Understanding Payment Processing For Ecommerce

If you are a Consumer Brands founder in India, you would have noticed one major change in the Shopify ecosystem last week: COD (Cash On Delivery) orders account for ~65% of e-commerce transactions. For some brands, COD can be even ~90% of orders…. 💀If you run an e-commerce business, the MOST dreadful word you can hear is “RTO” (Return to Origin). With a COD order, RTO is a double whammy —> you haven’t collected any money from the customer but you end up paying x2 in logistics fees i.e. a DEAD LOSS…. Per GoKwik (an e-commerce enabler), some consumer brands in India can have ~60% of COD orders resulting in RTO.. 🔄Shopify launched its own ACOD (Advanced Cash On Delivery) app on the Shopify App store in November 2017 to help e-commerce companies & brands handle COD & RTO by: (1) Providing Pin Code level analytics on when / where to NOT offer COD (2) Configure shipping rates to account for higher COD zones (3) Customize the check-out experience for the COD payment option on Shopify storefronts Per industry sources, ~33% of Shopify storefronts in India used the ACOD app.. 😦And, here’s what happened → on 15th July 2024, Shopify abruptly gave a notice that they would be rolling back the ACOD app in India in a few weeks.. Shopify went with the roll back on 31st August and the support documents highlighted 2 COD apps: (1) Kwik COD by GoKwik (*) - which is self serve & free to use (2) Razorpay COD & Checkout by Razorpay (*) - which requires onboarding ➡️If you own a Consumer Brand in India or use Shopify as your e-commerce storefront, please do check out these two alternatives. GoKwik works with over 2,500 brands on e-commerce enablement & Razorpay doesn’t need an introduction! PS: If you tell them I sent you their way, you might get onboarded faster 😆 #india #startups

Amazon Sellers, have you noticed discrepancies between your sales reports and the Amazon Payment Report from last month? You're not alone. Some of Envision Horizons' clients have seen variances as high as 30%. In October, Amazon updated its "deferred transaction" policy, now tying funds to a "payment based on delivery date" system. Under this policy, funds are held until an order is delivered, plus a standard reserve period of seven days after delivery. From a cash flow management perspective, this can have a huge impact! What's more unusual—this change doesn’t impact all sellers. While it's primarily affecting new Seller Central accounts or those with higher return rates, we've also seen long-established businesses with low return rates impacted. If you're noticing this issue, comment below.

The The New York Times published an opinion piece by Tim Wu, stating that "Last year, Amazon charged private sellers, on average, between 50 and 60 percent of their sales in fees…" This claim is based on his upcoming book, "The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity." This would be a staggering amount, especially considering there are an estimated 2 million active sellers on Amazon as of 2025. The question is, is this statement of fees a strike, ball, or a wild pitch? Platform fees are a highly debated topic, with ongoing discussions about fairness, market power associated with setting these fees and how much sellers get in return. This is particularly true given the growing influence of platforms in both the linear and circular economies, as more and more transactions are facilitated by platforms. While it's true that Amazon charges fees up to 50% for some products, this applies to a very small and specialized category of Amazon Device Accessories. These products are exclusively compatible with Amazon devices, such as Echo, Fire tablets, Fire TV, and Kindle. The premium take rate may also account for increased support, compliance, and control Amazon maintains over these products to ensure compatibility and quality standards. The vast majority of sellers are charged 8% to 15% depending on the product. The referral fee compensates Amazon for hosting the product on its marketplace, providing access to millions of customers, and facilitating the sales relationship between buyer and seller. A full list of fees by product category can be found here: https://lnkd.in/gX3msiZf Additionally, sellers may opt for extra services, such as Fulfillment by Amazon (FBA). FBA is a service where sellers send their products to Amazon's warehouses, and Amazon handles storage, picking, packing, shipping, and customer service. Prices range from around $2.29 to $10.65 per unit for items priced under $10 and higher for more expensive or bulky items. Amazon also offers advertising services, with paid marketing options that sellers and brands use to promote their products on Amazon's platform and beyond. These fees vary widely depending on the seller's promotional choices. Critics argue that Amazon biases search results toward paid ads and its own products rather than prioritizing organic or merit-based listings, increasing reliance on advertising spend. At the same time, Amazon's aggressive pricing of advertising fees undercuts competitors and gives its sellers a cost advantage. So, the bottom line: There is a complex dynamic where Amazon holds pricing power but also offers significant cost savings and a full stack of services (payment processing, logistics, and advertising) to sellers. It's a stretch to claim that, on average, sellers must between 50 and 60 percent of their sales in fees.

Amazon Clarifies How Deferred Transactions Work Amazon has posted a detailed breakdown on deferred transactions — payments that are temporarily held before being released to sellers. These delays typically occur for two reasons: 1. Delivery date policy – For most orders, Amazon holds sales proceeds for 7–14 days after delivery to ensure funds are available for returns, claims, or chargebacks. 2. Invoiced orders – For Amazon Business customers paying by invoice, funds are held until payment is received, usually 30–45 days after the order date. You can track these orders by selecting Deferred transactions in your Payments dashboard's Transaction View or by pulling the Deferred Transaction report from the Reports Repository. Once released, they move into your regular payment schedule. For sellers, this update means you can now see exactly which orders are on hold and why, making cash flow forecasting more transparent. This is especially important for high-volume sellers or those managing tight inventory and payment cycles. ⬇️ Tap the link to read more about this update! https://lnkd.in/dcjq-Pq4

Amazon Reports: The Art of Keeping Sellers in the Dark 🎨 You're not alone if you see some funky discrepancies between your Business Reports and Payments Reports. Blame it on Amazon's shiny new Delivery Date Policy & Deferred Transactions policy update from November 1st. What this policy is about: Amazon holds onto your funds under a “Delivery Date + 7” reserve policy. So, if you sell an item on January 1 and deliver it on January 6, your funds won’t be available for disbursement until January 14 (seven days after the DD). Amazon does this to ensure there are enough funds for potential refunds, claims, or chargebacks. This change makes P&L tracking an absolute nightmare. Instead of clear, accurate reporting, we’re left piecing together sales data with delivery date + 7 and fees like a treasure hunt. (Spoiler: The treasure is delayed payouts.) Now, I understand this change is meant to protect customers and Amazon from chargebacks and other similar issues. Amazon wants more money in the bank, but introducing discrepancies that leave sellers scratching their heads raises a bigger question: Why not ensure clarity and consistency before rolling out changes? After all, accurate reporting is the foundation for sellers to thrive on the platform. 🚨 Pro Tip: Check out the "Deferred Transactions" section in your Payment Reports to see what’s being withheld. Just don’t expect the report to align because… math is hard, apparently. Amazon, we love you (most of the time), but maybe it’s time to consider a "transparency update"

Most merchants overcomplicate Payments Optimization. Especially when they are scaling to new geographical regions for the first time. Having helped thousands of merchants optimize their payments as well as developing global payment strategies for Enterprise merchants like Nike, ASOS.com, and Inditex. I have learned that is actually fairly simple. It simply boils down to following and improving these 6 steps... 1. Global - Select the Payment Methods that are used globally, such as Mastercard, Visa, American Express, and sometimes even UnionPay International and JCB International (Europe) Ltd. 2. Local - If applicable, select the Payment Methods in key local markets that are crucial for any merchants, such as iDeal in the Netherlands, Cartes Bancaires CB in France, or Cartão Elo in Brazil. 3. Conversion or ATV lifting - If available, test out payment methods that help improve conversion or increase the Average Transaction Value, like Klarna, PayPal, or Alipay. Once you have these in place, you can then focus on: 4. Authorization Rates - Benchmark first, and if you are performing too low for your vertical, focus on improving it first. 5. Fraud Prevention - If you have to deal with higher chargeback levels, fix it using available preventive tools like 3DS or alerts by Verifi Inc. and Ethoca or third-party vendors like Kount, an Equifax Company, Forter, or Ravelin Technology. 6. Pricing - only when you have optimized for points 4 and 5, and your business is growing consistently should you focus on improving pricing; until then, it's a distraction. The key to success? Regardless of which geographical area you grow to as a merchant, figure out which steps you are stuck at. And then make a plan to improve it before you move on to the next step. P.S. Check out my newsletter https://buff.ly/3RXzt7Z

Amazon FBA Sellers: That "8 cents per unit" increase? Let's talk about what it really means. Amazon just announced their 2026 FBA fee changes, and while the official line is "modest adjustments," the reality for many sellers is far more dramatic. Here's what's actually happening: The New Pricing Reality: • Products under $10: +3.6% fees • $10-$50 range: +6-8% fees • Over $50: +14-15% fees (ouch) If you're selling premium, lightweight items, think supplements, skincare, or tech accessories, you're looking at margin compression that could fundamentally change your unit economics. The Hidden Costs: Placement fees are jumping 6% to 179% depending on size. Amazon's message is clear: distribute your inventory or pay the penalty. The old SIOP discount? Gone. You're now responsible for packaging durability without any fee relief. What Smart Sellers Are Doing Now: - Repricing strategically around the $10 threshold (sometimes $9.99 beats $10.99) - Working with 3PLs to manage multi-warehouse distribution - Upgrading packaging to handle the new SIOP standard - Running profitability models on every SKU before the January 14 deadline The Bigger Picture: This isn't just about fees, it's Amazon's play to keep consumer prices competitive while tariffs and inflation squeeze from all sides. Unfortunately, sellers are being asked to absorb much of that pressure. The question isn't whether prices will rise on Amazon in 2026. It's whether your margins can survive the squeeze. How are you preparing for these changes? I'd love to hear what strategies are working for other sellers. #AmazonFBA #Ecommerce #AmazonSeller #FBA #RetailStrategy #SupplyChain #SmallBusiness

The Hidden Impact of Payment Methods on Your Sales: Are You Losing Customers at Checkout? 💸🛍️ Did you know just 1 in 4 shoppers abandon carts specifically because your payment options don't match their preferences? 😬 I discovered this firsthand after analyzing checkout data from 30+ e-commerce stores last quarter. One fashion retailer was puzzled by their high mobile abandonment rate despite solid traffic and product page engagement 📉📱 The diagnosis was clear: their checkout offered credit cards only, with a clunky form that required manual entry on mobile. We introduced Apple Pay, Google Pay, and Shop Pay — all offering one-tap checkout — and their mobile conversion immediately jumped 📈 24%. Here's what I've consistently found works: 👇 ✅ Digital wallets are no longer optional. When we added Apple Pay and Google Pay to a home goods client's checkout, 38% of their mobile transactions shifted to these methods within weeks. These customers weren't necessarily new — they were existing visitors who previously abandoned due to payment friction 😓💳 ✅ Buy Now Pay Later options unlock higher AOV. A beauty brand I consulted with introduced Afterpay and saw their average order value increase by 17% while abandonment decreased. BNPL isn't just for big-ticket items anymore. 💅🛒 ✅ Payment method visibility is critical. An electronics store was hiding alternative payment options behind a "more payment methods" dropdown. Simply making all options visible on the initial checkout screen increased completion rate by 11% 🧲 ✅ Regional preferences matter enormously. For a client targeting European markets, adding local payment methods like iDEAL (Netherlands) and SOFORT (Germany) increased conversions in those regions by 35% 🌍💶 Here's the key insight most brands miss: Payment preferences aren't just about convenience — they're about trust and identity 🤝✨ When shoppers see their preferred payment method, it creates an immediate sense of familiarity in an otherwise unfamiliar checkout process 🧠💡 The implementation isn't complex 🔧 Most major e-commerce platforms now offer these payment options through simple integrations or native functionality 🧩 📊 The data shows conclusively: diversifying payment methods is one of the highest-ROI checkout optimizations you can make, often delivering double-digit conversion increases within days, not weeks or months 🚀💰 💬 What's been your experience with alternative payment methods? And have you tested their impact on your mobile conversion rate specifically? 📱🧠

Local payments now live for Shopify POS in Sweden 🇸🇪 Shopify POS still isn’t fully launched in Sweden. Merchants continue to rely on third-party terminals for in-store payments. But there’s been a key update. Shopify POS now supports local payment methods through Shopify Payments, including Klarna, Swish (for Plus stores) and USDC. For Swedish retailers, this closes a major gap between online and in-store payments. Klarna for instalments. Swish for instant local transfers. USDC for digital currency acceptance. A small but meaningful step towards a full POS rollout in Sweden. If you’re running Shopify POS, make sure Shopify Payments is active. It’s the key to enabling these local methods. Across the Nordics, the same pattern is emerging. In Finland and Denmark, MobilePay is now supported for POS through Shopify Payments, available in EUR and DKK. A clear signal that Shopify is expanding its local payment coverage region-wide.

After analyzing data across numerous QPe-powered stores, we've identified that tweaking your payment options can significantly increase sales and boost conversions! Here are a few strategies that have worked wonders for our merchants: 1. Install Multiple Payment Gateways: Ensure a variety of payment methods are available, from UPI to cards to wallets. Customers are more likely to complete their purchases if their preferred option is available. Integrate atleast two payment gateways in your e-commerce store. 2. Promote Prepaid Over COD: Offering special discounts or incentives for prepaid orders encourages customers to choose this option. Prepaid orders not only improve cash flow but also reduce RTO rates by up to 40%. If you can afford, stop offering COD option in your e-commerce store or you may use plugins like "Partial Payment" especially developed for merchants like you. 3. Enable One-Click Payments for Returning Customers Stores using our saved-payment feature for returning customers are experiencing quicker checkouts, which drives repeat purchases. Customers appreciate the convenience and it has improved their customer retention metrics. 4. Localized Payment Options For brands with global reach, integrating region-specific payment options like Klarna or Paystack has been a game-changer. This flexibility makes international customers feel more at ease, translating into higher global sales. By optimizing these strategies, eCommerce brands can not only enhance customer experience but also increase AOV and reduce cart abandonment. These are just a few of the actionable insights we’ve built into QPe’s features to help our merchants grow! Let's help you build smarter, faster, and more efficient shopping experiences! #eCommerce #QPe #PaymentOptimization #AOV #COD #RTO #SaaS