In an era where online media has become the core of the business world, online payment (payment gateway) is one of the important systems that will allow for easier trading.
If you have a service, product or tool that you would like to market, you promote and create the website to present the product in such a way that it attracts customers. The problem is that your customers can’t buy your products right away and would have to contact you for further steps to make payment. There is a potential of you losing sales due to such inefficiencies, resulting in the client seeking for competitors who already incorporate a more efficient process.
The Meaning of Payment Gateway
Payment gateway is part of an online payment service. It is designed to be processed quickly and securely via credit or debit card and various other payment channels for customers. This is very suitable for eCommerce businesses, enhancing customers’ experience throughout the entire purchase cycle. Currently, there are two major forms of payment gateway, one is directly connected to the bank, and the second connect through various intermediaries.
Classification of Payment Gateway
Typically, most online business owners include two payment paths to give their customers the freedom to select according to the convenience of the customer. We can divide payment gateway service providers normally in two forms as follows:
1. Banking Payment Gateway
Online payment system that are directly connected to the bank will help businesses and their online website to be safer and more reliable. They also have relatively low fees charged for per transaction. In contrary, being connected to the bank will mean a lot more conditions and KYCs to be done.
This method will be suitable for certain company setup for their payment gateway solutions as there are restrictions on the registered capital needed to be involved from the companies.
2. Non-banking Payment gateway
Non-banking payment gateway is an online payment system connected to private service providers. Such service providers could be domestic or foreign companies and is relatively easier to apply compared to the former payment gateway.
Opening an account with such payment providers is not difficult. However, the transactions fees will also be higher as there are more risks involved.
What To Consider When Choosing a Payment Gateway?
Choosing the best payment gateway provider for your eCommerce website is a tedious process. While choosing, you should ensure that customer payment experience is smooth, fast and secure. This helps to increase the trust among the customers and come back for future purchases.
Here are four factors to consider before selecting the payment gateway.
The payment gateway security standards should meet the minimum which involves integrating with 3D secure and complying with the PCI Data Security Standard. This ensures minimum protection against fraudulent or hacking activities.
2. Payout Time
The best payment gateway service providers have reasonable timeframe for the payouts. Ensure to check the payout time frames prior to integration. The average payout could be weekly or bi-weekly, and also varies from company to company.
3. Ease Of Website Integration
Make sure that the payment gateway integration is simple and check whether the customer support is good. Should any issues arise, it should be easily and quickly resolved without troubling the customer support team.
If your business is global, remember to ensure your payment gateway providers support for multi-currency payments, as people around the world use different currencies, you should be ready to accept different currencies with ease.
How to Choose a Payment Gateway that is Suitable for your Business?
If you are just starting to sell online but it’s also a small business with a couple of people involved. Using a bank online payment service might not be a good idea, as the company must be registered and have guaranteed funds to be able to activate it. If your business is new, it would be wiser to use a non-banking payment service provider first as it is free to apply, with functions that could support most payment channels.
Using the non-banking payment gateway is considered suitable for most eCommerce businesses, regardless the scale of the business. Despite some disadvantages such as higher fees, it is believed to still boost profitability for businesses.
It would be optimal for businesses to start selling online and adding more payment gateways for customers. This will allow for faster and more secure transfers. Payment gateway providers will also help protect your financial information, reducing the risk of data theft, assisting to conduct online sales seamlessly.