card abandonments. This tells us that choosing online payment methods that provides a streamlined, convenient UX is an important priority.
When it comes to your checkout experience, ‘streamlined’ can apply to a number of facets. We like to consider the following, especially when it comes to choosing the right business payment methods:
- Use integrated payment gateways. Hosted gateways navigate users off your site, which can result in a jarring experience. Consider using integrated solutions like the WooPayments plugin to minimize redirects and create a smoother, quicker process.
- Prioritize simplicity. Stay away from payment gateways and methods that force customers to enter lots of details or navigate through numerous pages. Look for a plugin that’s designed to be intuitive, with minimal redirects, autofill options, and other functionalities that simplify and speed up the checkout process.
- Offer multiple payment options. By offering multiple payment options, such as digital wallets, bank transfers, BNPL, and credit card payments, you empower customers to check out via their preferred method, reducing cart abandonment rates. In particular, BNPL payment methods can attract more customers and incentivize conversions.
We’d argue that this is a key component over almost all of the others on this list (apart from security). After all, the primary goal of your checkout should be to remove the barrier of conversion.
6. Carry Out Testing and Optimization
The testing process is one that many store owners will overlook when it comes to choosing business payment methods. However, it has to be a consideration at all stages. You’ll want to carry out regular testing and monitoring to optimize those payment processes and maintain your data security.
While the exact testing setup with differ depending on your goals, gateway, and resources, it typical involves many of the following:
- Simulating different types of transaction scenarios, such as mobile payments and payments from different credit card providers. This will look to uncover hidden inefficiencies or errors.
- Split testing different payment options to determine which ones your customers prefer.
- Monitoring Key Performance Indicators (KPIs) such as conversion rates, cart abandonment rates, transaction failures and successes, and average transaction times to gauge performance.
- Using customer satisfaction surveys to collect feedback on how satisfied customers are with your checkout process.
- Leveraging the data you’ve gathered from tests, KPIs, and surveys to continuously optimize your payment processes.
This process is crucial to ensuring your system processes transactions smoothly and to identify any potential issues that may impact the customer experience. Ultimately, by taking this proactive approach you’ll be better placed to deliver reliable payment processing and maintain customer trust.
Final Thoughts
At a fundamental level, the business payment methods and gateways you opt for depend on the unique needs of your business. Evaluating international payment capabilities, transaction fees, security and compliance, and the preferences and needs of your target customers covers most of your use cases. There will always be something specific to your own needs and uses though.
Ultimately, you should aim to offer multiple online payment methods to maximize your cash flow and boost sales. The goal is to empower customers to make payments quickly, effortlessly, and securely. Falling back on tried and trusted business payment methods makes sense in lots of cases, but it’s always worth investigating whether another approach could complement and benefit your primary solutions.
Do you have any questions about how to implement business payment methods for your WooCommerce store? Ask us in the comments section below!