The term “payment gateway” a technical term that is becoming increasingly more popular in e-commerce websites in particular.
Put simply, a payment gateway is a source of technology that sits between your website and the payment network and is how you accept customer payments through your website. So, if you’re thinking of creating an e-commerce website, you’re going to need a payment gateway.
However, choosing the right one for your business can prove to be a tricky task. But with the help of this article, the perfect payment gateway should seem a whole lot nearer.
The First Steps To Choosing A Payment Gateway:
There are a number of things to consider when choosing a payment gateway for your business, including:
1. Will it integrate easily with your website?
This is the first thing and possibly the most important thing you need to think about. The chances are high that your system will have specific payment gateways that they have pre-built integrations with. If it will cost you time and money to integrate your gateway, you may want to avoid it.
2. Think about your target market:
When it comes to choosing the perfect gateway, users can often forget their target market. And what I mean by this, is that you should consider whether the payment gateway supports the methods that your target market use.
To combat this problem, do some research into your target market. And don’t be surprised if your system needs to support more than one payment gateway.
3. Consider using PayPal:
To elaborate on what I just said about needing to use more than one gateway, PayPal is the most obvious choice as a secondary alternative as it allows users to purchase products without having to input their bank details.
4. What are the fees?
We’re all aware of the fees that get added onto a bill as you work your way through the payment process. Things like payments from international cards and chargebacks are all important bits of information that you should think about before signing up.
You can use various comparison websites to get a clear overview of the fees from each provider.
5. Think about merchant accounts:
Payment gateways don’t stand alone, you should also think about merchant accounts, as these allow you to accept credit cards. Providers such as Sage and Page Flow Link only offer payment gateway and require you to have a merchant account.
On the other hand, providers such as Chase Paymentech and PayPal offer all-around accounts.
6. How long is the contract?
A fairly obvious one for payment savvy users, but something that often gets overlooked with all the excitement of setting up an online business. Most providers nowadays lock organizations into long term contracts of two years or more, which can be a problem if you haven’t undertaken the necessary research into the company you have chosen.
Always be wary of smaller independent providers that don’t have many reviews or recommendations. With that said, do your research beforehand, because they could be a brilliant new start-up business.
7. Is your organization ‘high-risk?’
High-risk businesses are those who handle thousands of dollars on a daily basis, organizations such as banks and merchant account providers are examples of these. When choosing your payment gateway, some providers might not be able to support high-risk businesses, so there’s a chance that they will turn you down.
To get a clear understanding of your business, payment gateway providers might take detailed credit applications. This is normal, but it may result in you having to find another alternative.
A Quick Look at Some of the Most Popular Payment Gateways:
There are tonnes of options to consider, and if you haven’t already started your research, here is a quick look at some of the best payment gateways and their key features.
Average cost: 2.9% + $0.30 transaction fee
Recommended for: Users looking for a second alternative.
Pros: Larger user base, handles international payments effectively and works across all platforms.
Cons: Higher monthly fees
Average cost: 2.9% + $0.30 transaction fee. 3.9% fixed international fee
Recommended for: Users that want easy integration with their website
Pros: Accepts 6 credit cards, no monthly account fees
Cons: They only provide email support
3. Amazon Payments:
Average cost: 2.9% + $0.30 per transaction and a $20 chargeback fee
Recommended for: Smooth and seamless checkout process
Pros: Protection against fraud, trusted e-commerce brand, Amazon 1-click information
Cons: Customers are limited to buying 20 products at once
Average cost: 2.9% plus $0.30 per-transaction fee
Recommended for: Excellent support features
Pros: Owned by Visa, easy to integrate, fraud protection services
Cons: Requires a merchant account, one of the most expensive payment gateways
Average cost: Signature debit transactions at 0.99%. Standard credit transactions at 1.99%. Rewards credit transactions at 2.6%
Recommended for: Users that want a larger more trusted company
Pros: Lower transaction rates
Cons: Three-year contract required, poor customer service reviews
As you can see, the top 5 payment gateways each host a number of unique features. Choosing the best one for your business depends on a number of things, including cost and fees, customer service, and compatibility.
My tips for finding the one which is best suited to your business is to conduct a large amount of research beforehand. Because, as some of the providers may appear to have similar attributes, the deeper you look, the more unique features you will find.