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How to Choose the Best Online Payment Solutions for Your Business?

07 September 2016 by National Bank
online payment solutions

Whether you're a self-employed individual or you're managing a chain of 12 stores, here's THE most important question needing your attention: how will your customers pay for your products or services?

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While online sales and mobile purchases are becoming more and more ingrained in the habits of consumers, the sound of the cash register's bell will be heard less and less. In fact, paying in cash is now just one method among so many others. According to a recent study by the Forrester firm, online purchases in the retail industry in 2019 will represent no less than 9.5% of all purchases made in Canada. And in 2015, nearly a third of Canadians had made a purchase from their smartphone, according to RetailMeNot.

Here's a guide to different payment systems, according to the type of business that you're in.

For online stores

We know, selling your products is now done more and more on the Internet. Also, having a solid online business platform is becoming more and more critical.

In this niche, Shopify and Magento are the two solutions dominating the market. Shopify is an online, paid solution, stored on the "cloud". It's therefore possible to have a web presence without investing in IT infrastructure.

On the other hand, Magento is an open source code solution, and therefore free. But you'll have to install and configure the platform on your own servers, and this requires IT skills. Specialized companies exist to assist you in this task, but it won't be free.

With that said, once installed, the two platforms include all the functionality required to manage an online store, from inventory management to secured payment for products.

Pros: Shopify supports several payment gateways, which allows you to sell your products practically anywhere in the world.

Cons: Monthly fees are required (from $29 to $299) in addition to a transaction fee (nearly 3% of the sale amount, plus credit card fees).

Pros: It's free, which is interesting over the long-term for avoiding transaction fees.

Cons: The fees that will eventually be paid to install the servers and to update the system may exceed the fees for a turnkey solution like Shopify.

For businesses with a storefront

There are online stores, but also all those "physical" retailers looking to add an electronic dimension to their activities. The Lightspeed point of sale system was created for these types of businesses. It's an online sales solution that allows, among other things, to combine the inventory of several stores.

The Lightspeed solution takes care of everything from the sales process, ordering the product from suppliers, to accounting records.

Thus, for managing two branches of a store, in addition to an online store, you now have one single inventory. This way, for example, a ski equipment store could sell the last set of a certain model of gloves in-store, and this model will be automatically withdrawn from the online store.

Although Lightspeed occupies a dominating position in this market, it is important to note that there are others, of which several have been created more specifically for restaurants, for example. Also, before making a decision as important as a point of sale system, you should compare different solutions!

Pros: A proven solution with functionalities specific to many types of businesses (pet stores, bike shops, sports equipment stores, jewelry stores, etc.).

Cons: Relatively high monthly fees (between $99 and $289, plus $59 for the "online business" option).

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