Many business websites have either product or service offerings and especially for the former, it will be more convenient to set up a payment gateway. Why a payment gateway? With the booming e-commerce trade and many people turning to online shopping especially during the pandemic, it is so crucial to have a payment gateway on your business website.
A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes online credit card or direct payments for online businesses and/ or even brick and mortar businesses. The payment gateway may be provided by a bank or by a third party financial service provider.
A payment gateway facilitates a payment transaction between a merchant and their customers. It sends credit card information from the merchant’s website to the payment processor and returning transaction details back to the customer. The payment gateway is responsible for encryption, request and fulfillment etc within a few seconds, Ultimately, it is used to make the payment process secure and easy for the customer who can just shop whenever they like without the limits of location or operating hours when it comes to payment. Payment is just a few simple clicks away.
Statistics have shown that in June 2020, global e-commerce traffic had a monthly record of 22 billion visits, with exceptionally high demand for daily essentials such as groceries and clothing but also tech items. Driven to an unprecedented high due to the pandemic; how online shopping and the overall future of e-commerce in 2021 and beyond will largely depend on the progression of COVID-19.
If you have not set up a payment gateway on your business website or if you are going to launch a new business website, now is the best time to set up one.
Today, we are going to talk about the types of payment gateways and you can choose the one that is most suited for your business needs.
1. Payment off site
When a customer makes the purchase, the front end checkout will occur on your business website but the payment processing will happen through your payment gateway provider’s back end. There are advantages to handling your payments this way, simplicity being the most of all. However, you won’t be able to control the customer experience and you will be at the mercy of the payment gateway provider’s off site quality and its quirks.
Redirects might include an option for a Paypal payment, meaning upon checking out; the payment gateway will take a customer to the payment gateway provider’s payment page to complete the transaction (processing and payment), it becomes a “Redirect”. This is extremely useful for small businesses which has the advantage of simplicity, convenience and security of a widely recognized platform like Paypal but the process also means less control for the merchant and an extra step for the customer through the shopping experience.
3. On site payment
This is usually used by large companies, handled on their own servers. The checkout and payment process all go through your system. You will have more control over the customer experience but also more responsibility. Retail carts have an abandonment rate of 75% so every variable counts to meeting the bottom line. It means you need to be on a constant lookout to check the analytics and see there is anything you can do to improve the customer experience or reduce the cart abandonment rate. This is especially important for companies who work with a large volume of sales every day.
These are the common payment gateway types used for businesses. You must be thinking “But which payment gateway should I choose?” Fret not, my friend. We got you covered too!
Here are the top 3 payment gateway options:
1. Amazon Pay
Amazon, like Paypal, is also a widely recognized platform which has 300+ million customer accounts worldwide. This makes it very attractive as a trusted payment gateway provider option and it comes with a number of plugins, including some for use with BigCommerce. A big advantage is that whoever has an Amazon account can use Amazon Pay to make payment for online transactions without needing to create a new account or key in credit card information. Current processing fees are 2.9% on domestic transactions with an additional $0.30 per transaction. International fees escalate to 3.9%.
Paypal is popular as a redirect payment gateway provider because it is widely recognized worldwide which means many customers trust this provider a lot. They have two options: a $0 per month checkout payment gateway hosted by PayPal, or a $25 per month option with more checkout customization features. Whichever option you choose, Paypal adds fraud protection security without any additional charge. This gives you the assurance that your payment gateway is safe. Current processing fees are 2.9% with an additional $0.30 per transaction.
Stripe is a popular payment gateway provider with broad focus on various payments: mobile e-commerce, non-profit, software as a service (SaaS) and platform-based payments. It is also capable of handling companies who deal with a large volume of sales transactions. In addition, Stripe can be used as a standalone solution for businesses who need to send out invoices and collect payments for products or services. Processing fees are currently 2.9% and $0.30 per transaction.
We hope you are ready to get started on setting up at least 2 payment gateways on your website, making it hassle free and giving more options for customers during payment and for yourself in terms of tracking where traditional payment methods are used.
Last but not least, we advise you to always use established payment gateway providers like those mentioned above so that the customer experience is enjoyable from start to finish and this will add on to your business credibility and branding in the long run.