Enabling e-commerce with digital payments
Smaller Canadian companies may be missing out
By Paul Parisi
E-commerce plays a key role in today’s highly digital and highly global marketplace. The opportunity to grow one’s business through digital solutions, tapping consumers and business decision-makers who are buying products and services online, is vast.
Today 80% of Canadians shop online1. According to PayPal Canada’s 2017 SMB Landscape Study, businesses that do sell their goods or services through e-commerce make on average $175,000 or more in annual revenue than their offline counterparts. Yet the same study found that only 17% per cent of Canadian businesses sell their products on services online2.
Consequently, Canadian small midsized businesses (SMBs) continue to lose out on revenue to competitors. That’s particularly disheartening considering that retail e-commerce sales in Canada will reach approximately CDN $57 billion in 20183, with spending going to businesses in the United States or overseas.
Other countries have recognized the potential of e-commerce driving SMB sales that ultimately boosts their economy. According to a FedEx study, Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific, in the Philippines eight in ten businesses use e-commerce platforms, which accounts for 52% of their revenues and includes $1.4 billion bought by foreign buyers. Meanwhile 20% of China’s retail sales happen online4. In comparison, only 3% of Canada’s retail sales happen online5.
Moving to e-commerce
But it’s not too late. Now is the time for Canadian SMBs to embrace e-commerce. E-commerce involves accepting online digital payments and using payment solutions providers to process them, but also includes the full customer experience and fulfillment of the product or service. Digital payments acceptance can make a material difference for organizations as it helps them reach customers domestically and globally who prefer the convenience of transacting online or through mobile devices.
The prospect of moving to an online digital payments system for many SMBs can seem daunting, though it needn’t be. Choosing a payment processor is a big decision, so it’s important to research carefully and look for a solution and provider that can meet volume demands, technical needs and budget.
Avoiding common pitfalls
To maximize the return on investment, there are several common mistakes businesses must avoid when choosing payment solution providers.
1. Don’t assuming “lowest rate” means “lowest overall cost”. While considering various payment options remember that “the lowest rate” does not necessarily translate to the lowest overall cost. Read the fine print, as certain payment options come with hidden fees, including everything from cancellation and withdrawal costs to batch-processing and payment card industry compliance fees. Businesses must do their due diligence when evaluating providers. Ask about contract terms and termination fees as well as monthly costs, processing limits and minimums and any other expenses.
2. Not giving customers a full range of payment options. Today’s customers expect more options than ever, and not just in products and services. They expect to be able to pay online with a range of options, and if your payment processor imposes limits on what you can accept, you might see an increase in abandoned shopping carts on your site. Another PayPal study showed that 25% of online customers abandoned their transactions because a site didn’t offer their preferred payment option6.
3. Ignoring security and fraud protection. Data breaches have hit retailers large and small, and customers now demand the best protection possible to lower their risks of card fraud. As you evaluate vendors, look for a payment gateway that’s backed by a secure and reliable payment processor and for a vendor that offer services to help you proactively prevent fraud. They both can help protect your customers and your business.
4. Going DIY (do it yourself) with setup and support. Setting up multiple payment options can take a lot of time and effort if you’re not well versed in payment gateways and online checkout details. Finding a payment card processor that can deliver easy setup along with your account and backing that up with technical support is crucial. Every moment of downtime potentially lowers sales. You need a processor that understands those challenges and can deliver round-the-clock support for payment-related problems.
Although searching for the right payments processor can seem like a big task, thorough research and knowledge of best practices can help you find the solution that fits your business and help you grow it through enabling productive and profitable e-commerce.
Paul Parisi is president of PayPal Canada.
1 Canada Post, “Get to know Canada’s booming e-commerce market”, December 12, 2016, web site.
2 PayPal, “Less than one in five Canadian SMBs accepts online payments”, May 9, 2017, web site.
3 eMarketer, “Ecommerce in Canada 2018: eMarketer’s Latest Forecast, with a Focus on Grocery”, report, January 25, 2018.
4 Benedict Brook, “Chinese giant’s warning to Australian retailers”, NewsMail, August 21, 2018.
5 Canadian Press, “E-commerce accounts for less than 3% of retail sales in Canada: StatCan”, Global News, December 21, 2017.
6 PayPal, “People are 54% More Willing to Buy When a Business Accepts PayPal” October 16, 2018, web site.
Related Posts
