People spend ridiculous amounts of money on their Christmas shopping every year. In shopping malls, online shops, little boutiques, using their phones, credit cards, cash, cheques, on lay-by. Happy times, and a lot of shopping induced endorphins are released all over the world.

So there is hardly a better time of year to open a shop of your own. Good idea, but there are always a few things to consider. Let’s look at one particular, fairly important issue: Regardless of what you sell, you will have to deal with payment methods. How are your potential customers going to pay what you sell them?

We found an interesting article that looks at the benefits of enabling your happy shoppers to pay using their credit card. And to counter the age-old argument of “those outrageous credit card fees” (completely ignoring what is in the interest of the customer), we agree with the statement “During the Christmas period, because spending is high, the fees will pay for themselves.”
Read the article here.

Sounds like a costly coalition, doesn’t it? Here are some things to keep in mind when paying for the presents for your loved ones that we found on the UK Telegraph website. Play it safe when you do your Christmas shopping (applies to all other shopping occasions as well, obviously).

First up, the safest way to buy is actually the credit card. Why? In the UK, you are protected as a customer through the Consumer Credit Act 1974. That means, if the online shop you are buying from goes bust before your goods are delivered and can’t reimburse you, your credit card provider will be liable for your costs.

When using credit cards for your online shopping, keep a few things in mind.
- The actual page you are asked to put your credit card number in, has to begin with ”https” rather than just ”http” to indicate that you are on a secure page.
- You will always be asked to enter the Secure Code additonally to your credit card number.
- Credit card companies will never ask you to send them your details.
- See if you can check the seller’s rating on shopping websites to get an idea, how trustworthy they are.
More pointers and the whole article can be found here.

Happy Christmas shopping everyone!

Inspired by a cool article we stumbled (link below) across that illuminates not one but four different payment systems for e-commerce. What they all have in common is some sort of hardware tool – ranging from a simple card to a funky digital wallet. (We suspect this was also the wallet of choice for a certain Captain Kirk.)

But seriously, folks.
1) Credit and Smart Cards. Most common (90% in North America)
2) Electronic Bill Presentment Payment (EBPP) for recurring payments.
3) The beforementioned Digital Wallet
4) Mobile payment with your, yes, mobile device. Growing rapidly in Asia and Europe.

Read the whole article here on Pixelcrayons, and enjoy the brilliant stock imagery (we suspect). What’s your favourite payment system?

Here’s our two cents about this news topic:

New York Post

The Huffington Post

CNN Money

LA Times

It’s interesting to observe that these major telecom companies (AT&T, Verizon Wireless, T-Mobile) would choose to address the payment problem on their own, rather than leverage the compentancies of the major credit card companies. Why would they want to walk down this path on their own?” asks Daniel Mattes, internationally recognized IT and payment expert and founder of Jumio.com

Credit cards have been the world’s most convenient payment solution. In 2009, there were 56.4 billion credit, debit and prepaid card transactions, totaling $3.39 trillion dollars. (Nilson Report, February 2010.) Credit card companies are doing a great job at “card present” transactions, by providing fast processing, low fees for merchants and excellent service for the customer. In the online world, however, where there are “card not present” transactions taking place, significant improvement is needed. According to Javelin Strategy & Research (2009), the annual cost of credit card fraud is $191 billion. Compare this to the consumer energy costs of the entire USA per year which is at $200 billion. What’s missing is that credit card companies have not been able to convince the PC and smartphone industry to equip their devices with a credit card reader.

The world of online payments places a heavy burden on the merchants. “Not only do online merchants have to deal with the cost of the fraud itself, but they also bear the cost of maintaining a security and fraud protection team, and face the opportunity cost of lost purchases and customers due to false postives, as well as paying higher transaction fees overall as compared to brick and mortar retailers,” says Daniel Mattes.

It seems that the big credit card players have rested too long on their laurels. Now is the time for innovation and for merchant and customer friendly service.