There are many moving parts when you're setting up an online store. In order to get your digital commerce up and running, there's one thing you can't do without and that's the ability to accept payment.
There are different ways to process online purchases. At a minimum, you need a payment gateway to facilitate the transactions.
A payment gateway is an eCommerce service that processes payment, such as credit card, debit card, or e-check, by transferring key information between payment portals (e.g., a website) and the front-end processor (e.g., a bank.)
There are many service providers on the market. The quality and structure of their products vary and it could be quite challenging to find the right payment gateway for your eCommerce business.
Here are some key considerations when selecting a payment gateway provider:
Processing Speed
Does the payment gateway offer a fast and seamless user experience at checkout? Can it maintain a high processing speed even during times of high-volume (e.g., the holiday season)?
Processing speed is critical because a slow checkout experience can increase cart abandonment rate and impact conversion.
In addition, inquire about each provider's downtime and contingency plan in the event of service interruption to ensure that you're not losing businesses due to technical issues.
User Experience
A consistent user experience helps build trust and boost your conversion rate. The payment gateway setup can impact the customer experience by influencing your buyer's perception of the transaction.
For instance, using a hosted payment gateway (e.g., PayPal, Stripe) means an easy setup. These gateways are typically recognized by most customers and may add to the sense of trust and security. On the flip side, sending customers off-site to complete a purchase may reduce conversion for some merchants, especially when the customers aren't familiar with the payment processor.
On the other hand, you can create a more seamless checkout process on your website using API integration. However, it's more time-consuming to set up and adds more responsibility to your plate, such as ensuring PCI compliance.
Integration
Integrating a payment solution to your eCommerce store often delivers a smoother and more seamless customer experience compared to using an off-site hosted payment gateway.
To do so, select a payment gateway that integrates easily and seamlessly with your current eCommerce platform. Ask the service providers for technical specifications and evaluate their developer tools and API access to ensure compatibility with your platform.
A solid provider should also offer customer care and technical support to help you can get any issue resolved right away.
Security
Does the payment gateway offer the level of security and protection for your customers' sensitive data?
Buyers are increasingly savvy about data security and can get "spooked" if the payment processor doesn't exhibit the necessary security measures.
In addition, make sure the customer data passed from your online store to the payment processor is encrypted during transit and storage, and use a payment gateway that offers fraud detection tools, such as secure tokenization of transactions.
Terms and Conditions
Don't skimp over the small prints! Make sure you understand contract items such as early termination fees, processing volume requirements, transaction fees, monthly fees, minimum fees, fraud software fees, software integration fees, etc. so you don't run into unexpected charges or issues down the road.
Some service providers also specify the types of goods and/or services you're allowed to sell through the payment gateway. Even if the payment processor allows certain types of payment transactions, it doesn't mean the list applies to the payment gateway so it's best to get clarification if you aren't certain.
Transaction Fees and Charges
Payment gateways offer different tiers of fees and charges based on transaction volume and amount, which typically consists of a monthly service fee along with a flat per transaction fee.
To select the best plan for your business, calculate the “total cost” of all of the services you need to find the most cost-effective solution.
International Transactions
If you sell to international customers, select a service provider that handles both domestic and international transactions. It's typically less expensive and more convenient to have one payment gateway handling all the transactions rather than getting your domestic and international transactions processed by different providers.
In addition, don't forget to find out if there are any additional fees and charges involved in international transactions so you can factor them into your cost calculation.
End-User Preferences
Does the payment gateway offer the payment methods preferred by your customers?
Even though accepting major credit and debit cards typically work for most B2C transactions, B2B buyers often prefer to have more options in payment methods, such as ACH or extended credit.
Audit your existing customer preferences and make sure your payment gateway can support a variety of payment methods.
