Every business needs a payment system to finalize transactions.
Customers need a way to pay for their purchases, and you need a way to accept these payments.
Customers expect you to offer a payment system that’s easy to use, fast, safe, and more convenient. As a business, you also do want to benefit from it.
The payment solution you choose should satisfy both your needs for the customer and those for your business. That means that it has to be
- Certified or safe from fraud
- Support various payment options
- Suited to work well with your platform
To enable electronic payments and process debit or credit cards, you’ll need to use a payment gateway. The choice you make will affect,
- Your transaction fees
- The payment options you can offer
- Currencies you can accommodate
- How long transactions can take to complete and receive money into your account
Make sure you find the payment gateway that’s best suited for your needs.
Why is this so important?
Statistics reveal that 11% out of the 23% of customers who abandon cart do so because the checkout is too complicated. The remaining 12% do so because the system required too much information to complete.
In this article, we’ll discuss payment gateways and how to choose the right one to integrate digital payments with your business.
What is a Payment Gateway?
A payment gateway is a payment solution that allows you to perform online transactions using different options such as net banking, online wallets, debit cards, credit cards, and on. Its role is more like that of a middle man to connect the buyer’s bank or the issuing bank to the seller’s bank or acquiring bank.
There are 4-key ways you can use to integrate a payment system. These are
1. Hosted Gateway
With a hosted payment gateway, your customers will have to leave your site to complete their purchases. It operates as a third party.
2. Direct Post
Direct Post integration allows customers to complete their purchase without leaving your site.
3. Non-hosted Method
Non-hosted payment gateway lets you keep the customer on your site during the purchase.
4. PCI DSS Compliance
PCI DSS means Payment Card Industry Data Security Standard in full. Becoming PCI DSS compliant is necessary to provide card payment services.
Factors to Consider Finding the Right Payment Gateway Provider
Now that you are aware of the integration methods you can use, you need to find a payment gateway service provider for your business.
Like everything else, there are so many payment solutions available in the market, and they all vary depending on the purpose, swiping machine charges, compatibility, among other things. In short, not all of them will suit you. Understanding your specific business needs and those of your customers is necessary to find the payment gateway provider that works best for you. To achieve that, here are some of the most important factors to consider.
1. The Pricing
Payment processing is a complicated process that involves several organizations or financial institutions. And like any other service, payment gateway service is not free. You have to pay a certain amount of fee for using a third-party application to process and approve your transactions. In essence, every party involved in the payment authorization/verification or processing comes at a fee. These swiping machine charges will vary depending on the amount, product (digital or physical), and location (local or international).
Each payment solution has its own terms and conditions apropos how you use it and the fees involved. In general, you have a setup fee, monthly fee, merchant account setup fee, and a per-transaction fee for all payments processed.
Make sure you understand the pricing to avoid hidden charges and any other unnecessary expenses.
2. Merchant’s Account Option
A merchant account is a contract between you (the merchant) and your bank (the acquiring bank), allowing them to process your transactions.
You can open a merchant account either through your bank or your payment gateway provider. If you already have one, consider what the provider has to offer. Otherwise, opt for a payment gateway provider with a merchant account service right from the start.
3. Payment Methods and Currencies
PayPal, credit cards, debit cards, QR codes are some of the most popular payments. However, that does not mean they are the only options you can support. There is no limit to the number of payment methods you can provide in your business as long as they are relevant. In fact, the more options, the better.
If you are running an international business, consider a payment solution that supports multiple currencies to accommodate all your customers regardless of where they are and the type of currency they use.
4. Consider Your Product Type
The products are of two types, digital and physical. Some payment providers can support both options, whereas some others can support only one. Make sure that they can cater to your preferred type of product before you commit.