For choosing a payment gateway provider, companies need to choose the right payment flow, security system, ease of transaction, and a few other factors.
The popularity of e-commerce sites is rising every day. Since the ongoing pandemic, the profit and reach of online businesses and eCommerce platforms have skyrocketed as it eliminates the hassle of physically going to the market for buying necessary products.
How successful an online business depends mostly on the quality of its product, but having a good payment system is equally important since it makes payment transactions easier for the customers.
There are multiple payment gateways providers, and businesses have to do some research to find the right one. But before we dive into the issues businesses need to consider, let us take a slight detour to learn more about what payment gateway providers are and how they work.
What Are Payment Gateway Providers?
An online business needs ways to receive payment online. Payment gateways are used to transfer payment from customers to the business. They are a type of software that enables the secure transfer of credit card information from a website to the credit card payment network for online payment. This is considered one of the safest payment methods.
Organizations that provide this software to an eCommerce business are known as payment gateway providers.
According to research by the European payments’ council, 86% of customers prefer to conduct online payment through credit or debit cards. A payment gateway creates an interface for the customer, which allows them to make payments for the products they bought online. The most popular providers are PayPal, Skill, Amazon Payments, etc.
How a Payment Gateway Works
First, the customer needs to confirm their purchase. Then they will see an interface on the screen of their device. The payment gateway providers create this interface. They need to fill up necessary credit or debit card information.
Next, the website encodes the data, which will be sent between the website and the customer’s web server. After that, the interface, or the payment gateway, sends the transaction data to the payment processor used by the customers’ bank. The data is again transferred from the payment processor to a card affiliation.
The bank that issued the credit or debit card then checks the data and either approves or denies the purchase request. If the bank approves, then this information is sent to the processor, which goes to the payment gateway interface. Finally, the interface provides the online business website with the information of payment approval and confirms the payment.
How to Choose the Right Payment Gateway Provider
Now let’s discuss some important factors businesses need to consider when choosing their provider.
1. The Flow of the Payment
A business can select two major options for the flow of its payment method. It can have a site with an integrated payment form or can redirect the payments.
For the first one, all necessary transaction information is passed to the gateway provider through a secure form. The second method redirects the customer to another page where they need to fill out transaction information. People usually prefer the secure form.
2. Find Out What Customers Prefer
The customers will not have access to many payment gateway providers all the time. For example, a customer that has access to PayPal might not have access to Skrill or Amazon payments. Therefore, the business needs to do some research and find out which one is more preferred by customers.
The businesses also have the option to have multiple payment gateway providers, but that requires a lot of money and is difficult for start-ups to manage.
3. The Security System
The gateway provider needs to be safe, secure, and registered. Not all providers are trustworthy. A non-registered gateway provider might steal valuable credit card information and put both the business and the customer in danger. So the business needs to ensure that the payment gateway provider has proper security standards such as PCI-DSS.
4. The Swiftness of Transactions
If a customer finds out that they need to open a separate account for transactions or fill out a bunch of forms, they may lose all interest. To avoid these situations, the online business can either completely remove the account creation system, or get a guest system.
If the business website has a guest system, the customers can buy a product as a “guest” without opening an account on the website. But there still will be an option to open an account if they desire in the future.
5. Compatibility with the Organizations’ Website
Business organizations also need to ensure that the website is well compatible with the payment gateway software. Otherwise, it will delay the website and increase the loading time of each page.
According to research by Google, 53% of people will leave a website if it takes over 3 seconds to load. The online business needs to update the website and ensure it goes well with the gateway software.
6. Focus on Customer Service
Customers often face difficulty during the transaction or while filling out necessary card details. Sometimes, they will face problems like the payment not getting confirmed. In such cases, they need to have a form of customer support that will resolve their issues.
Some payment providers only provide their services through emails, which are lengthy and not everyone will get their problems resolved. If a business organization wants to achieve success through online selling, they need to select a provider which has direct customer service.
7. The Provider Should Support the Business
Not all providers go hand in hand with the businesses they associate with. Visiting the website of these providers will resolve this issue. For example, PayPal does not have any relation with the adult industry or most online dating industries.
So if a customer wants to buy adult content, they cannot use PayPal for monetary transactions. This means a customer cannot buy any product or services from a business organization if the payment gateway provider blacklists them. Therefore, the business organization needs to ensure that they are not on the blacklist of their chosen provider.
With the ongoing popularity of the online business, it will not be a surprise to see online markets and stores overtaking physical stores. But for a business organization to be successful online, they must first choose the right payment gateway provider and hopefully, this article will be able to help you out.