Online Businesses are on the rise, the globe is tech-savvy and the E-Commerce/Payment gateway clutch is here to stay. Just to quote a few numbers, The Payment Gateway market was valued at USD 17.2 billion in 2019 and is expected to reach USD 42.9 billion by 2025, at a CAGR of 16.43% over the forecast period (2020-2025).
So, If you are a newbie to eCommerce you must be feeling spoilt for choice as to which payment gateway to choose and by now you must have taken a headlong dive e-looking for cost comparisons and offerings. The factor here to consider is to see which payment gateway is specific to your business type, size and locale. With almost innumerable choices in the market, the sense of clarity has diminished.
There are the pioneers, the giants, the established and the startups offering payment gateways. All of them get the job done and have their due league of merchants but there is so much to consider before your association with the right payment gateway. This read is aimed to give you that confident nod. Here are a few handpicked points to take notice of, while you are in the process of making the choice for the right payment gateway.
Before we focus on things to eye-on, let’s quickly put our readers through instant know-how of how a payment gateway functions.
When the Customer initiates a payment, the payment processor reaches out to the issuing bank and checks on funds. The Yay or Nay that the issuing bank says is then processed. If it was a Nay the decline is communicated. If it is a Yay, then the payment processor does a whole lot of layered communications to the merchant bank, deducts the amount from the Issuing bank account of the customer and settles the amount to the merchant bank account. The former is always instant and the latter, which is the settlement depends on the policies of the payment gateway provider. Besides every knock on either bank charges you a fee and so does the payment processor who does the knocking for you.
Now having said the long story short let’s understand what needs to be looked for before picking a payment gateway provider.
1) Channel Coverage and Adaptability
The Channel coverage of your payment gateway does most of the talking. The integration of Virtual POS, Recurring Payments, Server-to-Server Comms, Multi-lane POS, eCommerce and mCommerce is pivotal to any payment gateway infrastructure. Common payment platforms like debit cards, credit cards, UPI and Digital Wallets are the basics. But with future payment findings, the PG processor needs to be quick and accurate at adoption. Hence, it is important to consider a payment gateway that adapts to changes and embeds them easily into any type of business model.
2) Pricing, Success Rates and Service Agreement
First and foremost is the pricing that a PG provider offers, they all vary by a small margin. It is some percentage of the bill amount added to a fixed rate for every transaction. But it’s important not to be penny-wise pound-foolish here. The brand, the success rates and the goodwill matter to real-time businesses. It’s beneficial if the merchant bank is itself the payment processor. The issuer, credit card association and the merchant bank all charge a fee. But the payment processor that does most of the heavy lifting demands the major chunk of the cost. Where you can really negotiate is on the fees for setup and monthly usage. The Payment Gateway provider can have different tariffs/prices like flat-rate, flat-rate plus interchange fee or tiered pricing. It is important to look into their success rates and pricing policies equally.
3) Simple and Fast Onboarding and Integration
Once the pricing is clear and agreed with, it is now all about getting aboard. Statutory merchant paperwork, background checks and integrations need to be uber-fast and simple. A classy merchant dashboard with all necessary details of activities happening on the payment gateway junction is crucial. Your website’s neatly configured checkout page can be customized to offers, discounts or complimentary takeaways that may suit your business.
4) Time is Key
Customers today need the best service within the shortest time. The average time that a payment gateway takes to get back to the customer is a few seconds. So when you set up a payment gateway what should be majorly checked for is a reputation for speed. Slow transactions can lead to lost sales and failed transactions due to users losing patience and clicking “Submit” again and again. Speed can also signify that a processor has its ducks in a row. If a payment processor is slow, that may signal inefficiency or lack of capacity in the system.
5) Cross-Border eCommerce and Scalability
Some payment gateways provide the reach to overseas shoppers by connecting to local payment methods and acquirer banks, which is increasingly important for merchants looking to expand their businesses across borders. So it has to be strong and flexible enough to be configured to deliver the best payments experience at checkout.
6) Security and Risk management
eCommerce fraud is increasing and merchants have a responsibility to protect customer data and mitigate fraud. Payment gateways should be PCI-DSS compliant and must be integrated with defensive mechanisms of ML and AI for fraud detection and risk prevention solutions to ensure customer legitimacy. Data security tools such as tokenization and point-to-point encryption (P2PE) must be essentially incorporated.
7) A PG that Evaluates Consumer Behaviour
There are a few pleasantries/turnoffs that can amaze/disgruntle customers. A survey records that improvements in checkout design can boost the conversion rate by 35 percent. 59 percent of shoppers will abandon a transaction if their preferred payment method is not available. Payment processors that consider these kinds of nuances in consumer behavior give merchants more business.
8) Merchant Reports & Analytics
The merchant which is you should be duly informed of how your customers are making the purchase? Details of every transaction, mode of payments, customer payment trends and success rates of transactions are all reports that a payment gateway service provider should grant its merchant base. RFM analysis of potential customers and their demographics is crucial to any merchant.
The leaving notes would be to consider the above factors and find that compact payment gateway provider that suits your financial capability and complies well with your business needs.