Taking money online will be much easier yet more difficult

Shoppers online usually spend money in one of two ways – credit cards or PayPal. True there are other systems, but they are comparatively insignificant. For businesses, the two payment options present few problems – other than technical issues. For customers, though, it’s a different picture.

In spite of the credit boom, many people either do not have credit cards – or they simply refuse to use them online because of security worries. Similar concerns also prevent people from using PayPal. Indeed there are several web sites citing PayPal “horrors”. So, you could take cheques – but that removes the feeling of immediacy the Internet provides. Alternatively, you could allow your customers to pay directly into your bank account, but that raises your own security worries, rather than those of the customer.

Now, though, PayPal is to get some serious competition. Google has started to rank up its promotion of Google Checkout, including using the logos for this service in the listings it serves up when searches are made. Although this service still depends upon credit card use, the Google brand may be enough to help people overcome security fears.

Also in the wings is a major competitor to PayPal being set up by Amazon called Flexible Payments. This will allow for credit card usage as well as an Amazon account that can be set up by your customers. The Amazon brand may be perceived as higher value than the Ebay/PayPal making this a popular system.

The result of the entry of Google and Amazon into the payments arena is good news for your customers. It gives them choice and more freedom to use a payments system they feel is secure and worthwhile. The problem is for online businesses. In order to fully meet your customer needs you will need to be able to accept payments using all of the main systems. At the moment this largely means credit cards and PayPal. However, in the not too distant future it will also mean you need to take money via Google and Amazon.

Instead of having one payment route to administer, you will have four. I can see a new breed of online services arising – above the level of a shopping cart. These systems will be a single payment service you adopt, but which aggregates all the available online payment systems for your customers. But if some enterprising soul doesn’t develop that kind of online business, then you will need to allocate more time and effort to administering your own online payment systems.

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