The Link Between Payment Gateways And e-Store Credibility
The web is a nice, virtual place for businesses to sell products online, isn’t it? They can reach up to a pretty huge audience, after all! Naturally, the brick-and-mortar is losing ground.
According to Statista – the leading statistics company, 40% of the global population of Internet users has made some kind of online purchase or the other on smartphones, tablets, and desktop PCs. If calculated, this would come up to be a figure of over a billion buyers. And the population is growing still.
Now, it is the buyers who form what is known as ‘customer base’ for every eCommerce website. The moment you decide to sell something online is the moment you are actually contemplating lead generation, which happens only when you can take customers into confidence.
Well, it’s not just about how expansive your product niche is. It’s also about how wonderful the buying experience is. Yes, you’ve got to simplify the process of goods purchase. Thus, the payment gateway defines the credibility of your e-store big time. It has to be convenient and safe.
This system needs to collect a buyer’s credit / debit card information without violating security. And then, it has to facilitate smooth monetary transactions between your e-store and the third-party payment processor.
Think it’s a cinch? Wait, this is a rather exacting procedure – one full of technical complexities, data encryption, security protocols, and what not. If you’re a layman, this is going to be gobbledygook.
How It Works
- A potential buyer hits ‘order’ on your eCommerce website and is redirected to the payment webpage. This is the first step towards making a secure payment request.
- The gateway asks the potential buyer to feed the necessary billing information and preferred payment method.
- The funds are subsequently withdrawn and verified. If you are using a Merchant Account, the transaction request would be conveyed to the cardholder’s bank. Accordingly, approval or denial will be sent back to the Merchant Account. Alternatively, you can also behave as the payment processor and complete the entire process on your own.
- Once the payment request is approved, your webstore can issue a confirmation of receipt to the buyer, ensuring a successful payment.
Of course, picking the right payment gateway for your online store could leave you spoilt for choice. You need to think about varied currency support, fee, subscription billing, recurring payment, and more. As much as it sounds confusing, it’s important nevertheless.
So, Let’s Discuss The Ways To Choose The Right Payment Gateway
- Traditional Or Modern?
Payment gateways have come of age. If you’re sticking to using a Merchant Account, you’re being totally traditional. If not, you’ve chosen to be modern. Both are good.
Two very popular examples of traditional payment gateways are WorldPay and Authorize.Net. Integrating them in your e-store might require you to have a little technical know-how. They are not without hassles, but always a preference for eCommerce websites that are large.
The setup could be a little time consuming owing to the fact that not all banks allow Merchant Accounts and that the approval of application could demand weeks. Despite all the cons, traditional payment gateways are still in use because of the low per-transaction fee they attract.
On the other hand, modern payment gateways like PayPal and Simplify Commerce are winning users because of the facts that they require lesser setup time and a single valid bank account. However, if you don’t want to pay a greater per-transaction fee and are still struggling with customer conversion, this one could be a bad idea.
- Hosted Or Integrated?
This is one big decision. Whether you want to go for the hosted route or simply integrate the system into your website could make or break the user experience. It could lead to a purchase success or a failure. Remember, on an e-store, there’s nothing more important than making your visitors stay and positively make a purchase.
A hosted payment gateway will take users to the payment processor where the rest of the transaction will take place. If you don’t want to worry much about data security and PCI compliance, this is definitely the choice for you.
However, a potential buyer might not feel good about it. After all, it’s a little distractive. This issue can be resolved if you choose to integrate the payment gateway via API. The integration which usually takes 1 to 3 days, offers a seamless monetary transaction without the causing the customer to leave the website.
But yes, you need to have the technical expertise of integrating the payment gateway; it might ask you to put in a small chunk of investment. This apart, you will also be responsible for data security and complying with PCI standards. Security for payment gateway is always paramount.
- Fee Or No Fee?
A majority of payment gateways come with a signup fee. And then, there are certain gateways that come for free. The latter is a convenient option for eCommerce platforms running on shoestring budgets or those that have just started. But, if you are thinking about greater sales, larger product volumes, and more intricate features, a signup fee dismisses the sob stories.
Also, there are transaction fees involved, which are either charged per transaction (TDR) or on a monthly basis. Sometimes, the fee could rise depending on the extensiveness of usage as well. Basically, transaction fee feeds on the profit. So, the lower it is the better. This apart there might also be an Annual Maintenance Cost (AMC) involved.
For instance, PayU Money attracts zero signup fee and AMC. However, merchants are charged with a TDR of 2% for credit and debit cards, net banking, and digital wallets. On the other hand, CCAvenue would attract a signup fee ranging from INR 7,500 – INR 40,000, an AMC of INR 1,200 – INR 3,600, a TDR of 3-7% for credit and debit cards and 4% for net banking.
- re Add-Ons?
If your e-store allows recurring payments, the gateway must support it, too. This is a time-saving process which allows the purchase of goods on subscription. For recurring payments, always make room for automatic billing, lest you want to bother your customers with monthly renewals.
Further, your choice of payment gateway could also depend on what you are selling – products or services. Please note that some gateways allow only the transaction of physical merchandise. This apart, you have to integrate currencies and countries support so you can sell your goods globally.
Last, but not the least, customer support of some form or the other is extremely essential, whether you want to keep it one-on-one or otherwise.
Preparing to accept payment is the final step towards launching your eCommerce website. So, give your customers endless reasons to come back to your e-store. And don’t let a wrong choice of payment gateway ruin the game. Choose wisely, upgrade often, and see your sales soar.