With the millennial population driving the disruption in online shopping, business mindsets are changing and rapidly shifting to upcoming mobile technologies to generate more sales and profits.
As a result, integrating the right payment gateway to your online store has become a vital conversion component that impacts the consumer buying cycle.
As per a recent study, 50% of online shoppers would cancel their purchase if their preferred payment method isn’t offered, with GenZ (ages 18-24) being twice more likely to buy online.
Given this scenario, what’s the right approach to choosing the best payment gateway for your online business?
You need to start with identifying your business needs, your geography of operation, your existing technology components and your larger business goals. Once these variables are identified, you can then choose the payment gateway which best suits your needs.
The infographic below will help you understand the parameters which need your attention before you integrate the payment gateway with your online store and will help you zero down on the gateway which would be a right fit for your business.
What is a Payment Gateway?
Consider a bidirectional virtual gate. This gate is a service capable of connecting your store to a payment processor or bank to accept your customer payments. In technical terms, this gateway validates your customer’s transaction credentials securely for web/mobile payments.
What are the types of Payment Gateways?
Broadly, there are two main types:
1. Hosted Payment Gateways:
A hosted payment gateway redirects the customer to the host network for transactions.
What is its benefit?
- Integration is hassle-free and easier.
- Stores do not have to worry much about ensuring transaction security to the customer. It is the responsibility of the host network to manage secure transactions and payment processing.
What are the challenges involved?
- Major bottleneck of integrating this payment gateway type in your architecture is compromising on the control of the interface and interaction experience of the customer.
- This is certainly not favorable for transactions through mobile. Hosted sites take higher loading times thus not favoring mobile phone payments.
2. Integrated Payment Gateways:
An integrated payment gateway makes an API call from your site. So the customer is not redirected to the host.
What is its benefit?
- Their flexibility in terms of UI/UX control to the retailers and online businesses outweighs the former.
- Faster API calls promote mobile friendliness.
What are the challenges involved?
- While hosted gateways are maintained by the host payment gateway provider, integrated ones require ongoing security support and maintenance by the ecommerce development team.
These are the questions to ponder upon before taking a step further:
1. Does the payment gateway match your business requirements?
How many currencies does it support? Does it have a significant consumer base in your target demography? In which countries does it operate?
2. How much will it cost to set up a payment gateway for your store?
It is important to keep the numbers in mind. Analyze how much are you ready to invest in the setup and the fixed fee paid per transaction. A hefty amount and high chargebacks for a small business is not at all financially feasible.
3. How secure is the payment gateway for your business?
4. How does integrating a payment gateway impact overall UI/UX of your platform?
Lesser the hops, screens to buying a product, more the customer satisfaction. Make sure the payment gateway does not affect the existing design and architecture of your store.
5. What is the overall performance of the payment gateway?
If a payment gateway is more often declining transactions due to a variety of reasons and still costing you a sale, then you might want to re-consider on choosing it. According to Spreedly, it is important to know whether your chosen payment gateway is good enough by comparing the processing speeds, success and decline transaction percentages that might have a noticeable impact on your business.
6. What is the support channel of the payment gateway provider?
Developing a sense of trust is important in case you are planning to integrate the right payment solution. What is the kind of support, how long do the people at your preferred payment gateway take to respond to queries and what is the issue tracking cycle they maintain need to be considered before you make your choice.
Here’s the list of the popular payment gateways dominating the U.S market:
10. Payline Data
Comparing the top 5 payment gateway providers:
The comparison chart of the best payment gateway providers gives clear indications on which is the cheapest payment gateway and differentiates them on the basis of currencies and payment methods supported.
With PayPal supporting almost the major countries and currencies of the world, it is still a gold digger in this industry along with Braintree coming up with Bitcoin, Android Pay and Apple Pay technologies.
Not to forget – Data leaks, Chargebacks, ID Thefts, Technical Glitches are an obstacle for your store’s success. How robust and secure your payment gateway is should also affect your choice.
This infographic aims to help you take an informed decision as we at Kays Harbor understand that a major strategic shift has fueled the payments industry leading to the overall transformation of payments processing and that is making ecommerce more competitive.