84%. This is the percentage of surfers in Israel who make purchases on online trading sites every year. This is according to a survey conducted for Google and recently published on the Israel Internet Association website. The data reveals that 70% of surfers in Israel purchase on international websites, and 64.5% of them buy on local websites. Well, you can't argue with the numbers. More and more Israelis are making online purchases, and the field of online credit clearing is gaining momentum. Among the various sites that offer their customers online credit clearing, we can name virtual stores, portals, subscription sites (for example – dating sites or real estate boards), image sites and more.
If you are also interested in allowing your customers to pay by credit card online, you are probably debating which platform to provide the service. That is, whether to implement on the website an option for credit clearing via PayPal, or whether to choose a local clearing company. In order to make things a little more orderly, we will explain the costs involved in implementing a clearing system on a website and how to choose the appropriate solution.
What does online clearing include?
Without going into the dry details behind the clearing process on websites, a business owner who wishes to implement a credit debit system on his website should contact two parties – supplier and distributor. There are three credit providers in Israel – Isracard, Visa KAL and National Card. In the field of distributors, the selection is much greater.
The credit companies charge the business owner a commission per transaction (usually 1-2%), and the distributors offer various programs that include setup costs, monthly maintenance, fees and other products (for example, credit clearing on several different websites, credit clearing via mobile phone, automatic issuance of tax invoices/receipts, etc.). Another option for Israeli business owners is to implement a payment option via PayPal worldwide.
in the first stage – Should I choose an Israeli company or use PayPal?
One of the first questions a business owner asks himself is whether it is better to choose an Israeli distributor or whether it is worth using PayPal. This is of course a question to which the answer varies from business to business, but in most cases it can be said that an Israeli business that sells its products to Israeli customers will act correctly if it implements a local distributor system on its website.
First, PayPal does not accept all types of credit cards in Israel and experts estimate that it is about 10% (at least) of the cards that do not go through the system. Secondly, PayPal charges a relatively high commission and sometimes it is no less than 3.5%-4% of the revenue volume. An additional fee is charged when withdrawing the funds from the bank account in Israel. Since Israeli distributors charge lower commissions, and also offer commission-free packages with a fixed monthly payment of only a few hundred shekels, the choice of PayPal will usually be made in exceptional cases (or as an additional option).
The Israeli companies enjoy a significant advantage in that they know Israeli consumers well and provide a high level of availability. Also, they offer products that are specifically suited to electronic commerce in Israel and know how to go towards the customer if necessary (for example, to be flexible with new businesses that need good conditions to start the virtual store ). Their products include additional elements that expand the canvas, such as credit card readers that connect to a computer or mobile phone, solutions for bank transfers from regular customers, and the like. That is, beyond the current costs which are significantly cheaper than PayPal's service, the Israeli clearing companies provide the business owner with additional customized services.
When is it recommended to use PayPal?
Despite the high fees,Adding a PayPal payment to a website also has benefits. First, PayPal implementation is easy and shorter than working with a local distributor. This is for the simple reason that the business owner is not required to provide information to banks, credit companies, etc. All he has to do is embed the PayPal buttons on the site and the store is ready to go. Another significant advantage is the option for surfers to pay via PayPal directly without revealing their credit card details to a website they don't know. That is, payment via PayPal prevents unnecessary concerns among potential customers.
PayPal is known for its high security standard, and it assures the business owner and his customers that the personal and sensitive information is kept throughout the purchase and after. Also, the company does not charge one-time setup fees or require the installation of additional software. It does not require a fixed monthly payment (you didn't sell – you didn't pay) and thanks to that it is considered a relevant option for new businesses at the beginning of their journey. In addition, PayPal provides advanced services to websites that want to collect regular recurring payments from subscribers and the like.
An Israeli business that operates with international clients or on particularly large volumes can certainly prefer PayPal, a renowned global clearing company. Despite the fact that the Israeli distributors also adhere to strict safety standards, PayPal enjoys a reputation for carrying out credit transactions on the Internet. Therefore, there are definitely cases where the potential target audience of the business would prefer to make transactions using PayPal, and would avoid leaving credit card details on a website they do not know.
How do you choose the right package?
Distributors who offer clearing services for websites make different packages available to the customer depending on the scope of the transactions in question. This, both in terms of the scope of revenues and in terms of the scope of clearings (transactions). Most often, the business will be able to start with a certain package and grow to the following packages as a result of its growth. When choosing the appropriate package, you should of course consider aspects such as setup costs (opening an account), monthly operating costs, yes/no fees, ancillary products, security and more. In addition, it is recommended to conduct a market survey between the various distributors and even negotiate the first prices offered to the customer.