Not Sure Which Payment Gateway to Choose? Ask Yourself These 8 Questions
To be in business, you must have a good product. To be able to sell your product, your customer must hand over cash to make a purchase. For online stores, however, customers can’t physically do that. That’s why you need a way of accepting payments conveniently and securely.
That’s what a payment gateway is for.
A payment gateway validates a shopper’s credit and debit card details securely, and makes sure there are funds available so you can get paid. Without a payment gateway, you have no way of receiving online payments from customers. But there’s more to it than that. The right payment gateway also ensures your customer’s personal and financial details are secure, and that transactions made on your website won’t compromise their information.
With the vast array of payment gateways available today, it can be confusing to choose which gateway is right for your brand. To help you, we’ve assembled a list of questions you should ask when selecting a payment gateway.
1. How secure is the payment gateway?
A key concern in selecting a payment gateway partner is obviously security. Make sure to only use a system that complies with the Payment Card Industry Date Security Standard (PCI DSS). Tools for screening and fraud protection must also be in place to ensure you don’t compromise the privacy and security of your store and customers.
Other advanced security solutions you’d want to have include Advanced Verification System (AVS), 3D secure function, and IP geolocation, among others.
2. How soon do you need to begin accepting payments?
Do you have a tight deadline for your website launch? Or perhaps looking to integrate a new payment gateway in your current store?
Setting up a payment gateway is relatively easy, as some providers such as PayPal and Stripe lets you get started right away even without a merchant account. Your merchant account is where your funds will be held before being transferred to your bank account. Most providers provide help in setting up a merchant account. But obtaining can be a long process, which may take around 3-4 weeks. This is especially true if you’ve just started your business.
3. How much budget do you have?
Payment gateways let you accept money, but it also takes money for you to be able to get one. Before committing to any provider, it’s important that you consider the pricing and fees. Nearly all payment gateways charge three different fees: set-up fees (a one-time charge for the creation of a new account), transaction fees (charged for authorization in every transaction), and admin fees (a fixed fee charged monthly or annually).
If you’re just starting out, or only take a low volume of online payments, then it’s worth looking out for a payment gateway with little to no setup cost and low transaction costs. Stripe, for example, is free and quick to setup. Direct Debit is also less expensive than card payments.
Whichever provider you choose, it’s important that you are aware of the fee structure, and ensure that it matches your business’ needs not only at present but in the long run.
4. When do you need to be paid?
Also consider the payment timings of the provider you’re looking into. Some payment gateways would remit your funds back to you as quickly as the next day, while others would hold onto your funds for a couple of weeks or a month. Ideally, for beginners, it would be good if you choose a provider with daily pay outs.
5. Do you need a payment gateway that features multi-currency processing?
If you’re catering to a global audience–or are planning to in the future–it is helpful to check whether the provider supports international payments or if it can be translated to multiple languages.
For instance, if you’re selling digital products, it may be worth considering to offer it internationally since there are no shipping costs involved. However, you should also find out whether there are extra charges for accepting payments from other countries.
6. Do they offer support when you need it most?
With e-commerce, the doors never close, which means customers can come through your day any time of the day for the rest of the week. It’s important, therefore, that your payment gateway partners offers an appropriate level of customer support that fits your needs should any issue come up.
Other questions you might want to ask include:
- Does the provider offer only email, chat, or telephone support? Or do they offer a combination of these?
- Does the level of support you receive depend on the amount or number of transaction you process?
- Is their support team responsive enough or not at all?
- Do you need to pay additional fees to take advantage of customer support?
You can do a research online to find out other customers’ experiences, or contact the provider to judge for yourself how they interact with prospects.
7. Does the provider process payments on site or off site?
Off site or hosted payment gateways redirect shoppers from your online store on to their website to complete the transaction, and then return them to your website once the order is confirmed. Hosted solutions, such as Paypal, reduces the risk associated with storing and transacting credit cards. However, this extra step could lengthen the checkout process, and may discourage customers from completing the payment.
Meanwhile, on site or non-hosted payment processing means your customer won’t have to leave your website while proceeding with their purchase. Typically, you would need an SSL certificate and be in compliant with various PCI requirements to accept payments onsite.
8. Can the payment gateway be easily integrated with other e-commerce solutions you use?
To avoid any problems, it’s good to choose a payment gateway that can be seamlessly integrated with other solutions you are using, such as your billing, accounting, and shopping cart. This will save you time and increases convenience in the long run.
Adding a payment gateway to your e-commerce shop is one of the most crucial steps you will take, especially in the pre-launch phase. Remember, it holds the key to your sales and bottom line, so it’s vital to get it right the first time.