Payment Gateway

Factors to Consider when Choosing a Payment Gateway and Payment Processor

A payment gateway is the last and final stage of the conversion funnel. But what if discrepancies arise when a customer proceeds to pay with a credit card or a debit card? Not all e-payment services are compatible with each other. Your customer might like to make a payment using an HSBC card but is unable to do because you accept cards authorized by some other bank service.

Therefore, it is important to spend some time researching on the different types of service providers available in the market before integrating it into an e-commerce website.

Payment processor and payment gateway are essential features of an effective business website. But it is a vast landscape to talk about, which could get lengthy and time-consuming. The first thing we need to speak about and understand is whether we need either of them.

Both are different regarding their functionalities, and the line between the two have become blurry as of late. However, recently a lot of companies have come up with services that provide access to both. It’s good in one sense now that you do not have to run here and there searching for the best payment gateway and payment processors in the market. You can rely on one brand for both the services.

But both payment services have their differences, which are as follows –

Payment Gateways

Payment gateways are third party tools that retailers use to accept payments from customers online. It’s like a connecting door through which the financial transactions get automatically transferred from the customer to the retailer.

Using payment gateways have some benefits such as PCI compliance, which stands for Payment Card Industry Data Security Standard. According to the PCI, payment gateways need to make sure that all customer information is kept completely secure. The term mainly represents big players like Mastercard, Visa, Amex, Discover, etc.

Other than that, payment gateways also offer the flexibility of payment types, but some things will differ when it comes to payment processors.

Payment Processors

The payment processor acts as an intermediary for processing the transaction. The payment processor is responsible for –

  • Managing the relationship between the business and the credit card companies
  • Managing relevant customer data such as the personal data and the financial data
  • Driving a successful transaction process by crediting your account and debiting the customer
  • Transferring the fund directly to the bank account

Choosing a Payment Gateway and Payment Processor

The process of selecting a payment gateway and a payment processor can be confusing. There are certain things that you need to consider when deciding on a payment gateway and a payment processor. As a merchant/retailer, you will need to think about:

  1. Seamless Process

There are some payment gateways enable direct payment onto a retailer’s website while some payment gateways transfer the customer directly to a different site for entering the payment details.

If you are the merchant/retailer, then it’s entirely up to you to decide where your customers would find it more comfortable. The advantage of having a seamless process is that it prevents the feeling of disruption. Customers are not shuttled to some other website for entering the payment details; they complete their payment on the site from where they had placed the order.

But if the customers feel more confident paying it on a renowned payment gateway provider then the disruption in the process does not matter.

As a merchant/retailer, you are required to consider the comfort factor of your customer when choosing a payment gateway.

  1. Cost of Transaction

Most of the payment gateways come associated with an upfront cost. Nevertheless, some payment processors might charge your customers an additional fee for every order. Customers are also sometimes charged an extra cost for using a payment gateway with no alternative option to depart the transaction.

Therefore, make sure that you keep the value of the transaction in mind when trying to choose a payment gateway to integrate into your e-commerce website.

  1. Matter of Security

Along with the need of being a PCI compliant, payment gateways should be SSL certified and include an additional encryption.

In e-commerce, accepting payments from customers is the end of the funnel conversion. You need to make sure that everything is in place for smooth functioning. Or else, this could add damage your brand reputation and customer trust.

  1. Merchant Account

Having a merchant account is important. That completes the entire payment process channel of a website. But what is a merchant account?

When customers make an online payment via a payment gateway, the money gets transferred to a separate account of the retailer. This is different from the merchant’s actual bank account and is referred to as the merchant account. The money deposited in a merchant’s account has to wait until the payment is approved by the issuing bank of the customer. Once approved, the money is then transferred to the merchant’s account.

This might seem to be an additional task, but payment gateways that don’t require a merchant account and which transfers the money directly to the dealer’s account are more likely to charge you a higher processing fee.

  1. Multiple Taxes

Your payment gateway should be equipped to calculate revenue that is country or region specific.

Apart from the local taxes, merchants should also be aware of the region specific taxes such as the Value Added Tax.

  1. Plugin Compatibility

Not all payment gateways work well with the plugin of your choice. So, make that that the payment gateway you choose is compatible with the plugins that you have at your disposal.

  1. Design

Is the payment gateway that you are choosing, allow for brand personalization? Integrating a payment gateway is not enough. There are other factors that you need to consider when deciding on a payment gateway, such as –

  • Is it mobile responsive?
  • Is it intuitive regarding numbers, layout, pages or number of steps?

Choosing a payment gateway should be part of a customer’s user experience, and you need to make sure that it does not spoil that.

  1. Customer Support

This is an important factor to consider when choosing a payment gateway. Most of the payment services do not provide any customer support. In that case, users have to follow manual instructions to fix a problem. If you want to avoid this, then make sure that your payment gateway offers 24X7 customer support when in need.

Conclusion

The decision to choose a payment gateway and a payment processor for your WordPress website can get very confusing if you are not familiar with the terms or the service. In that case, the best thing would be to decide on a service that you are already familiar with or feel you are comfortable doing business with. Integrate the services to your website page to see if it suits your business or not. You will find out the answer.

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