Taking payment online need hold no fear for businesses
Published 03/11/2008 | 10:50
QUESTION: Can you advise on the options available for accepting online payments via my business website?
Nicolas Martin, eBusiness advisor at Invest NI, replies:
There are three main online payment options: setting up an Internet merchant account; using a payment processing company; or joining an online mall.
Which you choose will depend on how you are already trading and the volume and type of transactions you expect to process online.
If your business already accepts debit and credit card payments for face-to-face transactions and you expect a fairly high number of online transactions, an Internet merchant account is probably the best option.
It offers the greatest amount of flexibility and the quickest payment method, so is best if cash flow is very important to your business.
On the other hand if you don’t expect a high number of online transactions and you don’t currently accept debit or credit card transactions so have no merchant account, you should consider the facilities that a payment-processing company offers.
These companies obtain payment from your customers' credit and debit cards on your behalf and forward the money to you.
The benefits include reduced administration for you, but the disadvantages are that you receive the money later and the charges tend to be higher than for a merchant account.
An online mall brings together a number of online shops on the same website, often from the same sector.
It will host your online shop and process payments for you so again it reduces your administration.
It’s also a very quick and easy way to set up an online presence so is ideal for people with limited IT skills. However, it is the most expensive method and can limit the format of your website.
QUESTION: I am considering where to allocate my advertising budget for 2009. Should I concentrate on online advertising?
Ruairi McNally, media director with Bluecube Interactive, specialists in digital marketing strategy, replies:
With the advent of a harsher economic climate we have seen advertising budgets being squeezed as businesses cut their costs to ease their bottom line.
This all usually means a reduction in spend in marketing and traditional advertising channels with more focus on channels which deliver direct response (i.e. more sales per spend).
This is where online advertising prospers while others fail, as most forms of online advertising can be tracked and measured on a day-to-day basis, unlike some other traditional forms (television, radio and Press).
In 2008, the technology behind it is better understood.
Broadband penetration means people spend more time online than ever before, consumer media behaviour has changed and online advertising is seen more as a value-based medium.
According to recent European figures released this year by the European Interactive Advertising Association (EIAA), 81% of advertisers surveyed predict an increased spend in online advertising and predicted growth will be around 16% each year to 2010.
This is a slight decrease on previous years but it is still significant growth. Of the traditional channels, they predict a 40% reduction in advertising budgets for Press, 39% for TV, 32% for outdoor and 20% for radio.
Consumer habits have changed significantly in the last three years.
Europeans are spending less time watching television and radio while spending more time online particularly with the advent of You Tube, BBC iPlayer and ITV streaming soaps on their website.
QUESTION: I own a sports shop, and although we do have a website it doesn’t get a lot of business. Would using tools such as “blogs” and “user contributed content” generate more traffic to the site?
Niall McKeown, managing director of ION Online Marketing, replies:
Before I answer that question, I want to know what is the unique reason for me to purchase from your website over any of the thousands of other sports websites that exist.
If the reason is not the unique nature of the products and services you offer, then no amount of web tools are going to work for you.
It is important to bear in mind that you will never outdo Amazon. Product information, cost comparisons, customer comments helping my selection, fast delivery and ease of use are all expected and all well tended to by thousands of UK and Irish sports stores.
If you are not in a very specialist field with something that makes your business unique then go no further.
Your shop on the high street offers locals convenience and trust. These competitive advantages disappear online when you are competing with recognised brands such as Nike or O’Neills.
If, however, you are selling your own brand specialist high quality top-line shin guards, gum shields with my team motif printed on it then you have a reason to trade online and have a to take blogs user contributed comment very seriously. Getting a reputation on the internet among the specialist community you serve is the only way to make a profitable online retail business.