What type of payment is best suited for low amount transactions in a e-commerce-like website?

Question

We're building a kind of e-commerce service which sells only one product.

That product will be priced around 1.5€. Our paying users will checkout approximately 3 times a month. Each checkout should be between 1 to 3 products (1.5 to 4.5€).

Due to the low price of our products, we're thinking of two totally different payment methods:

• Pay the right amount for each checkout
• Credit your account once in a while, and spend that credit at each checkout
• ... anything else you can think of ?

We would like to understand what's the impact to choose either one of those methods for our users: feelings, understanding, behaviour, boredom, expected AARRR metrics impact...

We thought about testing both but it might get too costy for us right now and we need to make a first choice, as informed as possible.

Do you have any input/experience to share on this? With papers or articles as source?

Answer 1

I'm very against the second method, having experienced something like that at TMobile (terrible experience "I don't know how much I'll actually be spending each month")

So my advice is to go with single checkout, but with an option for the user to store payment configuration as part as a profile (optionally opted into, I have to stress) so that whenever they visit again they can use something like a one touch purchase using that stored information.

Last note: you can passively create a profile for them on first payment. All the user has to do is provide a password.

edit: for resources, go to baymard institute https://baymard.com/checkout-usability/articles

Answer 2

I am completely for the second option if it saves me (the buyer) money. You have to be a good Steward of this money though. I recommend doing what Amazon does and clearly state that your account balance will never expire (and mean it!)

I think this is most effective if you allow people to pay normally but pass on the cost of transaction if they don't take the second option.

Answer 3

You could delay charges until they reach a certain amount, for example 10€.

This only works if ...

• your customers are likely to return.
• there is no or little incentive to cheat (like using multiple accounts).
• the financial risk for you is low, e.g. because you sell a digital service not a physical product.

I know that some mail order companies send out payment reminders only once, if the amount is below a certain limit. The costs to get the small amounts would be higher than what they would get paid. Afterwards they ignore it until the customer returns.