As a business owner, you’ll need to consider a variety of factors before deciding which payment gateway is the best for your business.
Transactional rates might be one consideration, as you’ll want to make sure that any charges incurred from credit card processing are reasonable. In addition, you should consider the fees and rates associated with third-party providers as well as whether or not they offer an attractive value proposition or payback period.
The security of your payment gateway is also important because if data is compromised, it could have an adverse effect on your business and revenue. Outdated encryption methods and technologies may leave your company vulnerable to hacking and other cyberattacks.
According to Google research, 47% of global purchases are made online and by 2020, it is expected that 16% of retail sales will be done through eCommerce.
As more and more customers switch to digital purchases, businesses will inevitably need to expand into the virtual space. With that in mind, it’s important for online businesses to use business web portals embedded with payment gateways to ensure the seamless inclusion of features which facilitate easy & secure transactions between companies and their customers.
There are many different payment gateways to choose from. You have PayU, Razorpay, Instamojo, and CCAvenue to name a few. They all have different systems that you can choose from depending on what type of business you’re running. Whether your business has been around for a while or is just starting to take shape, the question of what payment gateway to adopt often hits a nerve.
Online payments via payment gateways are a great way to improve your cashflow and better serve your customers. Consider it if you’re looking to streamline their payment process.Paying is easy and fast with payment gateways, which reflect instantaneously on your end and help your cashflow.
A payment gateway helps people shop online easier by doing three things:
Ensuring the security of every customer’s credit card data
Ensuring there is enough liquidity for transactions
You can approve your transaction(s) and transfer the amount to your account upon request
All of this data is managed in encrypted payment gateway servers, so you don’t have to worry about getting hacked and holding sensitive customer data.
Consideration points to take into account when choosing a payment gateway:
Choosing the right payment gateway is an extremely important decision. Make sure you find one that aligns with your business model in order to avoid complications and an overall loss of money and business.
Here are the most important factors:
The most important thing to consider when choosing a payment gateway is how much it will end up costing you. You can calculate these three different costs using the following formulas: set-up fee=purchase price/μ, monthly fee=minimum σe+μN, transaction fee=σy+φy
To find the most cost effective payment gateway for your business, you need to look at how much and how often you transact. Most gateways charge a competitive 2.9% + 30ç per transaction. This might not work very well for higher-value transactions because the transaction fees would be too high; however, it might be a good option if you make small transactions often.If you do a lot of high-value transactions with your business, make sure you look at online payment gateways that charge a monthly fee for their services and offer low transaction fees.
Types of cards allowed
Paying with a credit card is usually the most convenient and can be paid for in a number of ways. Visa, MasterCard, and Amex are most common types of these cards and they can all be accepted by most e-commerce payment gateways.It is important to be aware that not all payment gateways accept all types of cards. If your customers usually pay with another card type, such as a debit card or a Diners Club Card and your payment gateway does not support that type of card, then you will need to change it.
Payments are usually approved almost immediately but the funds are then held for a few days. This allows for handling of refunds and charge-backs. The time frame can vary depending on the company, but it’s typically 1-7 days.You can choose to wait and receive your earnings immediately or get paid quickly and receive your earnings later (on mobile: getting paid at once or getting paid more slowly).
Multiple currency support
In order to accept payments from all countries, you need a global payment gateway that connects seamlessly with your website and allows for more diverse payment types.Make it easier for customers to pay with their own currency. A simple way of doing this is by having your checkout pages in their native currency (either by accepting payments in that currency or by converting to that currency on-the-fly before the transaction is processed). You’ll also want to check how much of a fee is charged per foreign exchange transaction which can also.
If you have a business which relies on recurring billing, make sure to choose a payment gateway that is capable of delivering what you need. A reliable provider needs to be able to store customer details, automatically charge credit cards periodically, and offer retries on failed transactions. If they don’t, you ‘ll need to handle these tasks yourself.
Hosted vs. non-hosted
A payment gateway can be hosted in a number of different ways. For example, a customer will either be taken to a payment processor’s website in order to enter their details or you could allow them to enter the details on your website without having to leave it.
The choice of payment gateways can be difficult to decide between. Hosted modes are able to cut down on the risk of storing sensitive information on your site, which is helpful if you’re running an e-commerce company.Although this is a huge advantage, the downside is your redirecting customers to other sites makes them go through longer payment processes. If customers have to go through a long process and the transaction fails due to a bug or other error, they might get frustrated and not try again. Businesses with high transaction values prefer non-hosted payment gateways because of this.
It’s important to make sure you are aware of the security standards of the payment gateway you are using. Different payment gateways have different standards.Check if the gateway you want to offer payment services for your customers is level-1 PCI DSS compliant. Some gateways come with fraud detection and other such screening tools to protect your business from fraudulent transactions
Mobile payment support
A lot of customers are shopping via mobile devices recently, so it’s important to select a payment gateway that can accept mobile payments. This will allow your customers to pay you no matter what device they’re using
There are some payment gateways that set an upper limit on the transaction amount that you can process per month. But this shouldn’t be a problem for many small businesses.However, if you are in the business of high-value items or have a large number of transactions to manage, remember any limitations are imposed on customers. So it’s important to stay aware of these limits and try to avoid them.
Integration with other systems
There are various benefits of connecting your payment gateway with your invoicing software, one of which is that when an online transaction takes place, the billing will automatically be updated in your bookkeeping system.Your accounting period starts on the moment when you make a payment, but accounting software can’t correctly show this. This will save time and effort in everything related to tracking your payments and updating your bookkeeping data when it comes in.