Last updated on April 13th, 2022 at 09:44 am.
How to choose the perfect payment getway for your online business? Anyone who shops online look for a better, hassle-free and smooth service. Therefore, for any online business, whether it is for selling any product or service, user experience is the most important factor to consider for the business owners. Typically, it is seen that most people find that the payment factor is cumbersome.
Therefore, if you want to make your online store a favorite one then you should choose the right payment gateway. A good payment gateway will not only enable payments but will also make it safe.
Accepting payments from the customers for their purchases is not an easy matter where you simply flip a switch and see the money flowing in. However, making it safe does not mean it has to be complicated either. All you need to do is find the right payment gateway for your online business that is easy for the customers to pay for the products.
It will take a little time and effort to choose the right payment gateway but there are ways in which you can make it simpler and narrow down your search options.
Choose The Right Payment Gateway For Your Online Business
About payment gateway
First, you will need to know about payment gateway and how it works and why you need it to be good and most effective. A payment gateway is an app that is used by online stores to securely request payments for the customers for their purchases.
The payment gateway will follow a few specific steps as and when a customer clicks on “order.” These steps include:
- Verifying the billing info of each customer
- Verifying the funds and payment method of each customer
- Approving the requests made
- Allowing you to issue a number as confirmation of the payment and most importantly
- It eventually gets you paid.
That is all about ‘why’ and ‘how’ and now it is time to know about ‘which’ to find out the best-suited payment gateway for your online business.
Payment geteway for your online business: Modern or Classic
You can choose between a classic and a modern payment gateway. Over the years, all payment gateways have evolved and have come a long way.
- The classic payment apps allow online businesses to apply for a merchant account. This is a special bank account which receives the credit card payments directly. Unless you have such a merchant account, the payment gateway will be unable to transfer the money into your specific bank account.
- However, there are several modern payment gateways that may not need such a merchant account at all. These special payment gateways will draw the requested funds directly from the bank account or credit card of your customers, validate everything and then deposit the fund into your bank account. That means, to use a modern payment gateway you will only need a valid bank account for your online business.
The modern apps are definitely growing in number because these are easy to set up. You can integrate these with your online store very quickly and do not even need to change the bank account to get up and running. However, the modern payment gateways carry higher fees such as all variations of PayPal and Stripe.
Considerations to make
You will, therefore, need to consider the pros and cons of each payment gateway, classic and modern, and then choose the most suitable one for your business just like you will need to consider all available options to get debt relief and the pros and cons of each.
There is another downside of the modern ones apart from that it charges higher per-transaction fees in comparison to the classic gateways. These usually send the customers off-site to make their payment. This can work adversely as this can reduce the conversions for some specific type of stores.
However, the fees are something that you should really focus on. Initially, if you are a small store these fees may not seem to be a big deal for you but as your store grows and you need to process more payments, these fees can add up to become a large amount very quickly.
If you consider the classic payment gateways there are a few things that you should keep on mind before you finally decide to use it for your business.
- These apps mean more hassles and time in setting these up though these are considered to be a much better app for the bigger stores.
- You will often need to have at least minimum technical knowledge to use these as it is integrated through API.
- You will also need to have a merchant account to make it work. However, merchant accounts are not offered by all banks thereby restricting the options for your customers.
- It also takes a long time to set up such a merchant account as the approval time may vary from one bank to another and often need 4 to 6 weeks for the setup process to be completed.
However, all these hassles are worth it because the per-transaction fees for classic gateways are usually lower than the modern ones.
Therefore, make sure you consider the amount you will pay in the long run and not the immediate benefit. Remember, you can always switch to a modern payment gateway in the future if you need through that will once again come with its own set of considerations.
Hosted and integrated gateways
Lastly, consider whether you want payment gateways that can be integrated into your store or hosted off-site.
- As for hosted payment gateways, the biggest advantage is that the offsite provider will be responsible for the data security and PCI compliance requirements but make sure that you find a reliable and trusted offsite payment processor. However, these are easy to set up and good for new stores.
- Integrated payment gateways, on the other hand, use the API provided to connect to your business website meaning the customer will not have to leave your store to submit orders or to input payment information.
Therefore, make sure you choose a payment gateway for your online business that is smooth and provides a seamless experience. It must abide by the PCI Security Standards.
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