For most businesses venturing into ecommerce, e-payment means accepting credit cards. This involves setting up a complex system including a SECURE order page/shopping cart software, a merchant account (basically a bank account that receives credit card proceeds), and a credit card processing service. Care has to be taken to ensure that shopping cart is compatible with authorization service. All various elements need to be compatible and interface with each other.

While bulk of Internet ecommerce is still transacted using credit cards, there has been steady inroads being made by alternative methods of settling e-transactions. These Web Payment Services (WPS) have ingeniously utilized most popular application on internet "e-mail", to appeal to customers.

By using an existing platform to launch their services, WPS providers have enjoyed wide appeal with customers worldwide. The largest of these, PAYPAL, has approximately 11 million users, processes 150,000 payments per day, and attracts over 20,000 new users each day.

But are there any advantages of using these alternative payment systems over credit card merchant systems? To help you decide following criteria will be evaluated:

(a) SetUp (b) Maintenance Costs (c) Ease of Use/Convenience (d) Cash Flow Effect (e) Customer Perception

SETUP As mentioned above setup of a credit card merchant system is complex. The setup of a merchant account may take up to two weeks or more for final approval to be granted from financial institition involved and verification of integration of various components completed.

WPS services on other side of scale, are incredibly easy to setup, almost laughably so. For example, Paypal, which is largest WPS just requires a merchant to go to Paypal site to register their account. This whole process may take 5 -10 minutes. There is no transaction processing software to install, and importantly, no shopping cart to rent or buy. Paypal simply generates a HTML code which you can place in your site next to your inventory items.

A click on these buttons takes customer straight to Paypal's secure server. When customers want to make a payment they send a message to Paypal, and then Paypal, middleman, does rest.

This is a topic I delve into in my new book "Profitable e-Marketing: Success Strategies That Pay Off."

Look at how customers use stores. It is a social experience for many. Teens go to mall to be seen. A work-at-home parent may go to store just to get out of house. People like to touch items and talk to clerk. I even see some entire families going to store so they can argue with each other over what to buy. A store is more than just a place to get supplies -- it's a social, entertainment venue that only works way it does because it is a real place with real people.

How does that change when store moves online to cyberspace? People use a web site very differently, much more like way they use a catalog than way they use a store.

Customers are almost always shopping alone, and anonymously. Suddenly other factors become important. For example, people want a deep selection. Unlike Kmart and Walmart, which tend to have just a few choices in a great many product categories, web sites can offer a big and varied number of choices in a single product area. Walmart might give me a choice of three different toasters. A kitchen appliance site could easily extend that selection to 20 toasters. Or maybe your site features only three toasters, but those three are unusual and not available in stores.