To find additional information on this vast topic, feel free to read the three preceding articles “Part I: A Forest Full of Trees”, Part II: The Agony of Choosing”, Part III: When gremlins strike”

Do you find our video tutorials useful? Then take a look at the tutorial-section on our website to find additional ones on a variety of subjects helping you to maintain and use your ePages onlineshop.

Video 1: General Setting and Paypal

Video 2: Setting up PayPal Pro

Video 3: Setting up PayPal Express in ePages

Video 4: Setting up Moneybookers in ePages 

Despite interactive wizards in the merchant back office, many errors can still happen when setting up the payment process in your shop. The third part of our series "Payment systems in online shops" shows you how you can prevent these, what to do when you are stuck and how to get faster answers for support requests.

The devil is in the details: A good portion of the ePages support requests are the result of typos when entering the payment user data in the merchant back office. Even if it seems self-evident, here are four tips that in our experience can solve up to 70 percent of all arising problems:

1. Make sure you enter the registration data for your payment provider correctly and completely in the merchant back office. The data is sometimes longer than the visible output field on the side of the payment provider. In this case, be sure that you have really transferred the full data with all parameters.
2. Pay attention to the correct use of upper and lower case.
3. Be sure that you have not mixed up "username" and "password" login fields.
4. Look again at the payment provider in your dealer account and make sure the payment process that you have selected in your shop is also actually enabled
    

If you have entered all the data of your payment supplier correctly, it’s time to test the payment. Almost all payment suppliers offer a "sandbox" test mode for this. The "sandbox" allows you to process testtransactions without consequences. So…

Let’s go to the sandbox!

You can find the function for activating the test mode in the "Settings" tab of the selected payment type. Even here, there can be errors waiting along the path to enabling your selected payment method. They arise through different approaches the providers use for handling the test mode.

The optional test: Most payment providers offer an optional test. That means that a test transaction can be performed with the merchant data. But this is not a requirement for the final enabling of the account.

The obligatory test: Several providers such as HSBC have a sandbox requirement. The merchant has to have successfully used the test mode one time in order for a payment account to be enabled. The help texts in your ePages shop will provide you with information about the respective procedure of the individual payment provider.

PayPal, the special case: With PayPal, the test works differently. Although the payment service provider from eBay does offer a sandbox, a test account must be created for this. If you have a merchant account at PayPal, this will not work in the test mode. You can apply for a PayPal sandbox account here: http://developer.paypal.com/

Once you have performed a test purchase, it’s time for a live test.

The live test

A requirement of a live test is that your ePages online shop is "open".

To do this, click in the "Settings" menu and select "General settings". You can find the "Status" submenu item under the "Status" tab. You can go live with your shop here. But take note! The moment you go live, the shop can be reached by everyone.

To prevent unwanted orders from happening, we recommend when setting up your shop for the first time that you initially create the payment system and then test the payment function with a single, inexpensive test product and only then entering in the actual products.

But what can you do when the shop is already running and you want to expand or replace your payments? In this case, withhold the new payment method from your customers until you have tested it yourself. To do this, proceed as follows:

Select the "Customer groups" item in the customers menu. Now create a new customer group in the menu that appears. Name it "Test customer", for example.

Now switch to the storefront and register as a new customer in your shop. After the registration process, switch to the back office again.

You can assign this to different groups in the "Customers" menu. Click on the newly created customer entry and then on the "Customer account" submenu on the "General" tab. Assign the newly created customer to the "Test customer" customer group.

After you have created a new test customer, ensure that the new payment method is also only available to this one. Click on the "Shipping and payment" item in the "Settings" menu. Then switch to the "Payment methods" tab. Select the newly created payment method by clicking on this.

Under the "Customer groups" tab, you can set which payment methods are available to which customers. Select "Test customer" and save the setting.

Now the road is clear for a test purchase with the new payment type. Switch this to "visible" in the payment methods menu and start your purchase. The new payment method is only shown in the shopping basket to the newly created test customer.

After you have made a successful live purchase, you can lift the payment method restriction and offer it to all customers. In certain circumstances, you may still have to create information texts for this new payment type under the "General" payment method.

Handling errors

Sometimes everything doesn’t always work right during the first start-up. In this case, it’s time to take advantage of support. To help get the right solution quickly, it’s important for you to gather as much information as possible. In addition to the selected payment, this also includes most importantly the following:

1. The exact error message: Make note of the error message. Copy it into a text document using copy & paste. The trained support personnel are often able to immediately determine where exactly the error is using the information in the error message.
2. Date and time of the transaction which led to the error message: If support cannot determine where the error is using the error message information, they will have to look in the log file to see exactly what went wrong with the transaction. The precise date and time information will help them with the search.

Support

If you want to contact the ePages support when you have difficulties with the payment, this is facilitated much more quickly if you contact support via e-mail and by telephone. The reason for this is simple: Since your support person often needs to work together with the corresponding payment provider, the error can usually not be solved directly during a telephone call. In this case, your ePages support person is reliant on the exact documentation of the error which you can best supply via e-mail.

Also important for support questions: Identifying the right contact person. If you can clearly see that the error message was issued by the payment provider then their support is the best contact for you. If the message comes from the shop software, then you should contact ePages support.

In the closing section of our "Payment systems in online shops" we show you four examples in detail for integrating the most varied payment providers into your shop. You can find the article here.

A customer walks into your shop. As the owner of a brick-and-mortar store, your mission is simple. The only question you need to concern yourself with in this moment is: “How can I persuade this customer to spend money here?” But this same task is more difficult for you as an online merchant. The question you must be able to answer is: “Precisely what form of payment might this customer use?” After all, the customer can and will purchase something in your shop only if you allow them to pay as they wish. We will explore this issue in Part Two of our “Payment Systems in Online Shops” series.

There are many different payment methods online. This is so because different external systems are used to ensure that every single transaction is handled properly. In Part One of this series, “Payment Systems in Online Shops: A Forest Full of Trees”, we sought to clarify matters and to identify the advantages and disadvantages of various payment systems. We will now take a peek inside your customers’ heads.

Three theories about your customers

1.    Your customers are cautious

Please have no illusions about it: the vast majority of customers who enter your online shop will leave it empty-handed. Conversion rates of 3 to 6 percent are the rule rather than the praiseworthy exception in online business. Over 90 percent of potential customers thus ultimately leave without making a purchase. One reason: insufficient trust in you as a merchant. If a customer does not know you, then they are unlikely to take a leap of faith and blindly trust you.

The “E-Commerce Survey Project” (in German only: “Projekt E-Commerce-Leitfaden”) by ibiResearch examined the impact of various payment methods on sales. Customers were explicitly asked about their willingness to purchase via various payment methods. One key insight: customers dislike paying in advance for services which have not yet been performed — particularly if nobody guarantees that the order will be handled properly. If pre-paying is the only option, for example, then nearly 80 percent of the survey’s respondents would leave the shop and search for a different online shop. Astonishingly, the cost of items in the shopping basket plays little role in the decision-making process; nor is it especially relevant that three quarters of the respondents have pre-paid for an online purchase at some point.

If a merchant also offers payment via bill, then the percentage of potential customers who prematurely terminate a visit to an online shop sinks from 80 to 10 percent. Very few people under these circumstances would forgo an opportunity to take a look at the goods before paying.

All remaining payment methods have a less significant impact on the percentage of people who leave an online shop without making a purchase. Assuming that some 80 percent of visitors to a given online shop would otherwise leave without buying anything, this figure can be cut in half by offering the option of paying via credit card, payment service provider or direct debit. Offering a variety of payment methods further reduces the percentage.

2.    Your customers are country-specific

No merchant should apply the same strategy to Germans, Americans and the French. Customers from different countries tend to prefer certain payment systems. This does not exactly make it easier for a merchant to administer a shop, provided that they wish to appeal to as many customers as possible.

A few examples will illustrate this point. If you primarily sell to German customers, then you will likely have to offer payment via bill if you hope to reduce the percentage of people who depart without buying.

If your customers tend to be in the United States, on the other hand, then it is a different matter altogether. Payment via credit card is namely extremely common in the USA. Because so many people in the United States have credit cards, almost 90 percent of all online transactions are paid for by credit card.

In the Netherlands, by contrast, a majority of online purchases are processed via iDEAL, similar to Germany’s giropay; in France, the "Carte Bleue" is indispensable. Moneybookers, a payment service provider, offers a good overview of country-specific methods of payment: http://www.gruenderszene.de/wp-content/uploads/2009/05/funding_table_europe.pdf

3.    Your customers are unique

Your target group and therefore your customers’ predominant method of payment depend on the products you sell online. It is essential that you, as an online merchant, make the right decision in this regard.
Let us say, for example, that your online shop sells computer games and console games — and thus appeals to a relatively young target group. Because many of your potential customers do not (yet) have a credit card, you must offer them an alternative method of payment. If you sell ultra-premium wines online, then your customers will want to pay with credit cards for a higher percentage of purchases.

An Unsatisfactory Conclusion

Unfortunately, we cannot provide any universally applicable guidelines concerning the selection of ideal payment methods for your online shop, as decisions must be made on a case-by-case basis in light of situationally specific circumstances.

In conclusion, two pieces of advice:

1.    Focus on your bottom line.

Closely examine your customers’ purchases and decide which payment methods you can perhaps do without. Calculate the costs associated with different payment providers and estimate the impact of no longer partnering with a given provider.

After all, it is not necessarily sensible to offer your customers every available method of payment. The E-Commerce Survey Project provides an impressive model calculation with regard to this very topic. In this case study, it is true that the shop which uncompromisingly focuses on sales is indeed the most successful at first glance. Yet this same shop ultimately earns less net income, due to non-payments, than a merchant which grosses less revenue yet does so exclusively via payments in advance. You can access this revealing case study (in German only) at: http://www.ecommerce-leitfaden.de/fallbeispiel.html

2.    Electronic payments are your key to eBay

If you want to sell your products on eBay, you must use an electronic method for transactions — be it PayPal, Moneybookers or payment by credit card. Neither payment via bill nor pre-payment will suffice. This has been the case since eBay implemented more stringent payment requirements for commercial merchants in August 2008. As a result, commercial merchants must offer customers at least one electronic method of payment in the case of auctions or Buy It Now on eBay. This rule does not apply to a handful of special categories of products, such as vehicles, boats and real estate. The online auction house took this step to enhance security for customers while bolstering its own method of payment, PayPal.

Details on this matter can be found here: http://pages.ebay.com/sell/August2008Update/OtherFAQ/#3

Category 2: Payment with safeguards

The “Payment with safeguards” category includes all payment methods which do not require customers to register with a payment service provider. Moreover, merchants and customers alike can be certain that payments will be processed securely and sensitive account information handled confidentially. This category thus encompasses all payment service providers which document and monitor the digital handshake between merchant and customer.

Types of “Payment with safeguards” include paying via COD and payment providers which facilitate payments by various methods which require no registration. Depending on the country and hosting provider in question, in ePages 6 you can select from the following payment providers: Payment Network (sofortüberweisung.de), Moneybookers, Saferpay, ExperCash, RBS WorldPay, Authorize.Net, Credit Mutuel Banque, HSBC, PayPoint.net, Sage Pay, ServiRed and SIPS Atos (Atos Worldline). They all offer customers — without additional registration — various payment methods such as credit-card payment, giropay (Germany), iDEAL (The Netherlands,) CyberMUT (France) or 4B (Spain).

COD
In the case of payment via COD, the local postal service guarantees that the payment is processed on delivery. The advantage for not only merchants but also customers: both parties can use this service without having to sign a rigid contract with a service provider or to provide bank-account information.

Payment providers

As a rule, there are two ways to pay via payment providers: by credit card or by direct transfer.

Payment by credit card

Moneybookers, Saferpay, ExperCash, RBS WorldPay, Authorize.Net, HSBC, PayPoint.net, Sage Pay, ServiRed and SIPS Atos (Atos Worldline) are the principal payment providers at your disposal when you set up your ePages shop. All of them offer payment methods for at least one credit card, if not various credit cards.

For all of them, set-up in the shop is more or less the same: the merchant must open a fee-based merchant’s account with the payment provider prior to use. The merchant can then enter the registration data they receive in their ePages shop and offer to customers the provider’s services.

Customers do not need a special customer account for each individual payment provider. They simply need to enter their credit-card information to pay for an order. In addition, their credit-card information is secure because it is submitted not to the merchant but rather to the payment provider. The latter verifies the card’s information, obtains the necessary sum from the customer’s credit-card account, and transfers this sum to the merchant.

The reliance on a payment provider in an ePages shop benefits both parties. Merchants thus reduce the risk of financial losses. Payment issues, caused perhaps by insufficient account funds, are addressed by the payment provider — which, as per the merchant’s request, assumes responsibility for collecting any outstanding payments. Merchants also benefit from the trust which customers place in these established payment providers.

Customers enjoy advantages, too. Because money is transferred quickly, their orders are shipped at once; furthermore, their credit-card information is handled very securely.

Payment by direct transfer

As for the second method of payment which online merchants can offer their customers via various payment providers such as Moneybookers, SaferPay or ExperCash, the payment process occurs in a different manner: money is directly transferred by the customer. Therefor the providers utilise country-specific payment standards such as giropay (Germany), iDEAL (The Netherlands,) CyberMUT (France) or 4B (Spain).

Only the merchant must create a fee-based merchant’s account concerning such services. Customers do not require any special registration. After a customer clicks on “Pay” during the order process, they see a payment page. The payment provider has specified in advance the purpose of payment in accordance with the shop’s requirements and contacts the customer’s bank. The bank processes the request for funds by requesting a Transaction Authentication Number (TAN), which the customer must enter. The bank then completes the transfer and notifies the payment provider, which in turn provides confirmation of the aforementioned to the merchant. The latter can then prepare the order to be shipped.

This is advantageous for the merchant in that, in one fell swoop, it can ensure secure payment via multiple banks simply by partnering with a payment provider. Payments are simply part of the purchasing process and are documented by the payment provider. The laborious tracking of payments becomes a thing of the past — even though payments are done via bank transfer. Merchants also benefit from the considerable trust which customers place in these established payment providers and in the standardised payment methods.

And customers appreciate having to share their bank-account information with the payment provider only and not the merchant. The use of a TAN ensures that only that one payment will be processed – a TAN is valid for just one transaction.

Category 3: Payment with virtual wallet

The “Payment with virtual wallet” category includes all providers which require that a customer has a customer’s account to facilitate payments. This means that customers do not need to use a credit card, because the payment provider advances money for all orders and ultimately debits the sums from purchasers’ accounts. The payment provider thus pledges to pay all transaction sums. Payment providers in this category serve, in a sense, as providers of a digital credit card or a virtual wallet.

The key providers of virtual wallets such as PayPal enjoy great trust among customers due to their reputation for online security. This is good for merchants: they can increase conversion rates in their shops by partnering with such service providers.

Merchants and buyers alike benefit because they can rest assured that their transactions will be executed via a secure payment process; moreover, the laborious tracking of payments becomes unnecessary. Orders can thus be shipped at once.

Customers must register with various payment providers, however, since different shops partner with different providers. This often frustrates customers, even though customer accounts tend to be free of charge.

Problematic for merchants: different payment providers enjoy different levels of popularity among various target groups. It can thus be necessary for merchants to create numerous fee-based merchant accounts in order to accommodate every target group.

Payment providers which require a customer account and are offered in ePages 6 are PayPal, Moneybookers, ClickandBuy, T-Pay and Google Checkout.

Part II: The Agony of Choosing

Categorising various payment methods helps merchants choose appropriate methods and providers for their shops. Depending on the target groups in question, countries to which purchases are shipped and the respective goods sold, it can make sense to allow various methods of payment.

In the second part of our series, entitled “Payment Methods in Online Shops II: The Agony of Choosing”, we will let you know what you should pay close attention to when choosing and how different payment methods can have different effects on your shop’s conversion rate.

We will publish the second part next week in the ePages Blog.

Yet there is a practically limitless range of payment systems. Our four-part series of articles entitled “Payment Methods in Online Shops” will help you find the right provider for your ePages online shop and explain what you need to be aware of concerning activation. In “Part 1: A Forest Full of Trees” we will help you by shedding light on some key matters.

Payment in advance, COD, bill, credit card, direct debit, PayPal, Google Checkout, Moneybookers, T-Pay, Saferpay, and many more. A lot of online merchants are driven to despair by the sheer magnitude of payment possibilities. “Which ones should I offer to my customers and how many payment methods are sensible per shop?” “What advantages and disadvantages do Method A offer for merchants and customers? What about Method B?”

In order to see the forest above the trees, it makes sense to categorise the seemingly countless variety of payment methods wooing merchants and customers these days. Surprisingly enough, every payment method belongs to one of just three categories: “Payment without safeguards”, “Payment with safeguards”, “Payment with virtual wallet”

Category 1: Payment without safeguards

The “Payment without safeguards” category denotes all payment methods that do not involve an additional service provider which guarantees on behalf of the customer or merchant that payments will be properly processed. If a transaction is to transpire, then the customer or the merchant — or both — must take a leap of faith and blindly trust the other party.

Types of “Payment without safeguards” include: payment in advance, payment via bill, direct debit, manual credit-card payment (without external provider).

Payment in advance

Payment in advance is the most straightforward of all payment possibilities: items are shipped as soon as the customer transfers the necessary funds.

A sure thing for the merchant, though it entails more work: the merchant must regularly check their account to determine which orders have been paid for and can be approved for shipment.

Customers often dislike paying in advance. Small wonder: they must part with their money before the goods are even shipped. On the other hand, they can rest assured that the merchant cannot access confidential account information.

Payment via bill
This remains one of the most popular methods of payment among customers, especially in Germany. After all, they know that their bank information will be protected and that they can take a look at the goods before paying. A lot of customers thus prefer online shops which offer the option of payment via bill.

Merchants must consider the pros and cons. On the one hand, they bear all of the risk. They ship goods with the expectation that the customer will pay upon receiving them. And if payment problems arise, then debt collection is not necessarily worthwhile — especially in the case of relatively small sums of money. The resulting percentage of financial losses can however be offset, for example, by the higher volume of orders due to the option of payment via bill.

Merchants who are considering whether or not to offer payment via bill should also acknowledge the correspondingly considerable commitment with regard to tracking payments. The monitoring of such orders requires substantial amounts of time; unpaid bills must be identified and debt-collection procedures executed.

Direct debit

In the case of direct debit, a merchant has a fee-based contract with their bank which permits the merchant to debit payable sums from customers’ accounts. Customers consent to this method by providing their bank information in a shop’s payment form.

This can be risky for a merchant: in the case of non-payment, e.g. a customer’s bank account has insufficient funds or a customer ultimately demands re-payment, then the merchant loses money. Yet by the time the merchant becomes aware of non-payment, the goods have long since been shipped and payment is unlikely. Merchants who wish to minimize such risks require a supplementary fee-based insurance policy issued by their bank.

Not all customers are willing to divulge their account information, which entails an elevated risk of misuse. Yet willingness rises in accordance with a shop’s reputation and the respectability which a website broadcasts (e.g. by means of a seal of certification, such as those by Safe Buy or Confianza Online).

Credit card, manual

As with direct debit, a merchant must first sign a fee-based contract with their bank in order to obtain payment from customers’ credit cards in the case of manual credit-card payments. Customers are asked to provide their credit-card information to the merchant to conclude a transaction in an online shop. Merchants are unable to determine, however, whether or not customers use stolen credit cards. Merchants must then assume any losses, unless they have a supplementary fee-based insurance policy issued by their bank.

Customers are more willing to pay with credit cards than via direct debit – especially in the Anglo-American regions. Many potential customers nevertheless hesitate to pay with a credit card, for they must submit confidential data to an unknown party. A seal such as Trusted Shops helps to persuade customers.

Tomorrow, we will publish the second part of “Payment Methods in Online Shops — Part 1: A Forest Full of Trees”, in which we will focus on the two remaining categories: “Payment with safeguards” and “Payment with virtual wallet”.

What’s been going on functionally in our shop since the introduction of

It’s already been several months since the launch of ePages 6. Below, the highlights that have been added since then:

• Payment method Expercash (formerly easyDebit) becomes standard
• "Free shipping" with eBay integration made available
• Forum and blog entries available as RSS feeds
• Integration of video tutorials in the administration area
• Automatic creation of a Google sitemaps file
• Automatic detection of the local VAT rate and the VAT-ID after a customer entered his VAT-ID on the customer registration page
• Product review request per e-mail
• Linking of the ePages blog (with help topics) from the administration area
• Display of product numbers in the shop (optional)
• Selective CSV export of objects such as customers or products
• Meta tags can be manually written in the "head" section of pages
• Update etracker to Version 3.0

Also planned for this year:

• Enhancements for SEO (e.g. Google AdWords)
• Enhancements for eBay integration
• Zanox integration
• WebServices enhancements

For operators of shops based on ePages 6 Merchant, the new features are fully available starting with version 6.04. You can find out from your provider whether and which of the new components are also available in rental shops.

By the end of  Q3 ‘09 all ePages hosting partners are expected to be working with ePages 6. The following hosting providers are already operating e-commerce products based on ePages 6: Amen, Beepworld, NTT Europe, Group NBT, XXLWebhosting, Pins, Gagar, Hamburger Abendblatt, BT, OBS, DaySie, EasySpace and Ballou. More about ePages 6.