Thanks to the advent of online tools, small businesses can now sell their goods and services across what’s the most effective way to cater to the diverse preferences of a global audience during the checkout experience? In other words, how can you make it as easy as possible for anyone from anywhere to pay you for your goods or services. Because, let’s face it, the easier it is the more likely they’ll make a purchase and come back again.
Here’s the thing, your customers expect a quick turnaround time while buying your products. And if your business is unable to keep up with the speed or convenience that your buyers expect, you’ll probably end up suffering from losing their interest and losing sales.
So what’s the solution? Well, if you’re selling online to international customers, make sure to offer a variety of payment options at checkout. With digitalisation, one payment option that you may have heard of is the SOFORT payment. A popular online payment method, SOFORT lets your customers make instant bank transfers without the need for a credit card or e-wallet. This is a very straightforward and convenient way to receive payment for goods and services.
Using SOFORT also makes transactions happen much faster and reduces your payment processing fees. In this guide, let's take a closer look at what these popular SOFORT payments are, how they work, and which countries they're available in.
What is a SOFORT payment
SOFORT payment, also known as SOFORTüberweisung, is a great online payment method to make instant transfers that’s now making its rounds across Europe. Basically, the platform allows you to make direct transfers from your customer’s account to yours. It was launched in Germany in 2005 and has since expanded to other countries in Europe. The best thing about SOFORT is that it eliminates the need for any additional cards, making any type of transaction that much easier.
Currency conversion with SOFORT
SOFORT is primarily a payment processing platform which lets customers move their money while making a purchase. However, the platform also provides a currency conversion feature for merchants who wish to receive or accept payments in their local or different currency.
For example, If a customer from France is purchasing in the UK, then the customer can use SOFORT to convert EUR into GBP. This not only helps to get instant currency conversion but also helps businesses eliminate the potential exchange rate risks.
When your customer pays you in a different currency, SOFORT will automatically convert the payment into the merchant’s currency while using a currency exchange rate. The converted amount is deposited into the merchant’s bank in 0-3 days.
If you’re a merchant using SOFORT’s service, then you can easily get your currency conversion account running in your SOFORT dashboard. Additionally, you get the option to pick the currency that you prefer to get paid in.
In all, SOFORT's currency conversion feature is super handy for merchants who want to make their life easy while dealing with different currencies in their business.
Giropay and SOFORT
Generally people who know about SOFORT also know about Giropay. This is a similar payment method used in Germany that you will likely come across when shopping online.
Giropay definitely makes things simple for your customers allowing them to make payments to you directly from their bank account. All they need is an account with the participating German bank. At checkout, they’re redirected to their bank's online banking system where they can simply confirm their payment. The bank will transfer the funds straight to you, easy!
You’d be forgiven for thinking that SOFORT is pretty much like other payment methods available in many European countries, but there's one thing that keeps it ahead in the game - it’s a super safe way of making transactions online. SOFORT facilitates payments directly to a merchant’s account. Customers enter the payment method, their online banking details and confirm the payment just like Giropay. Another slight difference between the two platforms is that, with SOFORT, you do not need any specific bank account to use it.
So, both Giropay and SOFORT are fast and secure payment methods widely used in Europe. Here, the platforms eliminate the hassle of putting in your credit card details or any other kind of payment information..
Why businesses use SOFORT
Let’s get straight to why you should consider SOFORT as one of your services.
Today’s customers expect a speedy checkout. And with SOFORT, you get that kind of speed with your transactions. Basically, it enables people to make immediate payments and get prompt payment receipts. You won't have to wait long for the currency conversion or payments to clear because payments are typically processed practically instantly.
Instant processing further helps to maintain liquidity in your business. This money can be used for paying bills, buying inventory, or investing in the business. And since SOFORT is a trusted payment provider, businesses are assured that their money is safe and secure. A game-changer for businesses that want to streamline their payment processes and get paid faster.
Lower transactions fees
Using SOFORT can save you money - always a plus. Compared with the other payment options like credit cards, which come with high processing fees, SOFORT's fees are generally lower. This is because it's a direct bank-to-bank transfer - this means that the transaction happens straight between the customer's bank account and the merchant's bank. So, no middlemen, no crazy high fees!
Ultimately, this means adding extra cash to your revenue. This can be really helpful if you're a small business owner with limited negotiating power.
Another benefit of reducing costs is the ability to offer clients more competitive prices, which can eventually lead to increased business.
Increased customer base
By offering a popular payment option that many customers choose, SOFORT payment can assist businesses in reaching more consumers. Businesses can reach a new audience that may not have been able to make purchases in the past by offering SOFORT. This is particularly valid for clients who lack or prefer not to use a credit card for internet purchases.
SOFORT is a well-known and dependable payment option that can boost customers' trust in a brand. Customers are more likely to feel comfortable making a purchase when they see that a company accepts SOFORT payments. Businesses might experience a rise in conversion rates as a result, which would result in greater sales and income.
SOFORT's payment procedure is swift and simple, which helps enhance the user experience. Customers can complete transactions without having to enter their credit card details or other personal data, which reduces the possibility that they will make a mistake or become frustrated.
If your product or service is easy to get hold of and the user experience is positive - this often leads to those excellent organic marketing tools: favourable evaluations and word-of-mouth recommendations, bringing in additional clients and expanding the company - without you having to do very much at all.
One big advantage of using SOFORT is that adding it to a website's payment options is a breeze. This is possible because it has a range of integration options, which include plugins for popular e-commerce systems like Shopify and readily customizable payment widgets.
Additionally, once it’s integrated into the business website, it's equally easy to manage and track payments. SOFORT provides businesses with a comprehensive dashboard that comes with all payment information - including payment status, transaction history and conversion rates.
The bottom line is, that if you are a busy business owner, SOFORT can help in making your transactions quick and easy, without the need for special attention or resources.
Improved customer experience
When your customers have a great experience with your business, they’re more likely to get back to you. If your business is well-equipped with advanced features while also providing ease of shopping, you are typically improving your customer experience with a fast and secure process.
Businesses can use SOFORT to let customers complete their purchases swiftly, without forcing them to leave the business website due to glitches. They don't need to create an account or remember passwords, which technically saves time and reduces frustration. Plus, your company can offer real-time payment confirmation, so your consumers won't have to worry about their payment status.
And the best part? You can offer a secure payment process that tends to protect customers' sensitive information. This simply gives customers peace of mind when they are shopping with you. A win-win for everyone!
No risk of chargebacks
Another advantage of using SOFORT is that there are no risks for chargebacks. A chargeback happens when a customer disputes a transaction with their bank or credit card company and the funds are to be reversed to the customer. If your business' chargeback rates are high, it can put a negative impact on the performance of your payment and of course your company's liquidity. So, it's always recommended to effectively manage chargebacks!
With SOFORT there are no chargebacks because there aren’t any credit cards. The payments made through this platform are not direct debit, but direct automated transfers. For this reason, there are minimal defaults on the payments.
Which countries use SOFORT?
While SOFORT was founded in Germany, it has become one of the most preferred payment options by businesses. It is now available in 35000+ shops over the world with millions of transactions per month. With 15 years in the market, SOFORT has more than 80 million users and is available in a host of countries including
- The Netherlands
- The United Kingdom
It's used by all kinds of industries such as retail, travel and forex.
You don't need to register to use SOFORT's services if you have an account with one of their partner banks. A real-time confirmation is sent to the merchant, who receives the funds straight from your online bank account. So it's quick, secure, and practical.
What kind of businesses use SOFORT?
SOFORT is highly popular with all sorts of businesses across Europe. It's one of the top choices for online retailers - ones who sell products and services to customers in the EU zone.
Some of the famous industries that have been using SOFORT are e-commerce, travel, gaming and software companies.
In e-commerce businesses, it allows customers to make seamless payments securely. Many online retailers in Europe accept SOFORT payments making it a go-to option for online shopping.
In the travel industry, the platform is used by airlines and agencies to let customers pay for their bookings. The users can pay for their flights, hotel reservations and car rentals without having to worry about their payment information being exposed or compromised!
Many gaming industries have also adopted SOFORT into their operations so that players and gamers can purchase virtual goods or pay for their subscriptions, regardless of the currency they use.
Digital services like software companies, streaming platforms and companies dealing with international crowds regularly also love SOFORT for its convenience!
Overall, SOFORT is a versatile payment method that can be used by a wide range of businesses to offer their customers a convenient and secure way to pay.
How does SOFORT work?
Let’s get down to the nitty-gritty of how SOFORT works.
You started by creating an account on their website. During this process, you will be asked to provide some personal and business details that can verify your identity and check your eligibility.
Once you have done that, you get various integration options to choose from. These options are meant to give you a kickstart to payment acceptance through their platform. You can choose to use their API or one of their plugins for popular e-commerce platforms.
As soon as you are done with the integration, you will need to configure your payment settings. This will require you to set up your account details such as your bank account information and transaction fees.
Now that you have done this, the next step is to test your integration. You can do this by making test transactions using the test account provided by SOFORT.
If you start getting the payments and everything seems clear and streamlined, you can start accepting payments from your customers!
Making transactions from your business
SOFORT not only allows your business to receive money but also transfers funds directly from your account. You can make transfers to your suppliers, vendors or other business partners. In fact, SOFORT is built to be used by both consumers and businesses as a convenient payment option for companies dealing with different currencies at once.
So, if your supplier is in a different country in Europe, you can send money in your local currency and they can receive money in their local currency. However, it is worth noting that SOFORT is just used in Europe and you can only make transactions where SOFORT is available and used as a mode of payment. With SOFORT, you can transfer up to 25,000 EUR every 24 hours. But, if you want to send more money, you can always split your transactions into multiple transfers over a period of time.
How is SOFORT different from Paypal?
Although both SOFORT and PayPal are payment systems, they operate and function differently. SOFORT is a direct payment mechanism that enables users to pay directly from their bank account, in contrast to PayPal, which is primarily an e-wallet service.
The fact that SOFORT consumers do not need to have accounts in order to utilise the service is one of the primary distinctions between SOFORT and PayPal. To finish the payment process, all they need is a bank account and an online banking login.
On the other hand, using PayPal means you will need to create an account with them and link it to the credit card or bank account before you can start moving money.
Another difference is that PayPal keeps your money in an electronic wallet that you may use to make purchases. But with SOFORT, it contacts your bank to complete the payment using pre-filled information.
While PayPal charges a fee for currency conversion, SOFORT also provides this service and lets consumers pay in their own currency. The big difference of course is that PayPal is available everywhere while SOFORT is more or less confined to Europe and the UK for now.
We hope this guide was helpful in getting an understanding of what SOFORT is and how it works. If you have a wamo account and have taken advantage of our Shopify affiliation, adding SOFORT as a payment option to customers is a great idea.