[Online Store Payment Tutorial] Getting Paid: How to Handle Payment Methods When Opening an Online Store

[Online Store Payment Tutorial] Getting Paid: How to Handle Payment Methods When Opening an Online Store

Datareportal published a survey on Hong Kong's electronic market and behavior in February. The data shows that after nearly a year of the pandemic, the market's electronic payment methods have undergone tremendous changes. Because the online store payment process has been significantly shortened and simplified, it has improved consumers' purchasing desire and payment frequency. With the government launching consumption vouchers, many online stores have applied to receive consumption voucher payment platforms. This has indirectly caused many Hong Kong people who have never experienced electronic payment to taste the convenience of electronic payment.

However, electronic payment also has network security risks. Customers prefer using secure, large collection platforms. In other words, the online store payment methods must be simple, convenient, and secure to give customers confidence in buying your products online.

In addition to bank transfers, the commonly used electronic payment tools in Hong Kong include credit cards, electronic wallets, and fast payment systems. What are the pros and cons of these electronic payment platforms? Let us introduce them one by one.

1. Bank Transfer

Bank transfer is the most traditional electronic payment method. General store owners will release bank account number information on the website, let customers message the store owner to place an order, and provide payment proof after transferring. This was one of the most commonly used payment methods for online stores before 2015. The advantage is that no handling fees are required. Both store and customers can transact through online banking or ATM. However, since the transfer cannot be processed instantly, customers have more time to consider whether to purchase, affecting purchase willingness. Once customers abandon their orders, the store owner will also end up stockpiling products, which is not worth it.

2. Third-Party Credit Card Online Store Payment Gateway

a. PayPal:

PayPal is one of the most popular online store payment platforms, mainly supporting major credit card payments. Its high recognition means consumers have higher trust in it. To open a PayPal account, you need to apply for a business account via email, but no business registration number is required. Its transaction fee is 3.9% + $2.35 HKD per transaction. When merchants transfer PayPal funds to their bank accounts, amounts under $1,000 will incur a $3.5 fee, taking 3-5 business days. It offers three card readers that can support offline payments.

3. Electronic Wallet

Unlike bank transfers or credit card payments, the feature of an electronic wallet is that it can be pre-loaded and store funds. The benefit is that it's very convenient. As long as consumers have a mobile phone, after loading value, they can use it online or at physical stores with contactless payment devices, achieving 24-hour instant transfers. The application method is very simple - mostly just registering with a mobile phone number, then providing personal information and setting a transaction password according to instructions to successfully open an account. The top-up and withdrawal limits are mostly $5,000 per day, suitable for handling transactions with smaller amounts. There are several commonly used electronic wallets in Hong Kong, such as PayMe (for Business) and Alipay HK, each with different features.

PayMe:

PayMe is an electronic wallet developed by HSBC, which can be loaded through 13 local banks. Its transactions do not charge any handling fees, and the application process is convenient. Its PayMe For Business version has no collection limit, but can only be used by HSBC Business Internet Banking customers, and the account needs to maintain HKD 50,000 at all times. Each transaction will incur a 1.2% or 1.5% handling fee.

AliPay HK:

AliPay is Alipay, with a Hong Kong-specific version called Alipay HK. It also does not charge any handling fees and can achieve instant transfers. What's more, it can handle cross-border remittances. However, AliPay's application process is more complicated, requiring a business registration certificate and company registration certificate, taking two weeks for approval.

4. Fast Payment System - FPS (Faster Payment System)

FPS is a fast payment system launched by the Hong Kong Monetary Authority. It also provides instant account credit. Its benefit is that you only need a phone number, email, system identification code, or QR Code to quickly transfer money. FPS transactions do not charge any handling fees, which can save a lot of costs. Store owners only need to apply with a bank that has a business account to activate the service. And it can cross-bank transfers - with just one account, you can receive transfers from banks and electronic wallets, making it convenient for store owners to manage. Compared to electronic wallets, FPS allows you to set your own transfer limit, which can handle transactions with higher amounts.

Online stores should choose the most suitable payment package based on factors such as store size and transaction volume. For example, small businesses that just opened an online store should choose methods with lower handling fees to reduce operating costs. Of course, from a business perspective, the best practice is to cover various payment methods to serve more customers with different spending habits. You can also consult entrepreneurship platforms to find a payment method that suits you.

Just like us ThinkShops, our services cover everything, helping you easily open an online store. From order and operations management to various payment and logistics services, we provide different options for you to choose from. ThinkShops' online store supports multiple online payment methods, including Stripe, PayPal, and other websites, as well as AliPay HK, WeChat Pay, Line Pay, and TAP & GO collection methods, which can help you attract more transactions and potential consumers.