E-commerce: other online payment services

Services such as PayPal enable users to pay simply by using an email address and password. Easy to set up, these services represent a good alternative for starting out in e-commerce. 

PayPal online payment services are based on a simple and effective idea: the user communicates their bank or credit card details just once and to just one company (in this case, PayPal). They can then make payments to all online stores offering this payment method just by logging on with their email address and a password.

During the payment process, the user is directed to the site of the service-provider, where they confirm the amount and pay. They are then returned to the online store site, where they receive an order confirmation.

This type of payment is also available for mobile applications.

Advantages for e-commerce

Services such as PayPal can prove advantageous for an online store launching itself in the world of e-commerce. They do not require any set-up costs and are quick and easy to put in place using a secure plugin. The service is paid for at the time of the transaction. The cost is made up of the following elements:

  • A fixed amount per transaction (for example, CHF 0.55).
  • Commission on the transaction amount (currently between 1.9% and 3.4% at PayPal).

In Switzerland, this payment method is becoming more democratic, although it is less well-known than in English-speaking countries. With this solution, online stores profit from the high number of pre-existing members. These individuals can become customers with just a few clicks.

For e-commerce sites recording large volumes of sales, it may prove wiser to use a traditional payment service-provider, which usually includes PayPal-type services:

Other payment methods

In addition to the usual electronic payment methods, online stores can offer traditional methods for paying for purchases, without necessarily using a payment service-provider:

  • Payment on invoice. This simple traditional payment method is well-known to all customers. The invoice can be included with delivery for example. But the trader runs the risk of late payments on invoices or unpaid invoices.
  • Early payment. This method allows the trader to be paid immediately, by bank transfer for example. However, this makes customers wary, since the e-commerce site could provide a faulty product or fail to deliver the order. To reassure the customer, the trader can include a delivery guarantee clause in its terms and conditions.

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Last modification 21.08.2018

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