E-commerce Solutions May 5, 2016

Choosing A Payment Gateway for Your eCommerce Store – A Business Owner’s Guidebook

Written by Analytix Editorial Team Jagruti Patel

A payment gateway is essential to an eCommerce store. It allows your business to sell your products or services through your website. Payment gateways integrate the online payment processing and your merchant account. A payment gateway allows electronic payments to be processed between the online store or eCommerce business, the customer’s credit card, and the bank issuing it.

Apart from an effective website, your payment gateway is essential to customer retention.  Even if your website draws visitors and your content retains them, if your payment gateway is not meeting their needs, customers will opt to purchase with another vendor.

What should you look at when choosing a payment gateway for your business?

Considerations for choosing a payment gateway:

  • PCI compliance: The Payment Card Industry Data Security Standard (PCI DSS) is a requisite for any business, regardless of size. It essentially regulates customer data throughout the payment transaction process.
  • Sign up fees: There are different kinds of fees that are levied, including processing fees, monthly fees, or transaction fees.
  • Types of payment: Does your business need a single lump-sum or recurring payments? Furthermore, would your website accept payments from businesses with listings on your site?
  • Payment method used by customers: Apart from cards such as MasterCard and Visa, there are region-specific currencies and cards at times. Depending on your target audience and customers, you need to ensure a payment gateway that is compliant with their mode of payment.
  • Merchant account required: Do you already have a merchant account or do you need a service that provides both, payment gateway services as well as a merchant account?
  • Customer support: This is for you. What kind of customer support is provided by the gateway to you when you need troubleshooting? Do they respond to phone calls? Are they available on live chat or only via email? Choose whichever works best for you and allows your business operations to carry on uninterrupted.

Payment Gateway Options for eCommerce Websites

Hosted payment gateway:

Hosted gateways redirect online customers to the platform for payment processing. All payment information is thus directed to the processor who hosts this platform. This appeals to business owners because a merchant account may not be needed, nor any confidential data. The responsibility of managing data security falls on the provider. This includes standard regulatory compliance, as well as data security measures.

However, this format may also drive away customers as they need to “leave” your store. This may also enforce brand association of the gateway provider instead of reinforcing your own.

Payment gateway integrated with your business:

In this setup, the gateway connects with your eCommerce website through the Application Program Interface or API provided by the gateway. The advantage with this system is that it does not direct the customers out of your eCommerce store. It is integrated, creating a seamless experience for the customer. They input all their information directly and submit the order within the store.

If you are uncomfortable sharing details and information that could be perceived as confidential, including customer card data, then this is not the ideal option for you.

About Author

Jagruti Patel manages the application development division at Analytix Solutions which includes custom software, website and eCommerce site development. She has a diverse and cross cultural background ranging from working with startups to established brands across different continents.

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