The world of online shopping is a thriving business. Buyers anywhere can shop to their heart’s content while making global payments.
Small businesses are seeing significant gains as they increase their eCommerce solutions and expand to multiple online channels.
According to the latest U.S. Chamber of Commerce stats, SMEs comprise about 99.9% of all U.S. businesses. Even more interesting is that SMEs receive more positive reviews than “trusted” U.S. institutions, says the Pew Research Center.
Statista states that global eCommerce sales reached an estimated $5.8 trillion in 2023. The amount is expected to grow by 39% over the coming years.
Building a trusted brand online takes a solid business strategy and continuous customer engagement. If you’re thinking of transferring your small business to a digital platform, now’s the time to consider which payment gateway to invest in.
This article will discuss the factors to consider when choosing a payment gateway for your small eCommerce business.
What is a Payment Gateway
Let’s first get the basics out of the way. Many eCommerce businesses have a payment gateway integrated into their website to accept payments.
Initially, this technology did enable companies to accept debit or credit card payments. Now, thanks to the innovation that has taken place in the eCommerce landscape, it’s moved beyond that.
With the growing influence of SaaS (Software as a Service) and B2B SaaS (business-to-business Software as a Service), vendors are investing in cloud-based software to increase revenue streams.
Online payment portals differ from in-store payments because they entail application programing interfaces (APIs).
Investopedia says businesses shouldn’t confuse payment gateways with payment processors. A payment gateway collects a customer’s card information and encrypts it for later processing.
Cybersecurity
Payment fraud and data breaches are a constant worry for all businesses. Amex found itself at the center of a major hack.
According to Payments Dive, American Express notified cardholders that their personal information could have been compromised early this year. A third-party service provider “experienced unauthorized access to its system,” allowing hackers to exploit the data of about 1,300 Massachusetts customers.
PayPro Global advises online stores and eCommerce businesses to use state-of-the-art security measures when incorporating a payment gateway.
An excellent payment platform should encrypt and protect sensitive client information during transactions.
It must also comply with international regulations. This fosters a sense of trust with customers, knowing that their data is safe and secured.
Types of Payment Gateways
Payment gateways often include features such as data analytics, fraud prevention and 24-hour support.
Hosted Gateways
Usually hosted by third-party service providers, these gateways are easy to integrate into a business’s current system. Because payment takes place offsite, the biggest disadvantage is that you don’t have as much control over the customer’s experience .
Self-Hosted Gateways
Most SMEs with eCommerce experience choose self-hosted gateways. All transactions are collected on the business’s website, giving them full control of the checkout process.
Companies can leverage the data for a seamless customer experience, from the second they click the “checkout” button to paying for a service or item.
Bank Integration Gateways
Most financial institutions like banks are in line with international regulations and innovations. They’re at the forefront of SaaS applications and software. It’s why some companies connect directly with their local bank’s payment system.
Local bank integration can work in an SME’s favor, especially when targeting clients based in a region where the local bank is a trusted institution.
API-Hosted Gateways
Payment details are collected via an API, ensuring a seamless customer experience. Because checkout is directly linked to a business’s website, you are responsible for how payment works.
If going with this option, you must ensure your business complies with data protection standards.
Customer Support
At its core, a reliable payment gateway should make it easy and simple to process all payments. Having access to customer support is just as important.
Your service provider should ensure a team of experts are on standby to answer your questions. They must provide real-time solutions to your problems.
Before signing a payment gateway contract, make sure they have the addition of chatting with a human instead of dealing with an AI bot. A good service provider has various channels where they can be contacted, including social media and directly via the gateway platform.
Choosing the correct payment gateway for your eCommerce business takes time and thorough research.
Don’t rush into it. Choose the option that is best suited to your business needs. Also, think about transaction fees and the types of payments allowed.
Once you’ve considered all the factors, you are ready to make an informed decision.
