When choosing a payment gateway for your business, you should pay attention to multiple parameters. From this article, you will get to know how to detect a perfect gateway for your company.
A payment gateway is a merchant service that your business utilizes to authorize credit card transactions. When a client enters their credit card information on your website, this data is sent to the gateway. From there, it is furthered to an attaining bank and to the delivering credit card company. The issuing company will inform you whether or not the credit is available. If it is, the transaction will be processed. The choice of payment gateways on the market is very vast. From this article, you will get to know how to choose the most functional and reliable one.
The Peculiarities of Payment Flow
First, you should get to know about average transaction amounts and frequency. Normally, the service provider will offer you several packages to choose from. If you exceed the limits of your package, you will need to pay extra for each excessive transaction.
Second, you need to decide how you are planning to receive the payments: 100% online or as a mix of online and offline in-person transactions. The gateway’s fees will depend on that. Some providers offer set-up fees. Others create transaction fees if the transaction volume is not met. Plus, you might need to pay a fee if the order that was expected when the service was created was not met.
Third, your payment gateway should be able to scale together with your business.
Finally, you should pick one of the three methods of processing the payments.
- An escrow system. The platform will withhold the funds until the administrator approves the transaction.
- Redirect for payments or iFrame. The system will redirect customers to a protected hosted payment page. Alternatively, it can retain their information on an embedded iFrame on your site. If you ask your developers’ opinion, they will be likely to opt for this approach because it is very easy to integrate.
- An integrated payment form. Compared to the previous method, it will take you a bit more time and effort to add this solution to your site. Payment details will be sent to a secure payment gateway. There will be a form on your site that will contain all the necessary information. It will pass the data to the gateway provider by calling an integrated API.
For newbies, it might be tricky to understand from the onset which amount of transactions they need. You might not be able to decide between escrow or an integrated payment form before you try them both. In this case, you should opt for a provider that offers maximum flexibility and will not charge you large fees for switching from one model to another.
For legislative reasons, your payment gateway should be registered in the same region or country as your business. For instance, if your company is registered in the US, you need an American service provider. If you are registered in Europe — then, your service provider should be located in the E.U.
Security and Anti-Fraud Tools
These are a few examples of fraud attempts that you might face.
- A customer will receive the goods that you sent them — but will tell you that they failed to get them. In such a situation, most businesses will refund the purchase (because it will be cheaper than carrying out an investigation) or send to the customer a second identical product. You will not lose much money on such a case if it happens only once. But if the story repeats, your losses will keep growing.
- Someone would try to pay for the purchase with a hacked credit card. In this case, you might need to return the cost of the purchase to the legal owner of the card. You might need to pay additional fees for that. If such situations repeat frequently, your business would be considered high risk. Your card processing company would increase your fees — and one day, you might lose your merchant account.
To avoid such troubles, you should select a gateway that relies on the latest data security tools and employs fraud management instruments. The mission of all these solutions is to detect fraud before it affects your payments. Advanced service providers use tokenization and point-to-point encryption. The term “tokenization” means that the customer’s credit card data is entirely removed from the system.
The more processes your service provider automates, the better. Your business will be less dependent on the human factor and there will be fewer errors.
Supported Business Models
If you sell books or clothes, most service providers will be ready to collaborate with you. But certain industries belong to the high-risk category — these are a few examples.
- Sports betting
- 18+ entertainment
Some service providers share lists of industries that they do not collaborate with on their sites. Anyway, try to get in touch with the representatives of the company to discuss whether they would be ready to work with you. Payment gateways that handle high-risk businesses provide more advanced security solutions.
Some service providers do not offer any support at all. They just send their clients comprehensive manuals on how to fix any upcoming issues. More customer-oriented providers have support teams that process clients’ queries within working hours. Yet the best option would be to find a provider whose support managers are available 24/7. You should be able to reach them at least by email. If moderators can answer you by phone or in a live chat, that would be great.
When selecting a payment gateway for your business, you need to think about your expenses and your customers’ comfort. You should select between payment processing services that operate in your area, offer high-quality customer support, and are ready to collaborate with businesses from your industry. The service provider should use advanced anti-fraud tools and be able to scale the gateway as your business grows. Hopefully, the information from this article came in handy and you will find an ideal gateway for your company.