Published on 19.01.2017

How NOT to set up online payments

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You google how to set up online payments. Ads from different providers flood your search. Next come links to their FAQ sections. Then some generic how-to articles. Should you set up payments by trying out all payment providers?

Please, don’t. Our team at Swipe Gateway has already done that: 70% of our client’s invoices are paid on time in just 2 clicks, remembering card details and offering recurring payments. We hope our tips help fellow entrepreneurs avoid common pitfalls and set up payments more smoothly.

What to look at when choosing payment providers? Should you do it yourself? What are common pitfalls? Real-life answers to these and more questions below:

#1 Don’t try to do it all yourself

Unless you are in the payments business, do not try to set up your own payments system. The Web keeps growing and changing fast. Payment providers have full-time teams dedicated to following the latest developments and embedding them into their products. Trying to do it all yourself leaves no time to serve your actual customers.

#2 Don’t jump at the first solution

It is tempting to click on the first Google ad and start accepting payments with the most popular provider. They may have quick onboarding, easy setup or have a well-known name. But don’t think this means they are right for you. Read terms and conditions, always request a trial, don’t be shy about asking silly questions and never agree to significant upfront costs and commitments before you see value.

#3 Don’t assume your provider has 24/7 support

Always ask about support terms. Don’t assume that if they have a live chat window, your support will be faster. Some just plug it in to look better but still use the same old systems behind the scenes. You don’t want a provider who works in a completely different timezone and answers trivial questions after 24h.

Why? We have experienced different support terms, including a provider with live chat window whose entire team went on a Christmas vacation. Not a single person there to answer your question if something goes wrong. Don’t risk one of year’s most profitable sales periods with providers like this.

#4 Don’t delay choosing a provider

I hope my previous warnings don’t make you think it is too hard to choose a good provider. You can start with anyone who has a trial with an easy way out, while you explore other options. Having any provider with an easy way out is better than having no provider, which in turn is better than having a provider that is difficult to switch from.

Why? Every day you go without an online payment option is a day when someone wants to buy from you and can’t. We were not satisfied with our provider when we built Swipe Gateway, but we did not abandon them until we had something better.

#5 Don’t be shy to ask what you are paying for

Some providers give you a lower rate but charge your customers a processing fee. Some give you a seemingly higher rate but give you extra features, are faster or more reliable. Don’t be shy to ask about fees and where the number is coming from.

Why? We tried choosing providers based on price only. Didn’t turn out well. If someone offers you a rate notably lower than the market average, they are likely cutting corners: worse support, surprise fees, slower processing, different rates for different countries, extra charges to your customers. However, if a fee is slightly lower than market average they may have a better deal with their suppliers, be more focused on new customers or have dropped features that most customers do not use. That’s why it makes sense to ask.

#6 Don’t ask customers many questions

Ask a lot from providers, ask as little as possible from customers. If they have submitted their payment details once, make sure you retain them for future use. Sometimes, you may even google their details and only let them approve.

Why? 70% of our clients’ invoices are paid instantly because it only takes a few clicks. We have learned that most people have the money to pay right away but lack patience if it takes more than 1-2 minutes. 80 percent of inboxes have between 72 and 21,000 items. If your invoice is not simple enough to process in one to two minutes, they think “later”, which often becomes “never.”

#7 Don’t give all customers the same payment terms

Business Zone recently explained cash flow differences between small businesses and big companies. It is tricky if you are stuck in the middle. Good payment providers will let you alternate between payment terms and allow for automatic recurring subscriptions whenever applicable.

Why? If you are invoicing a big company that pays all its bills on 15th of each month, you better do it around 10th. If your customer is paying for the same service every month, you better charge them automatically, so they don’t waste time and don’t have one more occasion to think if they aren’t paying too much. If your customers have tight budgets, offer an option to pay in automatic installments.

#8 Don’t neglect following up with customers

At the end of each month, you sit down with a pile of unpaid invoices and start following up. It would be great to follow up throughout the month, but you are too busy. Guess what? Everyone else is following up at the same time. What can you do? Some invoicing services will offer automatic reminders. Test them out first to see if that decreases your pile of unpaid invoices.

Why? If you follow up consistently, you establish an orderly reputation and are perceived as a person who cares about getting paid. Making it easy to pay helps with customers who have money but no time. Making it hard not to pay helps with those who have limited cash and no time.

While Swipe Gateway is built around instant payments and makes it easy to implement these tips, they are compatible with any online payments system. I hope this post helps your cash flow. Feel free to reach out with comments and questions.

Originally published on Jan 15, 2017 as a guest post on Business Zone.

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