How do you determine the best online payment method for an e-business to use when entering a foreign market?

Since most e-business is global, there is usually no need to establish a separate payment system for a particular foreign market. But this broad statement assumes you already have a payment system, such as a credit card payment system, in place for your business. If this is the case, you simply extend your current payment system so that it can accept payments globally.

If you do not already have a payment system in place, then determining the "best" system depends on your budget and requirements. For example, most credit cards provide online payment systems, but they typically require large transaction volumes because they are expensive. Banks also provide this service, but again they often demand minimum volumes.

If your needs are not that great, many private companies are in the business of online payments and can handle smaller volumes. Usually these companies charge a small percentage fee for each transaction. Often this is more expensive per transaction than a credit card system would be, but is much more cost effective if you do not have the volumes required by the credit card companies.

With any payment system, you should concern yourself with 2 points. First, ensure that it is universal in terms of geography. If your only foreign market is the United States, then you may have no problem. But if you are considering any other country, you want to be sure the system will accept payments in that country and its currency.

Second, ensure that your system has strong security. Payment systems are prime targets for online data thieves who use stolen data to commit identity fraud. They must be extremely secure. You do not want your customers' data to leak out to fraud artists.

Your best bet is probably to sign on with a very large payment company at first until you have determined the extent of your e-business needs. PayPal, which is owned by eBay, the world's largest marketplace, is probably the best example of both universality and security. But others are equally good.