E-commerce Payment Gateway
A best payment gateway is a merchant service which provided by an e-commerce application service provider which allows to authorizes credit card or direct payments processing for online or e-businesses, retail shops, bricks and clicks or traditional bricks and mortar. The payment gate way can be provided by a bank as well as a specialised financial instituition as a separate service like a payment service provider.
E-commerce payment gateway: Working and insight
The main objective of a payment gateway is to make transfer of funds effective, secure, and hassle-free. The best payment gateway is never involved in transmitting payments, instead it approves the funds transferred to the seller and does so safely and securely for the buyer.
There are 9 simple steps involved in this process, today we’ll look deep into the process and understand the safe, quick, and secure working of the gateways.
Step 1. The process begins when the customer places an order on an eCommerce website and enters his card details.
Step 2. The web browser encodes the data sent between it and the merchants’ web server.
Step 3. After that, the gateway sends the transaction details to the payment processor that is used by the merchant’s acquiring bank.
Step 4. This payment processor then sends the transaction data to a card affiliation.
Step 5. The card issuing bank acknowledges the request of the transaction, and then either ‘APPROVES’ or ‘DENIES’ the transaction.
Step 6. The processor then forwards an approval request related to the merchant and customer to the gateway.
Step 7. When the gateway acquires this reaction, it transmits it to the interface to process the payment.
Step 8. Command called ‘Clearing Transactions’ is activated once the merchant has completed the transaction.
Step 9. The issuing bank changes the command of “auth-hold” to a debit, permitting a “settlement” with the vendors’ securing bank.
Essential factors to keep in mind, while choosing a payment gateway:
# Choose an appropriate flow of the gateway:
With time as the enterprise grows, the gateway you have chosen must also be adapative to the increase flow of transaction, hence retailers must select the most apt payment gateway to add it on the website.
# Chose the right product:
A gateway provider is needed on every website which is selling products or services online. It allows the customers to buy a product/service, and the owner receives the payment hassle-free and safely. While choosing the payment gateway provider, the owner must keep in mind the adapatibilty and security of the payment solution.
# Customers feeling of safety and security:
All the big companies care more for their reputation over the commerce factor, hence the owner shall make sure to keep the data and sensitive details that the customer is sharing with them on the website intact. This will build the trust between the customer and the company and would attract more customers to your company.
# Transactional Efficacy:
In a research it is seen that around a quater of customers will quit the purchase if they are compelled to register for an account to complete the purchase. Hence, the owner shall chooses a gateway which uses a third party shopping cart with an enrollment procedure built into the the cart, therefore there must be an option for ‘Guest’ checkout, which will flourish his business.
* Checkout: easy and convinent on all the devices
According to a research, out of all the shopping done in online mode, 79% is done using a smart phone in past half a year. Reports also suggest, that 62.24% of the people possess a smart phone and use it for online shopping.Hence, as website owners explores for an payment gateway options, they must make sure that the choice of their payment gateway must provide an adaptable checkout experience optimized for different mobile devices and network types.
* Mobile Payments:
As we all know, these days everyone feels more easy and safe to pay through the mobile phone with either the UPI or mobile wallet over cards or cash, hence the gateway chosen shall be open for all the options of payment, which inreturn would boost the business, without stagnating the process at the checkout step.
* Recurring payments:
Recurring payment option helps the company to set up a monthly option for autopayment without any hassle, many services based companies like Netflix, Amazon Prime etc use the same model. This model is convinent for both the service provider and the customer as the company gets a monthly for the services given, and for the customers monthly payment is much less as compared to an anaual payment.
* Integrated process:
Select a best payment gateway system that doesn’t botch up the website’s UX with a slow payment process.
Choose a payment gateway that makes it easy and beneficial for the customers to make payments on the website, where the customers can select a payment method of their choice. Most payment gateways give detailed instructions on integrating into a popular ecommerce platforms.
* 24×7 Customer Support:
In most of the payment gateway services, there is only email or ticket support. This actually frustrates the customer as they have to read the manual and fix the problem themselves, which is not easy for all. Hence, the owner shall look for a gateway which provides live customer support, atleast within standard working hours, if not 24×7.
Top 4 ecommerce payment gateways (2022):
While exploring for eCommerce payment gateways, we must not only choose the most famous but also keep in mind that the gateway is reliable and trustworthy. With the high frequency of cyber attacks like hacking, data/identity theft, scams and phishing attacks, the owner should go for a safe and secure payment gateway for his company.
Some of the top ecommerce payment gateways which are worth looking into are:
1. PayPal:
If you’ve spent time online in any capacity, you have most probably heard of PayPal at some point or another. PayPal is a leading payment gateway that was launched and established in 2002.
Ever since then, PayPal has positively grown and expanded and is now available in 203 countries.
PayPal is one of the safest and most secured payment gateways, which is why it is preferred by so many, individuals and corporations.
Advantages of Using PayPal
* No monthly fees to be paid.
* No fee to open a PayPal account.
* Secure and encrypted solution, hence no worries.
Disadvantages of using PayPal
* Transaction fee, above than average.
* Frustratingly lack of customer support.
* Lack of transparency can aggravate (in case your account is flagged or blocked for any reason)
Some of the top ecommerce payment gateways which are worth looking into are:
2. Stripe:
Stripe is a newer and close competitor to PayPal that quickly gained popularity because it accept payments using cryptocurrencies such as Bitcoin. With Stripe, it is possible to get started with accepting payments online right away, as Stripe offers a free trial period to all new customers, which makes it both easy and quick, which its customers very much like about it.
Advantages of using Stripe:
* Free trail period available.
* Supports various currencies (24 to be exact)
* Also accepts cryptocurrencies.
* Customized libraries available.
Disadvantages of using Stripe:
* Geographical restrictions.
* More expensive than its alternatives.
* UI not much user-friendly.
3. Apple Pay:
The leading available touchless payment system available in todays date is Apple pay. Known for its compatibility with Apple devices both in-person and online with an eCommerce store. It is simple, straightforward and works with a single tap. All the cards like Visa, Mastercard, American express etc can also be used with a touchless Apple Pay gateway.
Advantages of using Apple Pay:
* Touchless payment system.
* Completely free for customers (without additional fee).
* Accessable to millions of Apple users and subscribers.
Disadvantages of using Apple Pay:
* Can limit access, hence you have to depend on other gateways.
* Exclusively available to Apple users.
