It is very obvious that if you are reading this article, you in the process of setting up some online business or online store and to receive the money you need to have to integrate it with a payment gateway. Now a days lot of Payment gateways are there, and when choices are numerous, it becomes difficult to select the right one.
Choosing a right payment gateway is extremely important. Receiving money from your customers through the internet should not be a nightmare. If you choose the right gateway, it will not only enhance your customer experience but you will also be freed up from the tensions. Hence, it requires due diligence, research and should be compatible with the technologies used on your website.
It is neither very easy to choose a best-fit Payment Gateway, nor is so difficult if you follow some easy tips for identification. The following steps may help you narrow down the search for the Best suited Payment Gateway.
But before proceeding, you should understand what is a payment gateway and how it works. Precisely, it is a computer application which securely helps you get money from your customer regarding a specific order. Following steps are performed –
- It verifies billing information of an individual customer
- For each customer, it verifies the payment method for funds
- It approves the request and allow the business to issue a transaction confirmation number
- And ultimately, get you paid for the desired amount
Now, comes which payment gateway is suitable for you. Here we need to judge based on various parameters –
1.Type of payment gateways – Classic and Modern
The “Classic” gateways require you to get a merchant account opened up with the bank where the amount is credited. But, with the advent of technology, there are several “Modern” gateways, which doesn’t require such account. They can draw directly from your customer’s credit card or bank account and deposit in your account directly after validating. It is but obvious that Modern payment gateways are costlier.
Few of the modern gateways include Paypal, Stripe, etc. Integrating Modern gateways is far more easy process and generally, you don’t need anything special to set it up. However, you end up paying high transaction fee per transaction compared to classic gateways and secondly they take you out for the transaction from your website which might result in a reduction in conversion. So, if you are a small business or store where larger per – transaction fee is not issue you may go for it.
But being a bigger business or store, where per transaction fee piles up, it is always advised to go to classic gateways. Classic gateway is integrated through APIs and a merchant account. This complete process takes time of few days for money transaction compared to modern gateways.
2.Place of incorporation and operation
This is an important question under consideration, there are for example few European gateways, few US-based and similarly for other countries. So, if you are US based company you should go for the US-based payment gateway. But, if you are US based company operating in Europe, then you should choose European gateway. And, if you are providing services in multiple places, then you should choose a gateway which is supported in multiple countries.
3.Local or Global – The Reach
It is an important consideration, if you are working locally and major inflows are from local cards and transfers, then a local provider should be considered.
Generally Global providers come with variety of features viz. variety of cards, multiple currencies, global reach, alternative payment options, settlement currencies, etc. So if you are operating globally, then this is a better fit but per transaction fee is higher in this case.
4.Safety and Security of your Customer’s money
Getting through the payment gateway, you are exposing your customers to a third party, so make sure gateways are secure enough and should take care of the safety of your customers. Different platforms provide different features e.g. 3D Secure, Verified by Visa, OTP, Token System, Fraud Protection Tools, Card storing, etc. So, before finalizing, this should be verified.
5.Multiple Payment Gateways
It is said that one should not keep all the eggs in the same basket. Similarly, identify your target audience, their geographic locations and select whether you want to have one or more providers, maybe one for national and other for international. The higher limit is not defined, but it is advisable to have maximum three gateways in one website.
Besides this, there are several other factors like what is the support model, how much is the fee they are charging while transferring the amount, how comfortable you are with the product, etc. There is no universal law, and it is your meticulous judgement which will help you get the best-fit Payment Gateway Solution.