“CASH ONLY” policy – Why restricting your online store’s payment options creates barriers

Spending around town, I am often incensed by the fact that many shops are cash only. And it’s usually cash only when I only don’t have any cash on me.
The decision for me about whether to purchase in this case is easy – I usually won’t. To locate an ATM (and these shops are usually the farthest from my bank’s ATM) is not worth it when the competition next door lets me buy lunch or a coffee with my card.

So it was a bit surprising that until recently, with our own online stores, we only accepted credit card payment or bank transfer. We had used Paypal here and there in the past, but hadn’t in some time since. Over the past 6-12 months we reinstated Paypal on some of our own online stores, and were surprised to find that take-up of this payment method was quite substantial. Substantial enough that we will be keeping it.

Providing your clients with limited forms of payment options online will create a barrier that will make it a little bit less likely that some people will choose to purchase elsewhere.

I now use Paypal myself for many online purchases, business or personal, and find it a very convenient alternative to re-typing my credit card number  all over the internet. But I believe it’s for a niche market – people who already have a Paypal account.

If you are offering only a solution such as Paypal you may find this doesn’t suit everyone. You should offer at least 2-3 payment options, one of which should be direct bank transfer. Just because your online store is online, there is no reason why you can’t accept bank transfer for your orders. By having the right process in place to deal with those orders which are a bit more “manual” in nature, you can ensure those orders are processed as promptly as pre approved credit card payments.

If you are able to offer a reasonable selection of payment options for your online store, it is reasonable to expect more people will choose to purchase from you.


“But what about the fees?”, I hear you say. Yes, these options do incur a fee – some more than others. This is one of the costs of doing business, and you will quickly be persuaded on the benefits when it brings you extra business. Be sure to factor in the payment processing fees when creating your pricing, too. Otherwise it will eat into your margins. Keep your pricing competitive but you should be selling to make a profit. My personal preference is to incorporate the fees into your pricing model – there is nothing worse than reaching checkout and being told there is an extra 2% charge for VISA, Mastercard or Amex.

Top Tips – Recap

So our top tips for payment methods for your online store are as follows:

1) Offer 2-3 payment options for your clients.

2) Include a “manual” or “offline” payment method, for those not set up for credit card or Paypal payment, or prospective customers who do not want to enter their credit cards onto your website.

3) Offer Paypal as a payment option – just because you don’t use it yourself doesn’t mean your customers won’t.

4) Forget the fees – this is part of business. Try to factor them into your pricing rather than charging separately for them.

“CASH ONLY” cafes: Please take note!