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Internal Market, Industry, Entrepreneurship and SMEs

Payment preferences

Along with the benefits for the tourist, e-commerce can also benefit your business. For example, you can gain a better understanding of your clients’ interests through their habits and payment preferences, while the process of paying electronically is quick and efficient.

If you decide to incorporate e-commerce into your business, it is important that you fully understand the EU legal regulations for e-commerce and requirements for each method of payment. This way you can ensure that your company procedures are compliant and up-to-date.

With the options of cash on delivery and bank transfers, payment is made at a later stage – not during the purchase online. For these types of transactions, you do not need a specific secure payment system for the time of 'purchase'.

Should you make online payments available, you must create a secure online payment platform for your customers, with no risk to their security or privacy.

What are the advantages of electronic payments?

Impulse to buy
Customers can pay as soon as they feel the impulse to buy. This can work especially well if you offer the customer a product or service in real time, such as a ticket. This impulse behaviour usually occurs with local purchases and items that are relatively low-priced (less than €150).

Security and credibility
Customers know that card payments provide a greater amount of user protection and this can make the customer more willing to buy your products and services.

Cost of currency conversion
Your business receives the purchase amount in the local currency. The currency exchange fee is taken on by the customer.

Encouraged to upgrade purchases
Customers who pay using credit cards are more likely to spend more as they can spread payment over a longer period.

Money is available quicker
You receive the money from credit card payments within 24 to 48 hours – faster than other payment methods such as cheques or transfers.

What are the disadvantages of electronic payments?

The cost
Accepting card payments is not particularly economic for tourism businesses. If you are a small operator, you can expect fees of around 1.5% to 5% per transaction. On top of these fees, there is sometimes an additional cost of between €5 and €15 per transaction.

High level of consumer protection
Faced with a conflict between the tourist and the business, card-operating companies tend to favour consumers. In such situations, the tourism business is the one that has the burden of proving and documenting delivery of product or service.

Entities that operate cards
Entities operating the cards may require deposits of a higher value than the tourism company’s transactions in a given period of time (e.g. 1 month). Having this amount of money available can be a problem for many small businesses.

Adapting your company website

If you take card payments on your tourism company website, your website must have a security certificate – this guarantees the encryption of client data. Security certificates allow you to encrypt data exchanged between your customer’s computer and the server on your website. This means that it is impossible for the data to be intercepted by a third party, so any sensitive data remains safe and secure.

It is common to find the 'closed padlock' icon and a URL beginning with 'https:'. These are symbols of secure payment, indicating that the page uses a technology called Secure Sockets Layer 'SSL'.
There are many suppliers of SSL certificates on the market and prices vary. However, these certificates come at a cost.

Despite the disadvantages of taking card payments, many small businesses use payment gateways. It can be beneficial to know which providers are used by other entrepreneurs. If you belong to an entity like a chamber of commerce or a business association, you can ask if it has an agreement with a provider of online credit card payments – this may offer you better rates.

Remember to include a section on your website that provides the terms and conditions for the electronic payment of your company’s products and/or services – this will protect you should anything go wrong.

When choosing a payment system, make sure that the buyer can purchase in their native currency. In tourism, buyers usually come from different countries around the world. It is therefore vital that the gateway supports payment in euros and in US dollars as a minimum – ideally, pounds sterling should be supported too.

When choosing the type of payment system, you will also need to consider the cost/investment that you need to make, depending on the characteristics of your company.

Further reading on electronic payments

Legal regulations for e-commerce