How to choose a payment gateway provider?
The eCommerce payment realm is rapidly growing owing to the tremendous development of the online payment sphere. Merchants also play a significant role, with the willingness to offer modern solutions to simplify payments around the web.
The importance of payment provider for business
The choice of a payment provider for any type of business is one of the key points that the merchant should pay attention to when setting up a system to accept payments.
When you start managing a business, the awareness of the importance of the right chosen payment system is optimal for your business, is becoming increasingly clear.
Payment providers are an integral part of the eCommerce payment flow process, and they play a key role in providing reliable and secure channels for transferring funds between all participants in the process.
Payment gateways provided by payment providing systems serve as an online version of a payment terminal and interface processor for various needs, platforms, and devices. They often provide comprehensive services that include payment management, monitoring, and recording data, detect and prevent fraud.
What factors to consider when choosing a payment provider?
1. Targeting locations and payment methods
There are plenty of payment methods worldwide. They vary from typical credit or debit card transactions to online banking, mobile wallets, crypto payments, payments via SMS, etc. For each region, there are some available payment methods. The choice of a payment gateway provider should start with understanding targeting markets and preferred payment methods.
Also, the process of how money is withdrawn occurs is also important.
For example, African countries, due to high criminal activity, avoid cash, and prefer payments via SMS. European countries, the USA, Canada, and some of the most developed Asian regions use bank transfers.
Consequently, each country has its own preferred method of online payments and merchants should find out whether a payment gateway provider covers these countries or not.
2. The security of online payments
It’s no secret that protecting your account from hacking and other types of fraud is the most challenging task to ensure the smooth operation of the system and the business as a whole. Based on the data of the European Online Payment Fraud & Security Report, 2019, the volume of losses from online payment fraud is growing worldwide. According to analysts, by 2023, these losses will more than double compared to 2018. In Europe, online retailers in the two largest e-commerce markets, the UK and Germany, have reported a growing number of fraud attempts. In the UK personally, more than half of all losses from credit card transaction fraud are related to eCommerce. Therefore, customer security is a decisive factor, and, according to the polls in this report, many will not shop in the online store, which, in their opinion, does not provide an optimal level of payment security.
How do payment providers ensure payment security?
- First of all, it is a well-known PCI DSS (Payment Card Industry Data Security Standard) protocol. The organization offers security recommendations, various processes that are aimed to protect payment systems and prevent the theft of data from cardholders. Besides, not only payment providers, but also all parties involved in the process are subject to these rules.
- 3D-secure technology. This solution allows you to maximize the security of payment transactions through online resources. 3D-secure technology provides an additional level of verification when paying for purchases and services on the Internet. The client receives an SMS message with a one-time confirmation code, through which users are authorized.
- Among other things, many payment providers are developing their integrated systems for the timely detection and blocking any fraudulent transactions. Also, some companies, such as PayOp, have a team of specialists who solve issues related to chargebacks. Usually, banks take the customer’s side, and to prove that the mistake was not made by a merchant is a rather laborious and long process, therefore such providers will help to save your time and money.
3. Various integration methods
The choice of integration method is also a very important point when choosing a payment system for the site. There are 2 types of integration: built-in and external.
The built-in integration includes the API – a comparatively difficult to install, but easier to customize. With this model, you can change and customize the payment page as you wish. This type of integration is suitable for large companies that need complex algorithms for processing received data.
External methods include all sorts of methods in which the payment page of a processing platform is used, whether it be a virtual terminal, plugins, or a “buy” button. Moreover, all responsibility for the rules and regulations compliance lies in the company that provides this solution. Users could often encounter this type of integration when making a payment on the site, they are redirected to an external payment page. At the same time, you cannot customize the design of such a page.
4. Payment processing fees and charges
When choosing a payment provider, you should pay attention to the fees as well. For different types of business, they may vary. Several additional, hidden charges may also take place.
- Transaction fee.
It is a payment agreement that determines that the merchant pays a certain amount from each transaction to cover the cost of the processor and other parties involved(payment systems, banks). Such payment model is most often expressed as a percentage equivalent.
- Fixed fee.
Regardless of the sales volume of your business, you must pay a fixed price for processor services. A fee for using a payment gateway may be also included.
- Fraud transaction fee.
In case of mistaken or fraudulent debit, the client may apply to the issuing bank and ask for a refund. As we wrote above, the bank almost always takes the client’s side, so the money will be returned and the merchant will have to pay a small “fine”.
- Chargeback Fee
Chargeback occurs when the merchant refuses to refund money. At the same time, the bank needs to audit the transaction, for which they charge a certain fee (approximately $ 15-20 for each case).
- Interchange fee
The commission that takes place inside financial institutions that are involved in servicing bank cards.
5. Technical support
Customer service often lies at the core of a business, whose goal is to provide exceptional service that makes customers feel valuable and respected. Although the provision of an excellent service may require additional resources, time and money, if the payment gateway provider has an educated customer support team, this will allow it to stand out among competitors, maintain a positive reputation among future customers and encourage existing customers to resort to the services of this company again.
Most Popular Online Payment Gateways
If you’ve been picking up options for gateway integration, then you must’ve heard these names. These companies move millions of dollars around the globe each year – yet, the paradox is that small companies rarely find their optimal service providers from the names in this list.
Authorize.net has been on the market since 1996, and (what a coincidence) the interface of the service hasn’t changed from the foundation of the company. It is the option numerous sources present as “optimal”, yet, by all means, your experience with this website payment gateway wouldn’t be as bright as described.
From the conducted research, it’s easy to divide into parts the most common pretenses to the service. Users complain about the security and share their concerns about the identity verification the service provides (or, better said, about whether the verification is present at all.)
For example, merchants leave numerous messages about the fact that their customers have to enter their credit card data at least twice so that the payment will be processed. This, of course, leads to a great number of abandoned shopping carts. More to that, whenever Authorize.net feels like blocking merchant’s account, it does that immediately, without warnings, notifications, and refunds to customers who bought the product and won’t receive it.
Another potentially dangerous accusation is that Authorize.net doesn’t verify POST requests – which practically means that any user can use the breach to acquire your goods without actually paying for them.
What makes the situation even worse is the fact that such complaints are left unresponded by the company. Multiplied on an uncompetitive high price, leisured support team, and basic features available only in the Premium account (like email notifications or a possibility to submit refunds) lead to the conclusion that choosing Authorize.net as your first and primary payment gateway integration wouldn’t be that wise.
Despite the cooperation with such popular brands as BitDefender and Hewlett-Packard, 2Chechout payment gateway for websites uses a poor reputation among merchants. It is known for the inconsistent demands to new companies – you can submit tons of legit documents proving your identity and your ownership on the company, yet, you might still not be allowed to use the service.
However, this is probably the best scenario, because the stories from businessmen who used to be the clients of the service are low-key terrifying. Your account can be frozen with no explanations, the demands the tech support sets must be fulfilled immediately, and in case you don’t respond to the support instantly, you risk to receive a permanent ban.
Aside from the terrible support, the 2Checkout payment gateway application abounds with bugs. There are numerous reports stating that merchants have trouble logging in their accounts – and, of course, such cases aren’t handled by the support team properly.
Among the popular payment gateways, 2Checkout is probably the best example of how behind a neat frontage hides an ugly attitude towards clients that aren’t multimillion companies.
Being a relatively young company, Adyen has already received a great success – it recently became widely known that eBay stops its lifetime-long cooperation with PayPal and starts a partnership with Adyen from 2020.
It might seem like the acknowledgment from such a market titan as eBay means that Adyen is a hands-down winner among online payment gateways. However, its ex-customers tell the opposite: slow and incompetent assistance is a common thing if you’re the owner of a small business, which apparently isn’t valuable to a company that cooperates with Uber and Microsoft.
More to that, the service expects to be paid for the most basic functional you can possibly think – email notifications. This leads to merchants’ money being charged, frozen, withdrawn without him knowing, in case he didn’t want to pay extra cash for the basic payment gateway feature.
Of course, compared to 2Checkout, Adyen doesn’t seem like that bad option. Still, ask yourself: do you want to agree to mediocre support and service, especially if you and your business can do better?
This Ukrainian payment gateway outstands from all the listed companies because of how it treats its customers. They often block ordinary transactions and mark them as suspicious. While such a situation is typical for companies that follow strict anti-fraud policy, Paymentwall’s following communication with the users goes out of the customaries.
Incompetent and slow responses appear to be normal for Paymentwall. Still, even worse are the cases where the company ignores people whose money was frozen, so they don’t receive either the purchased product or a refund. Of course, all the annoyance from such a poor service will damage your shop’s reputation.
From the merchant’s point of view, the system of registration for the service is so slow and complex that a regular procedure that fits in 3 hours if working with PayOp takes up to 1 month if deciding to cooperate with Paymentwall. You’ll have to submit dozens of sensitive documents, yet it still doesn’t guarantee that you will be allowed to use the service.
Choosing a payment gateway for a business website is not a difficult task if you know all the points to consider. As soon as you connect the payment platform to your website, you will immediately improve the quality of customer service and conversion.
All you need to do is look through the factors, we’ve mentioned above, before choosing and implementing the right payment gateway.
PayOp has been providing reliable solutions for all types of businesses for over 10 years. We have over 300 payment methods worldwide. Besides, the integration of our payment system usually takes only 1 business day.
If you want to get acquainted with the PayOp payment system, you can register an account and get access to all the necessary functions.