If you're thinking of setting up an e-commerce platform or already have an online store, you need a way to process customer payments. After all, you're running a business and your customers need a safe, convenient, and easy-to-use payment system.
Long gone are the days where customers would only shop during store hours and merchants kept a physical record of their transactions or collect cash for payments. Today customers can make purchases from anywhere, anytime. To be able to accept electronic payments and authorize their transactions, you need a payment gateway.
A payment gateway is a service that allows for the processing and authorization of different forms of customer payments in brick-and-mortar stores and e-commerce websites. It serves as a cash register for maintaining electronic payments and safeguards sensitive details concerning the transactions.
"As your business looks into utilizing a payment gateway, it's important to look beyond the gateway. Many gateways offer all the basic features you need to process payments online, but it's equally as important to choose one from a payment processor that will be there to support you following setup," says Angelo Mendola, President and COO of Priority Payment Systems Local. "Reliable and knowledgeable 24/7 support is key for online businesses that are forever open."
Choosing the right payment gateway is critical as it determines the payment methods you can adopt, how fast customer payments get into your merchant account, and how customers feel about purchasing from your store. Ultimately, adopting the right payment gateway will not only decrease cart abandonment on your site but also increase purchase conversions. Here are five important tips to help you choose the best payment gateway provider for your online store:
Study the Pricing and Serving Agreement Requirements
Several financial organizations are involved in payment processing and authorization and each charge a fee. Pricing often depends on several factors including the markets you're serving (across the country or international), your business sales, type of transactions your business conducts (in-person or online), and product type (digital or physical).
Different payment gateway providers have different pricing models. So, you want to take the time to study pricing and service agreement requirements for payment gateway providers you're considering. Some providers charge monthly, some on an annual basis, while others charge on a transaction basis. Usually, you'll have to pay some registration fees, merchant account setup, a once-off gateway set fee, a monthly connection fee, and a variable or fixed fee for each transaction processed. Be sure to get all the pricing details and figures for each fee you'll be charged, and confirm whether these include VAT. Avoid providers with hidden charges on transactions.
Make Sure the Provider Supports Your Customers' Preferred Payment Methods
According to The Paypers' 2019 Payment Methods Report, 86% of online shoppers pay for purchases using debit or credit cards, and about 60% of consumers prefer using electronic payments when making a purchase. Global mobile consumer payments reached $980 billion in 2018 and are expected to rise as mobile commerce grows.
Looking at these statistics, it's clear that merchants need to make sure their online stores support those payment methods. But they don't have to be the only methods your platform supports. Choose a payment gateway provider that supports your customers' preferred payment methods as well as those that are popular in your country, region, or industry.
Consider Ease of Integration and Usability
The best payment gateway provider should be the one that not only satisfies your customers' needs but also best suits the functionalities of your business. Choose a payment gateway provider that can integrate with your e-commerce platform and other software tools your business is already using. The easier a service payment gateway provider makes it to connect and integrate, the better.
Ensure the Provider Accepts Multiple Currencies and Permits your Product Type
Many payment gateway providers offer multi-currency support, so it's only a matter of choosing one that best suits your business. If you run a local business that focuses on a specific market, consider a service provider that includes your customers' preferred currencies. However, if you serve an international market, you'll need to choose a gateway provider that allows your customers to pay for their purchases, regardless of what currency they use.
The gateways you implement should include the currency- or currencies in which your customers pay for their purchases. Failure to do so will affect your conversion rate and impact your bottom line. Another important aspect is your product type. While most gateway providers cater to both digital and physical products, some payment systems can be used with only one type of product. It's therefore important that you make sure the payment solution provider you choose permits your type of product.
Security is a Non-negotiable
According to a 2018 Thales Data Security Report, 75% of merchants in the United States have suffered hacking attempts and cybersecurity failure with their e-commerce platforms. The purpose of a payment gateway isn't just about providing your customers with a convenient way to pay you. It should provide a secure connection for carrying out online transactions while safeguarding customer information and data.
Different payment solution providers adhere to different security guidelines and standards. Choose a provider that's level-1 PCI and DSS compliant and provides a buffer of encryption between customers and your online store. This will help fend off hacking attempts in real-time and protect your store from fraudulent transactions.