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Ecommerce Payment Processing Challenges

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedApr 20232 min read

There’s never been a better time to be an ecommerce business in Australia. According to the International Trade Association, Australia is the world’s eleventh largest ecommerce market with online commerce representing nine percent of all retail trade. Its growth is predicted to grow 15.5% each year through 2024, in comparison to just 3.4% for brick-and-mortar retail. But along with this growth comes challenges, especially when it comes to ecommerce payment processing. In this guide, we’ll cover the main ecommerce payment processing challenges you’re likely to encounter – and how to overcome them.

1. Choosing the best payment gateway

One of the first challenges of ecommerce online payment processing is how to get set up. You’ll need a payment gateway provider to facilitate transactions by securely transferring payment details from your website to your bank. Sift through your options carefully to find a gateway with reasonable fees that’s also easy to integrate into your storefront.

It’s best to look for a gateway with a localised presence to be sure it meets all Australian compliance standards, both for tax purposes and from a security standpoint.

2. Card-not-present fraud

Speaking of security, fraud is the next major challenge for any ecommerce business. According to the Australian Payments Network, card-not-present fraud accounted for 87% of all card fraud in 2020. Unfortunately, it’s not the only type of cyber fraud out there, from data breaches to skimming practices. If you take card payments, you’ll need to take all necessary steps to address this type of online fraud. One initial step is to choose a payment gateway that’s PCI compliant, ensuring your customer data is handled according to all the latest regulations. Use tools like encryption, tokenisation, and multi-factor authentication to offer your customers a secure checkout experience.

3. Processing international payments

The beauty of ecommerce is that it allows your business to open its doors to global trade. You can attract customers from all over the world, but along with this comes unique ecommerce payment processing challenges. How will you take payments in foreign currencies? Every country has its own set of regulations and different banking systems, not to mention the tax issues.

To overcome the red tape and other challenges, you’ll need a payments system set up to handle international payments. Many of today’s payment gateways have an international presence, with infrastructure in place to automatically collect payments in a variety of currencies. These are automatically converted and transferred into your business bank account in the local currency. Just be sure to check the fine print and fees carefully, as the cost of cross-border transactions can quickly add up.

4. Integrating multiple systems

To run an ecommerce business, you’ll need to join multiple systems and have them work together. Your ecommerce platform should merge with your payment processing and accounting systems, or reconciliation can be a nightmare. Transactions need to be properly recorded in your financial accounts, with all incoming funds accounted for. To address this challenge, it’s best to choose a payment gateway provider that works with a variety of third-party integrations. For example, GoCardless integrates with over 300 partners including accounting software like Xero to give you a joined-up workflow from sale to tax return.

5. Offering a mobile payment experience

Consumers like to shop on the go. It’s not uncommon for a site to work beautifully on a computer but be clunky on a mobile device. If your site isn’t designed with mobile commerce in mind, you’ll lose sales as customers abandon their shopping carts in frustration. Make sure it’s easy for customers to shop using any device with a good responsive design. Products should be easy to find with a search bar, and the checkout page should be as simplified as possible. Ideally, customers can use a digital wallet to complete the purchase with a single tap or swipe.

By recognising these common ecommerce payment processing challenges, you’ll be better placed to overcome them. Whether you’re setting up your first website or looking for ways to improve conversion rates, follow these tips to optimise the online experience.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.