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4 solid tips to help choose the best online payment gateway

Category: Growth Hacks

4-solid-tips-to-help-choose-the-best-online-payment-gateway

A payment gateway is one of the most important components of an ecommerce venture. With a secure payment gateway, you can ensure the safety of your business as well as of your clients’. In these tough times, payment gateways have become a soft target for scammers and hackers. If your business is dependent upon online payments, then it is necessary to take proper steps to ensure the robustness of these online payment systems. There are several criteria which should be kept in mind when choosing a secure online payment gateway. Listed below are some tips will help you find the right one.

Protection against Cyber Attacks:

A secure payment gateway is the one which can protect yours as well as your clients’ data. With the growing scope of online shopping, the segment come under phishing and spamming attacks. It is important that your payment gateway is able to provide protection against such attacks. This is generally ensured by employing latest technological tools to defend your data from being stolen. These cyber attacks may not only impact your data but also your reputation in the market. Therefore, it is essential to pick your online payment gateway after thorough consideration.

Also Read: Top 3 things to consider while choosing a payment gateway for your business

Pay Attention to Chargebacks:

Another metric which can help you gauge the impact of a secure payment gateway is the number of chargebacks. A company generally faces two types of chargebacks — distribution chargebacks and consumer chargebacks. Both are detrimental to the business in long run. Distribution chargebacks are generally more difficult to recoup. The ideal solution is to minimize the incidences. Consumer chargebacks, on the other hand, are generally caused by unscrupulous clients. If they are making payments through stolen or otherwise ill-gotten means then such payments are bound to fail, leading to chargebacks. You should choose an online payment gateway which is able to minimize chargeback related issues.

Proper Integration:

Incorporating an online payment gateway on your website is no longer a tedious task. However, you should still ensure that the integration of the payment gateway is seamless and secure. This is important to provide fast and reliable experience to your clients. You should also ensure that various software used by you such as online store software, shipping database and cart software are compatible with your online payment gateway system. Any technological loophole can make your system vulnerable to cyber attacks and threats. Your software should also be compatible with your website and hardware to provide smooth experience to your clients.

Also Read: Tips To Choose the Right Payment Integration Method for Your Ecommerce Site

Secure Data Storage:

Another important feature to look for in an online payment gateway is the data storage process. However, data storage is an expensive proposition. You may have to limit the amount of data that may be stored. You should properly carry out the cost benefit analysis of data storage facility provided by your online payment gateway system. Payment gateways like PayTabs provide optimum solutions in this regard. Furthermore, the system should also have proper checks and balances in place to weed out dubious transactions. These solutions should use technologies such as fraud scrubbing and anti-theft software to enhance their credentials and provide the best possible services.

Also Read:9 Things to Look For In a Payment Gateway

ecommerce-business-models-their-features

Ecommerce businesses are growing at a fast pace across the world, with technology advancements in the sector making the functions easier and efficient. There are several businesses models which have proved their worth in the market. Each has its benefit and challenges. To make your online business successful, it is essential to pick a model that suits your requirements. But do that, you need to analyze them carefully.

So, read on to know about the various ecommerce business models –

  • Business 2 Business:

    It is also known as B2B ecommerce and deals with products and services provided to other businesses. Some of the main examples of this e-business model is the supply of raw material and products to retailers. This is one of the most common and versatile models of ecommerce businesses. While, this model generally has high volume and scale, it also tends to have niche market, which may impede its growth. Under this model, your organization will not be dealing with the end customer but would be supplying goods and services to intermediaries in the supply chain. It generally uses customized ecommerce platforms for carrying out their operations.

Also Read: The Importance of Starting an Ecommerce Business

 

  • Business 2 Consumer:

    The B2C model is one of the most commonly used business structures. However, there is a big scope of customization under this umbrella. This type of e-business model features high turnover but relatively lower value per order. Due to shorter turnaround time, the amount of marketing expenses is generally lower. This model is also designed to promote easier pivot as consumers change their taste frequently. The use of technology is more prevalent under this kind of model, with an aim to provide optimal shopping experience to their clients.

 

  • Consumer 2 Consumer:

    This ecommerce model goes by the name of C2C model and is one of the latest innovations in the area. Under this, consumers are connected to each other for the exchange of goods and services. Such business derives its income by changing listing fees or transaction fees. Some of the most prominent examples of such company are eBay and Craigslist. While this type of business mainly thrives on account of its simplicity, it also faces various challenges such as technology maintenance and quality control. The use of social media has proved to be an excellent strategy for such businesses.

Also Read: The Rise of the Subscription Business Model

  • Consumer to Business:

    C2B business model is an innovative structure where an individual offers products and service to organizations. These individuals are generally highly-qualified and offer services such as writing, artistry and professional acumen including accounting and legal work. Unlike other online ecommerce business models, this structure is loosely regulated. There are no specific rules applicable to this sort of arrangement, which may hamper the growth prospects. The model also tends to deal more with the services than with products. However, with the use of technological tools and changing mindsets, this business model is set to see an uptick in its adoption.

 

  • Mixed Business Models:

    Ecommerce is a highly dynamic field, and therefore, is constantly evolving. In many circumstances, it may be prudent to employ a mix of different business models available. Such customized models fall under the category of mixed business models. However, all the business models are required to use robust online payment methods. Further, such models may also be created by combining different traditional ecommerce business models. The utility of such ecommerce model is greatly enhanced if a proper analysis of the market is done to understand its exact requirements.

Also Read:5 Simple Steps to Launching a Successful Ecommerce Business

key-payment-data-points-that-your-business-should-value

It is important to take available information into account while taking any business-related decision. The use of correct and relevant data makes the decision more robust and efficient. However, many businesses have yet to understand the importance of payment related data. While payments are deemed to be a process, it is vital to understand that the information generated by them is immensely helpful in taking various business decisions and carrying out payment processes.

Here are some of the key payment data points which are highly useful for an online organization.

  1. Conversion Rates:

The main idea behind using key payment data point is to improve the customer experience. If the customers are finding the payment setup difficult to understand, then you should take a hard look at the payment processes. Chances are your procedures are too long or tedious for the visitors. Your payment data analytics may also show a large number of people leaving your payment sign up page midway, prompting you to re-evaluate your sign-up

  1. Rate of Authorization:

This tells you the success rate of the attempted transactions. As in how many transactions were completed. The lower rate of authorization implies that the payment process met certain roadblocks on the way. There could be many reasons behind that. For example, the authorization might not come through if the client does not have adequate funds in their accounts or their card may have reached its limit. Other reasons include expiry or misuse of the card. This metric can automate the process, making it more efficient.

  1. Ratio of Chargebacks:

Chargeback rate is one of the most important metrics for a business. Higher chargebacks may indicate a wide range of issues, making it imperative for businesses to pay proper attention to this payment data point. You should look at the occurrence of a chargeback to determine the root cause. Prompt information about a chargeback may allow you to look into its reasons quickly. Additionally, you should find out why it happened. Once you have identified the reason you may work on rectifying it.

  1. Reconciliation of Payments:

Another important exercise needed to be carried out by businesses is to look at the reconciliation of the payments. In simple terms, it refers to the time taken for the eventual cashing of a transaction, that is the time taken by the money to actually hit your bank account. Proper knowledge about this metric can help you in designing an automated process, leading to better liquidity. The reconciliation process can also be automatized for more robust payment data analytics. With the help of this metric, you can identify clients who are prone to late payments, letting your design better collection policy.

  1. Customer Satisfaction:

It is another important consideration. You should know the preferred methods of payment for your clients. This data can be easily collated from the software you use for processing payments. If you use multiple sources of payments, then you can analyze the data to understand the pattern. You can also segregate the data based on various metrics such as markets and products. This insight can help you to tweak your processes accordingly. With such changes, you can retain your customers, and at the same time, attract new ones.

Conclusion

With these key data points, you can improve every aspect of your payment strategy of our online business.

Also Read: Key Points to Know Before Integrating a Payment Gateway into Your Website

top-5-signs-that-youve-outgrown-your-payment-service-provider

Every online business needs a reliable and trustworthy payment service provider to reap profits and bring in more traffic. It forms a crucial part of the business’s structure. As it allows them to generate revenue and ensure the liquidity of their concern. However, if your payment service provider is not able to keep up with the growth of your business and changes in the technological environment, it may be time to reconsider your partnership with your provider. Here are some of the top signs that you need to upgrade your online payment system and provider.

  • No Regular Updates:

Since an online payment system is critical for any business, it is important that your provider offers you the latest services. Apart from the range of services, it is also imperative that your provider upgrades the system to provide smooth services. As online payment systems are highly technological in nature, it needs to evolve with changes in circumstances. However, if your service provider does not provide such updates on regular basis, it is time to change your provider. The slow response rate may also hamper the effectiveness of your payment system, causing undue inconvenience to your clients. Smooth communication and updates are essential to keep the system running in a perfect manner. So that your clients get the best possible service.

  • No Customization:

Customization is essential to ensure that your online payment system is in line with the requirements of your client base. And your existing service provider may be offering the same payment solution to all their clients. However, this type of off-the-shelf payment system is not likely to be the best for your business. It is essential that you properly identify your market and your customer base. Then design your online payment system to meet their distinct requirements. Further, your service provider should also be dynamic enough to change the payment system in line with the changes in your business. If your online payment service provider is not able to customize your system to suit the changed environment, then you should consider changing your provider.

  • Complicated Process:

A payment system is a complex system, consisting of several steps. However, you need to ensure that the process is quick for your customers. In order to achieve these contradictory goals, you should carry out periodic testing of your system, and make sure that it is not unduly complex for the customers. The system may also get complicated over a period of time due to alternations or addition of certain features. Thus, the payment process should be designed in such a manner that it can be upgraded in future without making it cumbersome.

  • Low Monetization Options:

New payment systems are cropping up every day. And they are offering multiple payment options to make the shopper’s experience easy and enjoyable. So, if your service provider is not able to provide you multiple payment options, it is highly likely that even your loyal customer base will eventually migrate to other businesses. Essentially, customers should have the flexibility to choose from different payment options to complete their transactions. Further, the service provider should also offer you the option to monetize your engagement. This generally works through a revenue sharing model, where you are paid a certain percentage of the volume of business generated. If your service provider is not offering you any such service, then you might want to change your provider.

  • Limited Support:

Today’s dynamic businesses need different options and if your provider is not able to provide such options, then your clientele may suffer unnecessarily. Also, your service provider should be able to offer timely and adequate crisis resolution support. Multiple channels should be available to reach your provider in case some issue crops up. Ideally, you should also have emergency access to a support system. Which goes above and beyond their usual crisis resolution methods. A smooth-running payment system is essential for any business and even a single problem may cause a big dent in its market reputation. So, if your online payment service provider is not able to provide you reliable support, it is time to move on.

All in all, a robust online payment system forms the backbone of any modern business nowadays. So, it is vital to choose a payment provider that can grow with you and meet your changing needs. So that a smooth experience is always guaranteed for you and your customers.

understanding-the-difference-between-a-payment-gateway-and-a-payment-processor

Businesses now need to deal with online transactions more than ever. For this, you need to set up an online payment processing system that is safe as well as efficient. Such a system can comprise of several service providers. So, it is important to know the precise services provided by each provider. For starters, you need to distinguish between a payment gateway and a payment processor. While both of them provide online payment related services, they have very distinct areas of operations. So, read on to better understand their differences and run your business with confidence.

What is a payment gateway?

A payment gateway is a tool that helps process the payment between the client’s bank account and the business’s bank account. The main function of a payment gateway is to secure the transmission of online payment data from one end to another. These service providers are also responsible for authorizing payments for card-not-present transactions. A gateway is mainly useful for processing online credit card payments.

In simple terms, a payment gateway is a like a middleman between a client and an online business. When a client provides their payment details to an online business, then the gateway sends this data to the payment processor for further action.

For an online business, a payment gateway can provide a wide range of services such as ensuring the safety of personal data, uninterrupted services, and the ability to accept multiple payment options. Furthermore, a payment gateway may also enable your business to accept different currencies, thus enabling international transactions. While selecting a gateway for your business, you should pay proper attention to the service offered as well as the various fees and commissions charged.

Also Read: What are the benefits of working with a payment processor?

What is a payment processor?

A payment processor is generally a financial institution which carries out payment processing services for online businesses. Such payment processors generally enjoy collaboration with other companies, which have direct interaction with merchants or consumers. A processor acts as a connecting node between a payment gateway and a merchant’s account.

The main task of a payment processor is to facilitate the transfer of payment related information and to keep the data secured. A processor collects the data pertaining to the transaction, validates and executes the instructions, and then deposits the money into the merchant account. It concludes the cycle by informing the payment gateway about the final outcome of the transaction.

There are a wide range of payment processors available in the market today. It is important to pay attention to different criteria while selecting an appropriate payment processor for your business. A processor should not only provide swift and smooth transfer of funds, but it should also be able to ensure that sensitive data transferred remains safe and secure.

Also Read: The 4 Step Procedure for an Easy Payment Gateway Integration

Integration of payment gateway and payment processor

For an online business, it is important to engage the services of both a payment gateway and a payment processor. In order to complete the cycle of online payments, the services of both are required in conjunction with a merchant account.

Essentially, a payment gateway is required to receive the payment related details from the client. Then pass the information on to the payment processor, which carries out the rest of the transaction and sends the status back to the payment gateway.

These service providers should be chosen carefully after taking your business’s specific requirements into account.