How to Choose a Payment Gateway

May 22, 2020

Being a business owner comes with a wide range of challenges and important decisions to make. Now, you’ve come to the point where you need to choose the right payment gateway option for your business. But you don’t know how to make this choice. There are several solutions worth considering, but how are you supposed to know which one is the best for you if you’re not a payment processing expert? Don’t worry – we are here to help you out.

One of the most common e-commerce-related doubts nowadays concerns different gateways and how to decide which one is the safest way to go. You’d also like to find the one that doesn’t incur too high fees and other charges. Let us explain what payment gateway is, to start with, as well as what different solutions there are and what to look for to make sure you choose wisely.

What Is a Payment Gateway?

You can think of it as of an in-between service enabling a smooth and easy e-commerce shopping experience for your customers. When customers enter their credit card information to pay for the product or provided service, your chosen provider processes that purchase. And then they move the money from the customer’s credit card to your merchant account, i.e., your business bank account.

Are Payment Gateways and Processors the Same Thing?

They can be, but they are not necessarily the same. To be able to understand how credit card processing works, you should know that there is a crucial difference between the two. They both do the same job of processing credit card information and sending the needed data to an issuing bank. However, only gateways have the power to authorize the transfer of funds.

How Are Payments Processed Through a Gateway?

The first step is encryption, i.e., securing customers’ sensitive information. The next step is the authorization request through which the processor gets approval to proceed with the transaction. The third step is fulfillment, which means the merchant receives the funds.

Things to Consider When Choosing Between Different Gateways

Choosing the right solution is of great importance for your business, so this is no time for rash choices. Here are some crucial things to take into account before you make the final decision.

Don’t Agree to Provider’s Terms and Conditions Before You Carefully Read Them

Just like you have an agreement with your processing company, you will have certain terms and conditions with your chosen provider. There are quite a few significant details to look for in these stipulations, so always read them carefully before you say you agree. Among other points, look for more information on monthly fees, transaction fees, processing volume requirements, as well as early termination fees.

Compatibility With POS and Shopping Carts Plays an Important Role

When you determine the POS or shopping cart application that you’re going to use, it is important that your chosen gateway is compatible with it.

Think About the Pricing

Just like you can’t get away from credit card processing fees, gateway solutions bring various fees and charges, too. The safest way to think about pricing to avoid paying too much is to consider the total cost of all the processing services you’re planning to use.

Can You Access Reports and Analytics?

You should always go for the provider that offers either a back-end website or back-office application that will allow you to access reports and analytics without much trouble. Speaking of costs, you should be prepared for additional charges for some more in-depth daily reports. However, offering at least basic reporting is a must.

Can You Have Multiple Merchant ID Numbers?

Even though this might not be the case at the moment, at some point in the future, you might need multiple merchant ID numbers for whatever reason. If not that, you might need multiple payment processors. Think about the future and choose the provider that offers multiple options with a single account from the very start.

Choose a Payment Gateway Provider That Offers a Feature for Recurring Payments

Recurring and subscription payment options make it easier for you to charge your customers for any ongoing services provided. So, why would you even consider opting for a provider that will deprive you of that feature?

Insecure Gateways Can Cause Harm to Your Business

Naturally, security is one of the crucial qualities to look for whatever you’re doing online. Low-security gateways are among the main reasons why customers may abandon you. Only consider those providers that adhere to PCI compliance.

Best Payment Gateway Solutions to Consider for Your Business

Choosing the right provider is probably one of the most significant steps when implementing e-commerce payment options. The safest way to go about it is to pick one of the world’s renowned providers, such as PayPal or Stripe, or an upcoming one such as Merchant Chimp.

PayPal

Fraud protection, live support, scalability, extensive cart compatibility, several versions of payment solutions – to name a few of the many reasons why PayPal remains one of the top-recommended solutions.

Stripe

Focusing on mobile e-commerce, platform-based payments, SaaS, and nonprofits, Stripe is another highly popular solution. No matter the volume of your transactions, you can be sure that Stripe can handle it all.

Merchant Chimp

Unlike PayPal and Stripe, Merchant Chimp requires no long-term processing contracts, provides funds on your account the next day as well as a 24/7 customer service for its hardware and software solutions. It also offers the chance to save up 0.4% and more on processing fees.

Summary

If you need any further help with payment gateway solutions or anything else, be sure you turn to a professional merchant service provider. There’s no need to worry about expanding your business with an expert by your side to guide you through every step of the journey.

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