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Sep 10, 2021

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

When starting an e-commerce business, careful attention must be paid to processing online payments, to meet user needs and maintain a viable cash flow. Knowing your payment options will help you determine the online tools your company requires.

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

You'll need a reliable method of accepting online payments on your website. Selecting a proven payment processor and a payment gateway is a crucial aspect of this journey.

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 verifies, authenticates, and completes the transaction. They may also often provide the credit card infrastructure (software or hardware) you need to accept in-person 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 Gateways

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 transaction 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. However, it does require developer knowledge on how to interact with the API.

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 e-commerce business, keep the following factors in mind:

Your Customers

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

Millennials, for example, may consider cryptocurrencies as a payment method. The ability to pay with cryptocurrency using COINQVEST may be appealing to this demographic. Older audiences, on the other hand, may prefer traditional and familiar payment methods such as credit/debit cards.

To find the best solution for your company, conduct a survey or an in-depth competitor analysis. The results can clue you in to the preferred payment choices made by competitors and their customers.

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

Financial decisions are nearly as important as technical ones. So, before you make a decision, look into every possible option.

Check for any hidden fees or plan restrictions that could sneak up on you or 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 e-commerce company to take. The chosen system must integrate seamlessly with your website or mobile app. However, with so many options, finding the best solution for your company can be a time-consuming and exhausting process.

COINQVEST has done the leg work to get your business up and ready to accept cryptocurrency payments such as BTC, ETH, LTC, XRP, XLM on your site. Sign-up, create your account, and try a demo at COINQVEST.

payment gatewaypayment processorcoinqvestonline payment system
Martin Dominic Banguis Head of Marketing
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