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Sep 10, 2021

What to Consider When Choosing a Payment Gateway for Your Ecommerce Store

When starting an ecommerce business, you should carefully consider how to accept payments online in order to meet user needs and maintain a viable cash flow. Knowing your payment options will help you determine the types of facilities your company will require.

When starting an ecommerce business, you should carefully consider how to accept payments online in order to meet user needs and maintain a viable cash flow. Knowing your payment options will help you determine the types of facilities your company will require.

Cash, credit or debit cards, money orders, checks, online payment gateways like COINQVEST, Stripe, PayPal, and bank transfers are all common payment methods in modern businesses.

You'll need a reliable method of accepting online payments on your website unless you're running a shady side business that only accepts suitcases full of cash. It implies that you must select a payment processor and a payment gateway.

How Online Payment Systems Work

It's not always easy to figure out how payments work or what the difference between a payment processor and a payment gateway is. Let's take a look.

Every credit card transaction involves the following four parties:

  • The customer

  • The merchant

  • The acquiring bank

  • The issuing bank

Every transaction is designed to transfer funds from the issuing bank to the acquiring bank in accordance with the terms of the customer-merchant agreement. All four parts of the payment chain are linked by the payment processor and gateway.

By transmitting data between you, the issuing bank, the merchant, and the acquiring bank, the payment processor completes the transaction. It also usually provides you with the credit card machines and other credit card processing equipment you need to accept credit card payments.

A payment gateway authorizes payments for online stores in a secure manner. This is significant because transmitting transaction data directly from your site to a payment processor is prohibited for security reasons.

Types of Payment Gateway

This is the most important question to answer before deciding on the best Payment Gateway for your company. There are two types of payment gateways:

a. Hosted Gateway

Despite the fact that it is integrated with your website, it redirects users to the payment gateway provider's website or uses iframe elements on your page to input payment information.

One of the major advantages is that you don't have to worry about the transaction's security because the gateway provider is fully responsible for the platform's security and compliance. Hosted payment gateways are also very easy to set up and do not require any customization.

b. Integrated Payment Gateway

The customer does not have to leave your site to make a payment with this type of online payment platform. All interactions take place right on your website. The customer's information is sent to the payment gateway via its API for processing.

As a result, this approach provides a superior user experience as well as a variety of customization options. To ensure a smooth and pleasant experience, you can customize the checkout process to fit your business needs and branding strategy. It's ideal for use on mobile-friendly websites.

How To Choose The Best Payment Gateway

Once you know what options are available, you should conduct a high-level online payment system comparison to find the best option.

When selecting a payment gateway for your ecommerce business, keep the following factors in mind:

Your Customers

Your decision should also take into account your customers' demographics and geographic location. This will help you figure out which payment methods they'll require.

Millennials, for example, will almost certainly cryptocurrencies as a payment method, whereas older audiences prefer traditional methods such as credit/debit cards. The ability to pay with cryptocurrency using COINQVEST may be appealing to some groups.

To find the best solution for your company, conduct a survey or conduct an in-depth competitor analysis.

Business Specifics

First and foremost, ensure that the solution you choose is compatible with all of your target locations (as well as your own country) and has no restrictions on the types of payments, currencies, or accepted cards.

When choosing a payment gateway, keep your product in mind as well. Some of them, for example, have restrictions on the types of services/goods you can sell.

Security

One of the main causes of cart abandonment is a lack of trust and concerns about transaction security. That is why selecting a secure payment gateway for your online store is so important.

As previously stated, you can avoid a security headache by opting for a hosted solution. Regardless, you must ensure that your vendor is trustworthy and concerned about customer data security.

If you plan to sell your products globally, it's also important to double-check your payment provider's GDPR compliance. You may be influenced by the penalties if it does not comply with the regulation.

Fees

Your financial decision is nearly as important as your technical one. So, before you make a decision, look into every possible option.

Check for any hidden fees or plan restrictions that could force you to overspend. Commission/transaction fees are charged by the majority of online payment gateways. Some may also charge a set-up fee as well as monthly or annual subscription fees.

Performance and Reliability

As previously stated, the user experience at the checkout can have a direct impact on your sales. As a result, when considering payment gateway options, processing speed is something you should consider.

The payment gateway you choose should have the least amount of downtime possible.

The success/decline rate is another important factor to consider. Furthermore, there are a variety of reasons why a transaction may be declined – for example, invalid or incorrect credit card information, insufficient funds in the account, suspicious activity, and so on – so the more information your payment gateway vendor can provide, the better.

Make the "Right" Choice

Choosing a payment gateway provider is an important step for any ecommerce company to take. However, with so many options, finding the best solution for your company can be a time-consuming and exhausting process.

Furthermore, the chosen system must integrate seamlessly with your website or mobile app. As a result, seeking professional help in this matter appears to be a wise decision.

Start accepting cryptocurrencies such as BTC, ETH, LTC, XRP, XLM on your site. Sign-up and create your account at COINQVEST.

payment gatewaypayment processorcoinqvestonline payment system
Martin Dominic Banguis Head of Marketing