What payment methods should you accept as an online merchant?
Before we start, you might want to check out our previous article on what are the popular online payment methods in Malaysia?
No doubt, Internet users in Malaysia don't have much problem paying online especially with the growth of online banking facilities here. Trust in using credit card has also increased as all cards need to be 3-D Secure enabled, even though Malaysia is ranked #7 as highest e-commerce fraud country, well that's another story anyway.
What we are more curious are the payment methods besides online banking and credit card, for example is PayPal or COD popular here? If you are an online merchant, you might ask this question too:
Do I still need to accept cash bank-in as it is so tedious?
To answer the doubts above, let's walk-through some of the top Malaysia e-commerce websites.
We took a sample of 10 leading e-commerce websites here, with a mixture of product and service oriented businesses, as well as various verticals. C2C-driven marketplaces are being left out on purpose here as the payment method varies according to respective online sellers.
Although these websites do not represent the whole market but most of them have substantial order volume thus a good gauge on the online payment trends here.
Being one of the busiest online merchants in the country, AirAsia only accepts instant payment and infamously charges additional RM4 for direct debit (online banking) and RM8 for debit / credit card payment.
Golden Screen Cinemas
Similar with AirAsia, GSC being a ticketing merchant accepts only instant online payment. On another hand, its hugely popular mobile application facilitates Maybank2u, RHB Now and PayPal.
Lazada supports basically every popular payment methods except cash bank-in.
Zalora is one of the earliest online merchant here to champion COD, even today if you select bank deposit, you will be prompted to choose COD instead.
IPmart perhaps is one of the big online merchants here that pays more attention to cash bank-in payment, with four different bank accounts being setup ready to accept manual payment.
Superbuy accepts cash bank-in too, at the same time process credit card and online banking payment via its own payment service - NetPay.
Local online fashion site ThePopLook accepts every major online payment methods, except COD.
Like Lazada, Zalora, ThePopLook and Groupon, Rakuten also supports Celcom AirCash.
Interestingly, Groupon accepts installment via Public Bank credit card for payment of RM500 or above (not pictured above but you can check here). Is this a full online-facilitated installment? Don't think so.
Similar with Groupon, LivingSocial accepts only instant payment, but what is Web Cash doing up there?
We have compiled the payment methods accepted by the top e-commerce sites above, in the following table:
|Cash on delivery||No||No||Yes||Yes||No||No||No||No||No||No|
SB = Superbuy; PL = ThePopLook; RKT = Rakuten; GP = Groupon; LS = LivingSocial
No surprise here as all 10 sites accept both online banking and credit card.
5 out of 10 sites in this sample accept PayPal, cash bank-in, Celcom AirCash, while only 2 out of 10 (namely the Rocket Internet's sites) accept cash on delivery.
Not many online merchants here are keen on offering PayPal option especially if cross-border transactions are not expected. There are around 1.5 million active PayPal users in Southeast Asia so you can imagine that a few hundred thousands of those are residing in Malaysia. However, the most reluctant reason merchants don't opt for PayPal is because of its relatively high fees made worse by the recent price hike.
As opposed to selling on Facebook or forums where manual payments are triggered by "pm" (private messaging), bigger online retailers are not so in favour of cash bank-in or ATM transfer. This is because the operation involved (verification, reconciliation) are just too heavy and messy if the order volume is high. Otherwise, no harm for smaller merchants to offer this facility rather than losing the potential customers.
There are still not many online merchants here offer cash on delivery (COD) option, as only a handful of the existing local delivery services are facilitating this service in selected areas. Other factors include higher cost and returns handling. Most importantly, can you acquire new customers by offering COD? Could it be the same set of online shoppers (that are able to pay via other means) that opt for COD due to certain reasons?
What say you?