Ecommerce Payments Systems to Drive More Revenue

Illustrations by Drishya Subramaniam

Embrace the digital age with efficient and secure e-commerce payment systems that revolutionize the way businesses operate. Explore the features and benefits of secure e-commerce payment methods like credit/debit cards, digital wallets, net banking, and more, ensuring convenience and trust for customers worldwide.

E-commerce Payment Systems

Let’s assume a scenario: You have found your favourite product online, available in your preferred fit/size and also in stock. You quickly add it to the cart and proceed to the checkout page with a sense of relief. But as you are taken to the payment page, you will face a common frustration: limited payment methods, confusing user interface and, most importantly, security concerns.

E-commerce has revolutionised how businesses operate, providing convenience and accessibility to global customers. But the challenge faced by the customers is often in the payment process. Evidently, these obstacles were recognised and rectified by developing innovative payment systems that are seamless and secure. Tailored to the needs of online customers, these e-commerce payment systems enhance customer experience, inculcate trust in the business/merchant and provide an efficient and hassle-free way to complete transactions.

What is an E-commerce Payment System?

The technological infrastructure facilitating secure and convenient online transactions between customers and a business in the online marketplace is the e-commerce payment system. It offers customers a wide range of payment options by integrating various payment methods. An e-commerce payment system includes credit/debit cards, net banking, e-wallets (digital wallets), mobile payment apps and more as modes of payment. This system ensures secure transactions through encryption and advanced security measures, which builds trust and confidence for the customers in the online shopping experience.

The e-commerce payment system plays an essential role in driving the growth of the online marketplace by reducing the hurdles in completing online transactions. It enhances customer satisfaction, increases sales, and expands business opportunities.

Payment Flows in eCommerce

The checkout is the moment of truth where the cost of customer acquisition converts into revenue. A smooth payment experience can lead to a lifetime customer, while a broken flow will lead to customer frustration.

Merchant expectations for payment providers regarding the checkout process and integration can be summarised as follows:

  1. Support for Customisable Flows: Merchants expect payment providers to offer flexibility in payment flows to align with their requirements. This includes both seamless integration, where the checkout page is hosted by the merchant, and non-seamless integration, where customers are redirected to the aggregator’s payment page.
  2. Mobile SDKs for Android and iOS: Given the importance of mobile as a sales channel, merchants require mobile SDKs for Android and iOS platforms. These SDKs enable smooth integration of payment functionality into mobile apps, providing a seamless experience for mobile users.
  3. Integration with eCommerce Platforms: Many merchants utilise popular eCommerce platforms like Shopify or WooCommerce. In such cases, they expect payment providers to offer plugins or integrations specifically tailored to these platforms. These plugins simplify the integration process and ensure compatibility with the merchant’s chosen eCommerce platform.
  4. Simplicity and Ease of Integration: While there is a strong developer community, merchants still prefer integration processes that require minimal effort. They expect payment providers to offer APIs and SDKs that are simple, well-documented, and easy to integrate into their existing systems. This reduces the time and effort required for implementation and allows merchants to focus on their core business activities.
  5. Availability: Payment systems are expected to be reliable and available at all times. Downtime or disruptions in the payment system can result in lost sales opportunities and frustrate customers. Merchants rely on payment providers to ensure that their systems are robust, stable, and capable of processing transactions consistently without interruptions.
  6. Scalability: During peak periods or when merchants run promotional sales campaigns, transaction volumes can spike significantly. Payment systems need to be able to handle these sudden surges in transaction volumes without any performance degradation or disruptions. Scalability is crucial to ensure that the payment system can handle the increased load and process transactions efficiently without delays or errors.
  7. Payment Gateway Selection: Choose a reliable and robust payment gateway that has a high success rate and supports the specific needs of your business. Research and compare different payment gateways to find one that offers the best performance and reliability.
  8. User Experience: Streamline the checkout process and make it user-friendly. Simplify the payment flow, minimize the number of steps, and provide clear instructions to customers. A smooth and intuitive checkout experience reduces the likelihood of errors or customer drop-offs during the payment process.
  9. Error Handling: Implement effective error handling mechanisms to handle any issues that may arise during the payment process. Provide informative error messages to customers in case of payment failures, guiding them on the next steps to complete the transaction successfully.
  10. Payment Method Variety: Offer a wide range of payment methods to cater to the preferences of your customers. Different customers may have different payment preferences, so providing multiple options can increase the chances of a successful transaction.
  11. Fraud Prevention: Implement robust fraud prevention measures to protect your business and customers from fraudulent transactions. Utilise fraud detection tools and employ best practices for transaction security, such as tokenisation and encryption.

Payment providers are expected to have the necessary infrastructure, technology, and capacity planning in place to handle both normal and peak transaction volumes. This may involve implementing load balancing mechanisms, auto-scaling capabilities, and leveraging cloud-based solutions to ensure the payment system remains responsive and performs optimally even during high-demand periods.

By meeting these expectations for availability and scalability, payment providers enable merchants to process transactions seamlessly, maintain business continuity, and capitalise on sales opportunities during peak periods without any technical limitations or interruptions.

It’s also important to consider that the success rate of transactions can be influenced by various factors, including customer demographics, purchase intent, and even the merchant’s own systems and payment flows. Therefore, a holistic approach that takes into account all these factors is essential for optimising the success rate of transactions.

In summary, merchants value payment providers that offer customizable flows, provide mobile SDKs, offer integrations with popular eCommerce platforms, and prioritise simplicity and ease of integration through user-friendly APIs and SDKs. Meeting these expectations helps merchants ensure a seamless and hassle-free payment experience for their customers, ultimately leading to higher conversion rates and customer satisfaction.

Let’s take a look at the different types of E-commerce Payment systems.

Different Types of E-commerce Payment Systems

An e-commerce payment system involves various methods and technologies that ensure the secure transfer of funds electronically. Let us explore some of the vital e-commerce payment systems.

Different types of e-commerce payment systems cater to various customer preferences and needs:

  1. Credit/Debit Card: One of the most common online payment methods customers use is credit/debit cards. Through secured payment gateways, customers can make purchases using their credit or debit cards.
  • Credit Card - Users need not pay upfront; they can use the credit limit and repay later.
  • Debit Card - Deducts money from the user’s bank account instantly at the time of the transaction.
  1. Digital Wallets: Consider a normal wallet you carry with cash and coins in it. A digital wallet, also known as an e-wallet, is the same where your wallet and cash are both online. All you have to do is connect your digital wallet with your bank account or any of your cards and load your digital wallet with some money. Now, instead of using your bank account or any card during any transaction, you can use your e-wallet directly and complete the transaction.
  2. Net Banking: Net banking enables customers to make online payments directly from their bank accounts, providing a secure and familiar payment option. All you have to do is log in to your bank account through a website or an app, enter the details of the merchant’s bank account to which the money has to be sent and make a transaction instantly.
  3. Prepaid Cards: Prepaid cards work similarly to debit cards and can also be used in ATMs to withdraw cash. You have to load a specific amount of money into the card and use it for online purchases. These cards provide a controlled spending option and are particularly useful for budget-conscious shoppers.
  4. Mobile Payment Apps: Mobile payment apps have gained prominence with the rise of smartphones and UPI. Some prominent mobile payment apps are PhonePe, GooglePay, PayTM etc. You first have to connect your bank account or any card with these apps. Secondly, while making any purchase on e-commerce sites, you can use these apps and authorise transactions easily. These apps allow users to make payments, transfer funds, and even split bills using mobile devices, providing convenience.

Essential Features of a Customer-Friendly Payment Infrastructure

E-commerce payment systems intend to streamline transactions and enhance customer experience with various features, empowering businesses to accept payments securely. An efficient e-commerce payment system should possess the following features:

  1. Security: One of the fundamental features of an E-commerce payment system is to have robust security measures that include encryption and fraud detection that safeguards customer payment information and prevents unauthorised access.
  2. User-Friendly Interface: A simple and intuitive interface that simplifies the payment process for customers will reduce cart abandonment rates.
  3. Multiple Payment Options: Integration with various payment methods to cater to diverse customer preferences will increase the likelihood of completing transactions.
  4. Mobile Compatibility: Support for mobile devices, ensuring a responsive and optimised payment experience for customers using smartphones and tablets.
  5. Fast Transaction Processing: Efficient payment processing that ensures quick authorisation and settlement, reducing customer wait times and improving satisfaction.

Advantages of an E-commerce Payment System: Driving Business Success

Maintaining a healthy cash flow is crucial for any business to operate seamlessly. Therefore,  numerous businesses are embracing the adoption of e-commerce payment systems to streamline their transactions. This is empowering businesses to accept payments securely and thrive in the competitive online landscape. However, the benefits of e-commerce payment systems are not limited to this, and businesses can reap significant advantages such as:

  • Expanded customer base and increased market reach.
  • Improved conversion rates and reduced cart abandonment.
  • Enhanced security measures, protecting customers and businesses from fraudulent activities.
  • Streamlined transaction processing, leading to faster order fulfilment and improved customer satisfaction.
  • Access to global markets, enabling businesses to cater to international customers.
  • Integration with various payment methods, catering to diverse customer preferences.
  • Convenient and seamless payment experience for customers.
  • Offering subscription services with automated recurring payments, ensuring a hassle-free experience.
  • Personalised offers, discounts, and loyalty programs linked to e-payment methods encourage customer retention.
  • Quick refunds and efficient dispute resolution processes, building trust and maintaining customer satisfaction.

Growing Customer Retention and Loyalty

By leveraging the power of an e-commerce payment system, businesses can strengthen customer relationships and drive long-term success. Implementing an electronic payment system in e-commerce can maximise the benefits, such as increased customer retention and loyalty, in the following ways:

  • A smooth and hassle-free payment experience for customers will enhance customer satisfaction.
  • Subscription services with automated recurring payments will simplify payment management for customers, allowing them to enjoy uninterrupted access to products or services.
  • Personalised offers, discounts, and loyalty programs linked to e-payment methods will enhance customer engagement and incentivise repeat purchases, fostering loyalty and building solid customer relationships.
  • Quick refunds and efficient dispute-resolution processes will instil trust and confidence in customers towards the business.
  • Enhanced security measures, such as 2FA (Two-Factor Authentication), will provide an additional layer of protection, safeguard customer information, and mitigate the risk of unauthorised access or fraudulent activities.
  • Multiple payment options will cater to diverse customer preferences, ensuring the flexibility for customers to choose the payment method that best suits their needs and convenience.
  • Integration with mobile payment apps allows customers to make payments on the go.
  • Streamlining the checkout process helps in reducing friction and improves the overall shopping experience.
  • Giving access to detailed transaction history and digital receipts for easy reference enhances transparency. It enables customers to track their purchases, review past transactions, and maintain a comprehensive record of their financial activities.

Embracing the Digital Shift: Transitioning to an E-commerce Payments Platform

In today’s rapidly evolving digital landscape, understanding the complexities and challenges that arise along the journey of building, refining, and growing a business becomes crucial.

With JusPay, businesses can harness the power of a robust and innovative e-commerce payment platform to elevate their customer experience and drive growth through a secure infrastructure. Our cutting-edge solutions have transformed the payments landscape, turning transactions into a growth lever for businesses across India.

By partnering with Juspay from the early stages, leading companies have unlocked new opportunities and achieved remarkable success. Explore JusPay for your business and watch it thrive exponentially.

FAQs About E-commerce Payment System

  1. Are security standards necessary in an e-commerce payment system?
    Yes, security standards are fundamental in an e-commerce payment system. Ensure that the payment system you opt for implements robust security measures, such as encryption and fraud detection, to safeguard customer payment information and protect against unauthorised access.

  2. How important is user experience in an e-commerce payment system?
    User experience is crucial in an e-commerce payment system as it directly impacts customer satisfaction and conversion rates. Look for a digital payment system in e-commerce with a seamless and intuitive interface that simplifies the payment process, reducing cart abandonment rates.

  3. What factors should I consider while selecting an e-commerce payment system?
    When selecting an e-commerce payment system, consider security measures, supported payment methods, user experience, integration capabilities with your existing platform, customer support, and pricing structure.