Running a successful business in the Middle East largely depends on how smooth, seamless, safe, and efficient you can make your customer’s experience. And offering payment flexibility can go a long way in ensuring the same. By allowing shoppers to make installment payments, you can improve their satisfaction while securing your own revenue. In fact, the buy now pay later (BNPL) model is gaining increasing popularity in the region due to a surge in ecommerce and the widespread usage of mobile devices for payments and banking. In KSA and UAE, internet penetration is close to 100%.

Moreover, according to a Deloitte report, since BNPL complies with Sharia law, Middle Eastern consumers are more comfortable about adopting it vis-à-vis credit cards. By 2028, the total addressable market for BNPL is likely to reach USD 3 billion in KSA. So, the time is right for you to grow your venture through payment flexibility. The following write-up explores the advantages of paying in installments for consumers as well as business owners like you.

Why Customers want to Pay in Installments

Listed here are the key benefits of installment payments for consumers:

• Easy Budgeting – Being able to pay in installments allows customers to manage their monthly budget better. They can spend on what they want without having to compromise on rent, essentials, or utility bills. This is particularly helpful for young shoppers, homemakers, or those who have retired.
• Saving for Emergencies – Installment payments allow consumers to protect their cash reserves and avoid exhausting everything in one go. This means, they can always set aside some money for rainy days or unforeseen events.
• Buying Premium Items – Paying in installments gives customers the power to own limited edition or expensive items that they would have foregone if they had to pay in full at once. By spreading out the total amount over several months, it becomes easy to afford designer clothes, jewelry, accessories, sophisticated gadgets, and more.
• Flexibility – With an installment or BNPL model, paying in incremental amounts is another benefit. Hence, if their situation permits (for example, if they receive a bonus at work or earn good returns on an investment), customers can pay off more with each installment and become debt-free fast.

Benefits of Installment Payment Plans for Merchants

By offering consumers installment payment flexibility, you can benefit in the following ways:

• Better Shopping Experience – When you provide customers an installments payment system on your e-store, they end up purchasing what they want without worrying about the total bill value. There are fewer instances of cart abandonment and shoppers appreciate the flexibility you offer them, which improves their trust and confidence in your brand.
• Improved Conversion Rate – The option to pay in installments encourages more site visitors to transition from the consideration to the purchase stage. And higher the conversion rate, the more sales you make.
• Higher Average Order Value – Customers manage to buy pricey items and spend more than usual with installment payments. Even strictly budget shoppers can buy what they desire affordably. This boosts the average order value, and consequently, your total revenue.
• Widened Consumer Base – Providing the option of installment payments also helps in expanding the base of customers by attracting those who probably hesitated to shop from your store before, owing to the pricing. You get to tap demographics like millennials and Gen Z shoppers.
• Upfront Payment – Offering the installment purchasing feature doesn’t impact your cash flow negatively, since you receive upfront payment from the customer’s bank. This means, you don’t have to compromise on your financial stability as a business while enhancing the customer experience.
• Enhanced Customer Loyalty – Since the installment financing feature eases the customer’s journey on your ecommerce store, they tend to refer your brand to others and keep coming back themselves for more shopping in the future. In the long run, this pattern improves retention and loyalty.

Make the Most of Installment Payment Plans

By now, you can see why embracing installment payment is the way to go for modern businesses. Besides offering more flexibility to consumers, such payment plans empower them to own the products they want and live a better life than what their immediate financial circumstances permit. As a merchant, you get to benefit from improved brand image, higher conversions, more sales and revenue, and an enhanced bottom line. If you are wondering how to get started, picking an online payment gateway like PayTabs can make your life easy. Integrating it with your website and app can take your customer’s checkout experience to a whole new level, while ensuring you receive payments on time, securely, and without any hassle.

FAQs

1. What are the advantages of paying in installments?

As a customer, making installment payments helps you to enjoy flexibility, buy what you want without worrying about money, own even premium products right away, manage your budget easily, and keep aside emergency cash. As a merchant, when you allow customers to pay in installments, it improves their shopping experience, gains their trust, drives more conversions, and boosts loyalty in the long run.

2. Are installment payments available for all purchases?

Installment financing might be available on all or some purchases, depending on the type and size of business, their policies, and nature and price of the product. Usually, most merchants offer the installment payment option for electronics, furniture, high-end jewelry, clothes, fashion accessories, vehicles, etc.

3. Can I pay off my installment plan early?

Yes, usually you can pay off your installment plan early by clearing any remaining balance. However, check if there are any penalties or fees associated with such payments. It is generally a good idea to use any extra money you have to pay off a purchase completely and become debt-free soon.

The ecommerce landscape across Jordan, Iraq, and Palestine has been growing steadily over the years. An 88% internet penetration has fueled the rise in online transactions in Jordan. On the other hand, internet users in Palestine have been observed to buy a whole host of items online, including furniture, cosmetics, toys, apparel, and shoes. In Iraq, total digital transaction value is expected to reach a staggering worth of USD 20.22 billion by 2028. It is evident that more and more consumers are realizing the convenience of purchasing both necessities and luxuries online. And this means a whole new world of opportunities for you as a merchant.

However, to capitalize on this ecommerce boom, you need the right ecommerce payment gateway. It can enhance the checkout experience for your customers and also make it easy for you to accept payments securely, quickly, and efficiently. So, how to pick a payment gateway that aligns with your business’s needs and goals?

Here are 13 Things to Consider Before Choosing the Perfect Ecommerce Payment Gateway

1. Merchant Acquiring Services

To accept card payments, you need a dedicated merchant account. If you are a small business, opting for an all-in-one service provider can be adequate. You can avail both payment processing and merchant acquiring services this way. Merchant acquirers refer to entities that collect payments based on cards and accepted by retailers. Acquirers send such payments to card issuers.

Now, if you are a large venture, a full-service merchant account is more apt. You get a virtual POS (point of sale) from an acquiring bank, so that it is easy to integrate card payments with your e-store. Moreover, you can also use payment orchestration services, so that every transaction is routed optimally to the right processor.

2. Country-specific Support

When choosing from multiple ecommerce payment solutions, make sure your preferred one works in your specific country and also allows you to accept payments from customers located in other countries. Providers like PayTabs, for instance, help you get paid from any corner of the world. Whether you want to strengthen or kick-start your international presence, your e-store should be equipped for cross-border payments.

3. Payment Methods and Currencies

The modern customer loves flexibility and choice when it comes to making online payments. So, pick from online payment gateways that offer shoppers various payment methods. If you wish to foray into new geographies, the gateway should offer localized payment methods in each country as well. It should also support as many currencies as possible, so that customers feel comfortable and confident about your website. Check if there are any additional fees for currency processing.

4. Product Permission

The payment gateway you select should permit the products you sell without any hassle, whether they are physical or digital in nature. Go through the list of restricted businesses before going ahead. Usually, categories like weapons, animals, illegal drugs, etc. are not supported by most gateways.

5. Hosted or Integrated

Ecommerce payment gateways can be hosted offsite or integrated with your e-store. Consider which one you want before making a choice, as both have distinct pros and cons.

In case of a hosted solution, the gateway handles PCI compliance and data security, which is an advantage. However, the customer gets redirected to a third-party domain, which can hamper conversion and sales. Top payment gateway providers address this issue by showing a payment window on the checkout page itself.

In case of integrated payment gateways, the biggest advantage is that customers don’t need to leave your site for purchase completion. The checkout experience is seamless. However, you need to handle the programming. Leading gateway providers offer development documents to help you do the integration in very little time though.

6. Payment Gateway Integration

Go for a gateway that has a fast and simple process for integration. They should also provide necessary technical support to your developer. The integration should not have a negative impact on the speed of payment processing or lead to suboptimal user experience.

7. Mobile Optimization

Since most customers nowadays use mobile devices instead of desktops to make online purchases, your chosen payment gateway should offer a checkout page that is mobile-optimized. It will improve customer satisfaction and boost conversions.

8. Payment Speed

Want to minimize instances of cart abandonment and offer a smooth experience to shoppers? Ensure that the payment gateway is good on speed. Customers should transition from the shopping cart to the payment confirmation page in the least time possible.

9. Recurring Payments

In case your business offers subscription-based services, opt for a gateway that automatically supports recurring payments. You should also be able to define parameters like billing cycles, subscription name, and prices.

10. Security

Secure payment processing is of paramount importance, whether your business is located in Jordan, Palestine, or Iraq. So, select a payment gateway that complies with the latest security standards like PCI, SCA, 3D Secure 2.0, etc. Keeping your customer’s sensitive data safe is vital for winning their trust.

11. Scalability

Try to gauge if the payment gateway can grow with your business and make global expansion frictionless. It should not only support multiple currencies and a variety of payment methods, but also comply with local regulations and handle increasing transaction volumes efficiently.

12. Support

When it comes to payment gateway selection, choose one that provides adequate and timely support whenever the need arises. Find out if the support team is available round-the-clock or for specific hours. Ask about the support channels, like live chat, email, phone call etc. Can you access resources like FAQs for common issues? Are the support representatives experienced and knowledgeable? Go through online reviews to get an idea about the same from other merchants.

13. Pricing Options

Different gateway providers have different fee structures. While some might charge fixed monthly rates and a setup cost, others can charge you per transaction. However, even a small percentage of the transaction cost can blow out of proportion if you have high-priced products or record large sales volumes. Ideally, opt for a provider that has a dynamic pricing model to help you scale cost-effectively.

Make an Informed Decision

Now that you know about all the things to look for in a payment gateway, get started by researching multiple providers. Go through their offerings, fee structures, and other features to gauge the gateway’s relevance to your business. Shortlist a few, compare them carefully, talk to representatives, and go for demos, before zeroing in on one.

UAE’s ecommerce market is poised to generate sales worth USD 8 billion by 2025, as per the Dubai Chamber of Commerce and Industry. With almost 100% of the country’s population enjoying access to mobile phones and internet, the possibility of reaching this staggering figure hardly comes as a surprise. Online payment solutions are especially fueling this expansion of the ecommerce landscape, as more and more people are realizing the advantages of going cashless and embracing quick and efficient virtual transactions. As far as popular regional payment trends are concerned, mobile or digital wallets have emerged as a favorite among the Gen Z population. Many customers are also warming up to the buy now pay later model. Cards and bank transfer continue to be common modes of digital payment as well.

So, how are Middle East’s payment gateways revolutionizing life for both consumers and merchants? What is their role in the region’s ecommerce boom? Let’s find out.

Reasons Why Payment Gateways are Driving Ecommerce Success

A payment gateway is essentially a technology that merchants can use to accept online payments from customers. It collects the customer’s payment information and sends the same to the merchant’s acquiring bank for processing. The top Middle East ecommerce payment gateways like PayTabs ensure the security of sensitive data while facilitating smooth transactions and improving the customer experience.

The many benefits of such gateways are detailed here:

• Safety

Security is of paramount importance for any online business, and the right payment gateway comes with all the latest measures to protect customer and financial data against frauds and scams. These measures are updated periodically as well to resist new threats. Leading gateways comply with PCI DSS standards for starters. This instils trust and confidence in shoppers and encourages them to make repeat purchases.

• Checkout Simplicity

The best online payment gateways offer customers a glitch-free and fast checkout experience, which means fewer instances of cart abandonment. Every payment request is routed in the most optimal manner to minimize the chances of failure or non-acceptance. This translates to more sales and revenue. Some payment gateway providers might also allow you to personalize the checkout experience based on the nature of your business, target audience, average transaction volume and value, etc.

• Multiple Payment Options

Digital payment platforms like PayTabs enable merchants to offer a variety of payment modes to customers. This means greater flexibility and the freedom of choice. Shoppers don’t have to abandon their carts at the last moment just because they can’t find their preferred payment option. This improves overall satisfaction and also enhances your brand’s image.

• Multi-currency Support

Aided by the right payment gateway, merchants in the Middle East can grow their presence beyond geographical boundaries. Such gateways allow you to accept multiple currencies and take away the hassle of handling exchange rates as well. This helps you to expand your customer base since people in other countries enjoy the flexibility of paying in their local currencies. You end up boosting their shopping experience and win their trust. However, the payments received are converted into your base currency, for your convenience.

• Scalability

The best Middle East payment gateways can scale in line with your business. This means, they are designed to handle varying requirements when there is a change in website traffic or transaction volume. For instance, during festivals or in the beginning of a month, you might witness more demand. Having a gateway that can tackle the extra workload efficiently is a necessity in that case. Moreover, if you wish to foray into new geographies or markets, such gateways can make the expansion easy by complying with local regulations.

• Easy Integration

A big reason why online payment gateways are driving ecommerce growth in the Middle East is because they are easy to integrate with both websites and applications. The merchant onboarding process is simple and there is no need for you to have technical knowledge to get started. Plus, demo and training sessions are offered to kick-start your payment system and familiarize your team with how everything works.

• Smart Analytics

Payment gateway providers in the Middle East realize the importance of data when it comes to decision-making. Hence, they offer cutting-edge dashboards, tools, and report generation options, so that you can obtain useful insights into consumer behavior as a merchant. In-depth data analysis allows you to spot gaps or shortcomings as well as areas that are doing well. You can take informed decisions that are not just based on assumptions or conjectures, thereby improving the customer’s experience further.

• Cost-effectiveness

The competitive pricing structure offered by payment gateway providers in the Middle East is yet another reason why merchants are adopting the same in droves. Usually, you might have to pay a fixed fee or a percentage based on the transaction volume. Since top providers offer customized solutions, you are likely to zero in on a price model that aligns with your business’s current financial state, future growth potential, and budget.
Also Read: How to Fight Ecommerce Fraud with Payment Orchestration

Payment Gateways are the Future of Ecommerce

The popularity of online payment solutions is only expected to grow in the near future in the Middle East. The convenience of shopping from anywhere, with practically any mode of payment, and any currency, will draw more consumers, even from previously-untapped demographics. The safety, speed, and efficiency of payment gateways like PayTabs will boost growth across multiple ecommerce sectors dealing with products as well services. Constant advancements in technology will help merchants to drive more conversions and improve customer loyalty, for a significantly strengthened bottom line.

In another couple of years, the ecommerce market in the Middle East is likely to reach an impressive worth of $50 billion. as per a recent report from Deloitte. This sharp growth is being driven by the increasing penetration of mobile devices, a noticeable spike in the number of tech-savvy, mostly millennial shoppers, and the convenience of buying anything from anywhere. Digital revolution is also helping online businesses to expand beyond geographical boundaries, reach customers in the remotest of places, and boost sales and revenue in an unprecedented way. However, multi-currency payment gateway integration is essential if you want international transactions to go smoothly and without any security bumps.

What you need is a gateway that helps you navigate currency-related intricacies and rules in various countries, so that customers can enjoy a seamless experience and you can receive payments on time. Multi-currency support in payment gateways makes life easy for customers who prefer to use their own currencies for payment and avoid the hassle of conversions. As a business, you benefit too, since you can streamline, track, and manage transactions with better efficiency and in less time, whether you are receiving payments from shoppers or paying international vendors. Now, let’s find out more about the processing of a multi-currency payment, some common roadblocks involved, and the how a payment gateway powered by advanced technology is changing the game.

Multi-Currency Payment Processing – What Really Happens?

Ensuring currency diversity for online businesses can arm global shoppers with much-needed flexibility and expand the base of customers significantly. However, you first need to know how the process works. Here is a quick overlook:

• Order placement and currency exchange – When a shopper places an order in their chosen currency, your processor automatically converts the amount into the currency you use. This conversion occurs at the exchange rate.
• Transparency – The total payment amount then pops up in front of the customer in their local currency, so they can complete the purchase without worrying about transparency, fluctuations in the exchange rate, and unexpected conversions fees.
• Multi-currency transactions – Your payment processor then facilitates seamless multi-currency transactions by employing tools for managing the exchange rate. It enables you to set an exchange rate margin too.
• Protection against exchange rate fluctuation – A fee is charged over and above the existing market exchange rate to protect you against fluctuating exchange rates and handle the cost of currency conversion.
• Settlement of funds – Once currency conversion is complete, fund settlement happens in your base currency.

Executing a Multi-Currency Payment Step-By-Step

Growing your business with multi-currency capabilities requires you to understand every step involved in the payment process. This will give you a clear idea about the customer’s checkout experience and help you choose the ideal gateway for fast and glitch-free transactions. The steps outlined below also hold true if you are paying foreign suppliers, in which case, you will be the customer.

1. Customer makes a purchase decision – The cycle is triggered when a customer decides to buy a particular product or service and checks if your site supports multi-currency payments.
2. Customer selects a currency – They then peruse the different currency options on the payment page and select an international currency or their local one.
3. Gateway shows the payment amount – Once the customer picks a currency, your gateway converts the product’s price into the said currency and displays it. The amount is determined by the existing exchange rate and includes fees charged by you or the payment processor.
4. Customer checks payment breakdown – The shopper reviews the displayed amount and checks the fees levied for international transaction, currency conversion, etc.
5. Customer selects payment mode – Post review, the customer chooses a payment method, be it wire transfer, credit card, digital wallet, etc.
6. Customer provides financial details – In this step, the customer supplies all payment-related information, such as name on the card, billing address, card or account number, phone number, and so on.
7. Gateway processes payment – Next, the multi-currency payment gateway integration accepts the data entered and processes the transaction in the currency chosen by the customer. The payment is approved and completed after your processor communicates with relevant card networks and financial institutions.
8. Customer account is debited & merchant account is credited – After payment authorization, the customer gets a message that shows the transaction is complete. The necessary amount is deducted from the shopper’s account in their local currency and credited to your account after conversion to your base currency.
9. Fund settlement happens – You can retain the received amount in the base currency or get it converted to your local currency. Remember that the time required for fund settlement depends on the amount in question and where the money is supposed to go.
10. Payment confirmation reaches the client – Lastly, the customer receives a payment confirmation from your end, covering the transaction ID, details, and payment amount.

Challenges Facing Global Payments

Whether you accept payments in multiple currencies, make payments to globally situated suppliers, or have subsidiaries in diverse geographies, managing foreign exchange and currency can be time-consuming, tedious, and expensive. While overcoming challenges in global payment processing is possible with an automated and tech-powered gateway, you need to be aware of the key problems first:

• Unpredictable conversion costs (currency conversion fees, bank charges, fluctuations in exchange rate)
• Complicated operations (accounting adjustments, currency conversion, reconciliations) increase administrative effort and risk of mistakes
• Currency-related risk for both customers and merchants (currency fluctuations and volatile exchange rates negatively affect cash flow)
• Risk of cyberattacks due to gaps in the payment processor
• Complex relationship with foreign banks (language barriers, difficult communication, time differences)
• Slow processing speed due to greater scrutiny by multiple intermediaries along the payment chain
• Limited number of currencies supported by some gateways
• Varying international payment regulations in different regions
• Difficulty in tracking international payments and poor visibility into the process

Benefits of Multi-Currency Payment Gateways

Payment Gateways powered by technological revolutions like artificial intelligence and machine learning can help you accept and make multi-currency payments efficiently, affordably, and with precision. You won’t need to maintain relationships with multiple banks in different countries. Instead, you can leverage automation to make the global payment system more streamlined, lower the risk of currency fluctuations, and obtain insights to improve your business’s profitability strategically. It can save you time, energy, and free up more resources for core business operations and ideation. Some of the other key advantages are detailed here:

• Smooth Foreign Exchange Activities – You can rest assured that payments will be processed at the latest exchange rates and the risk of volatility will be managed effectively. In case you are paying foreign suppliers, you won’t need to worry about having enough money in your local bank account or rushing to purchase foreign currency if you want to place a large order suddenly. Leading payment gateways can fund a virtual account in your chosen currency, convert to the local currency, and carry out payments in an automated way. This way, you can maintain a healthy relationship with vendors and suppliers.
• Automatic Invoicing – In case you sell subscription-based services in different currencies, an advanced payment gateway will create and send invoices in the currencies required, based on preset rules. This will save time and eliminate human errors related to currency conversion. Moreover, you won’t need to remember to send invoices on time or worry about customers forgetting to make recurring payments every month, quarter, or year.
• Exchange Rate Locking – Some gateways allow customers to lock in a rate for a certain period of time, so any change can be prevented before the payment is done. This can build goodwill over time and encourage customers to make repeat purchases.
• Currency Risk Management – The best-automated payment processors protect you against fluctuations in the exchange rate through special tools and hedge strategies. This way, you can maintain a positive cash flow even if currencies move unfavorably.
• Easy Reconciliation – To simplify accounting and reconciliation, top payment gateways convert funds received in multiple currencies into the local currency you use as a merchant. This happens automatically and reduces manual effort.
• Compliance – Regulations associated with international payments are different across geographies. Luckily though, payment gateways backed by automation can ensure compliance at every stage without manual intervention. They can alert you in case of any fraudulent activity, verify transaction details, and even generate insightful reports.
• Hassle-free Integration – The best multi-currency gateways are easy to integrate with e-commerce platforms and enterprise resource planning systems. This makes it easy for foreign customers to execute payments in their local currencies without getting diverted from your site. It inspires confidence in shoppers and earns their trust.
• Smart Tracking – Automated payment processors can track all transactions in real-time, providing updates to both merchants like you as well as customers. This speeds up the entire process and troubleshoots issues before they magnify. You can also identify ways to improve the checkout experience further and introduce more security measures if required.

In a Nutshell

So, now that you realize the many benefits of multi-currency payment gateway integration and how the process works in reality, are you ready to choose the right gateway for your online venture? Take out time to research the various options available, compare the services and charges of different providers, and go through testimonials of their past clients before taking a decision. Assess your business’s distinct needs and consider its size and type as well while making the choice. To scale internationally and thrive despite unpredictable currency movements and exchange rate volatilities, you need a powerful payment gateway like PayTabs that is fast, efficient, and absolutely secure. It will help you gain more control over transactions, comply with regulations in different countries, minimize or eliminate human errors, and take decisions driven by real data – everything that you need for a better bottom line.