E-commerce

You're Losing Money on Payment Gateways: Full Guide + 3 Tips to Save Big

Christophe Villa

28 March 2024

10 min read

Hey! Today we're tackling something that really hurts the wallet: payment processors. I'm going to share a story that'll save you a load of money. Stick around till the end, because in the real world, what I'm about to show you can genuinely change the game for your business!

Key takeaway

Discover how to optimise your payment costs and avoid common payment processor pitfalls. A complete guide with practical tips to save serious money.

1 The Story That Stings: An E-commerce Seller in Trouble

Having been through this myself, let me paint you a very real picture. One of my clients decided to start selling in Belgium. On paper, it's brilliant: similar language, similar culture, similar ad costs... The dream, right?

So he launches his Google Ads campaigns and then... disaster!

2 The Numbers That Hurt

CPA France: €6

CPA Belgium: €13

Average basket: €35

You can see the problem — with numbers like these, there's no way to turn a profit!

3 The Analysis That Changes Everything

When I dug deeper, here's what I found:

Out of 100 visitors:

France: 58 added to basket, 21 reached payment, 7 completed purchase
Belgium: 60 added to basket, 22 reached payment, 3 completed purchase

Boom! The problem was right there: the payment page! And you know why? Bancontact, mate! In Belgium, 50% of payments go through Bancontact. Without it, you can wave goodbye to half your potential customers!

4 A Tour of European Payment Preferences

Having tested all these markets, here's what you need to know:

Belgium

Bancontact: 50% of the market
Bank transfers: significant share

Without Bancontact = not profitable

Germany

PayPal: absolutely essential
Klarna: widely used
Buy Now Pay Later: very popular

United Kingdom

Bank cards: dominant
PayPal: well established
BNPL: growing fast

5 3 Tips That Make All the Difference

Negotiate Your Fees

Stripe and Mollie: negotiable once you're doing volume
PayPal: less flexible

Go Through Your Bank

Example: some UK banks offer rates as low as 0.7% per transaction

That's brilliant compared to PayPal's 3%!

Handle 3D Secure Smartly

15% of payments fail because of it
Solution: request an exemption for small amounts
Caution: no chargeback protection if fraud occurs

6 The Trap You Must Avoid

Don't turn your checkout page into a Christmas tree! I've seen sites with:

Bank card

PayPal

Klarna 2x

Klarna 3x

Klarna 4x

Apple Pay

And it goes on...

That's taking the mick! Stick to 3-4 payment methods maximum.

Conclusion

Having tested all these solutions, here's what you need to remember:

Adapt to local preferences

Never rely on a single payment processor

Negotiate whenever you can

Measure everything!

💡 Tip

Pro tip: Start by identifying the preferred payment methods in your target market before you launch. It'll save you from losing £130/day for a month and a half like my client did!