Selecting a payment gateway is a crucial process for any e-commerce business. Several factors need to be considered and looked before making decision. It’s understandable if you are overwhelmed by all of the options. Especially due to the sheer volume of payment processors on the market, but don’t worry! This post will give you the information and help you to make a wise decision in selecting appropriate payment gateway for your e-commerce store.
Tips to Choose Payment Gateway
Check out some of the useful tips to Choose Payment Gateway wisely.
#1 Payment Methods Preferences
It is very important for you to understand what payment methods are preferred by your targeted customers. Their payment methods preference is important for your company. If you simply subscribe a payment gateway without knowing the possibility people will use it, it will be useless.
For instance, if you are targeting a location where people are comfortable to pay with Credit Cards only, then giving them other options could be redundant. It could even become worse if your online store has all other payment methods except credit card. You may end up losing your sales. So, please do some research to find out your customer preferences?
#2 Processing Fees charged by Payment Gateway
In whatever business you do, money comes first. The lower the cost, the better it is for your company. Look at the fees that the payment gateway charges. When choosing a gateway, you will generally encounter three different fees that vary by company: monthly fees, transaction fees, and setup fees.
Some tools will require a membership fee, billed monthly, for letting you use their service, while others will simply charge a flat cut or a percentage of every transaction. Setup fees, while usually small, are a one-time expense you will encounter when initially setting up a payment gateway.
Also Read: Online Payment Solution for Fashion CompaniesSome of those payment companies won’t charge any setup fee but their charges per transaction are higher. The best determinant of this factor is the marginal profit & selling price of your product. If the profit and selling price of your product is high, then you must proceed with those payment gateways which charge one-time setup fee but their fee per transaction is low.
It’s important to plan your budget and company vision before researching fees and charges. Many of the smaller payment gateways do not charge monthly fees, but a more robust system might be better for your business if you expect rapid growth.
#3 Recurring Billing via Payment Gateway
This feature allows you to set up an automatic billing cycle for customers who operate on subscription. Recurring billing is a must for businesses with monthly payment plans. Additionally, non-profits have found utility in recurring billing, as this functionality allows organizations to easily collect funds from repeat contributors.
Also Read: Malaysia Online Payment Methods for Consumers and Merchants#4 Payment Gateway Company Background Check
Please do some background check to the payment gateway company that you are planning to subscribe to. Checking their past records, any blacklists or problems through forums and blogs. Please ask anyone with experiences and ask for their advises; which payment gateway is good?
Being into online selling business, you as a merchant, should expect fast turnaround on any issues that may come up. You must also make sure that your chosen payment gateway provider should have less or zero downtime during their maintenance period. These are very crucial to consider because every downtime can result in loss of your business revenue.
#5 Business Nature Supported by Payment Gateway
Know your nature of business. You have to know whether your company’s business is supported by the payment gateway or not. Usually, most of the payment gateways support all kinds of businesses unless they consider your business high-risk sector business.
Below are few examples of high-risk sectors:
- Gambling
- Adult content
- Tobacco
- Debt collection
- Electronic cigarettes
- Diet programmes
- Credit repair
So, you must check with your payment gateway provider and make sure that they understand the nature of your business very well. This is a very important step.
Also Read: Philippine Payment gateways & E-Wallets for customers and Traders#6 Mobile Payments via Payment Gateway
In the future, consumers believe mobile payments will replace credit card purchases, even in point-of-sale environments. Payment gateways with this functionality allow consumers to transfer money using their mobile device, either with a branded app or a mobile-optimized site. Since this feature is provided through the designated payment gateway, it still holds the same compliance and security standards.
As a start-up owner, it might be easy to dismiss this feature as unnecessary when building your company. However, the inclusion of mobile payments might expose you to a powerful demographic of early adopters in technology. If you choose not to include mobile payments when initially launching your company, consider incorporating this functionality in a future iteration.
| About the Guest Author:
Nabihah Jasri is an intern researcher for a marketing department in a
Fintech company.