How to Choose the Best Payment Gateways for your eCommerce website?

Choosing a Payment Gateway

With so many different options, it may seem difficult at first to decide which payment gateway is appropriate for your business. If you’re located in the US, you will have access to most if not all available options. If you are not, your choices may be more limited.

Each payment gateway offers a different experience. Some, like Square, allow easy integration with physical retailers. Others, like Paypal, are widely known and trusted, thus lending legitimacy to your website. Other popular payment gateways include ApplePay, Google Checkout, WePay, and Skrill, each with its own set of strengths and weaknesses.

When deciding which payment method to integrate into your website, you must also consider your audience. What age range does Amazon Pay cater to? Who prefers PayPal? Are your customers comfortable with Square?

Integrating multiple gateways is always an option, but note that some payment gateways require subscription fees, which will need to be accounted for when considering revenue and profits. It’s important to look at the overall impact of a gateway on both your conversion rate and profit margins.

It can be helpful to test out multiple gateways while your eCommerce site is in its infancy. This gives you a chance to see which ones give you the best conversion rates and which provide the most monetary value. Shopify, for instance, requires the merchant to pay extra to use payment gateways other than Shopify Payments. However, customer preferences may still make Amazon Pay more cost-effective due to higher conversion rates.

On-site Payment Processing

While an external payment gateway provides extra convenience, it comes at a cost. Companies like Amazon will take a cut of all transactions completed through their tools. This cut may be small, but if you want to maximize profits, a method that enables direct transactions between yourself and your customer might be a better bet in the long term.

Keeping the customer on your own website has the additional benefit of providing them with fewer distractions. Once they leave your page, they can easily get caught up doing something else or looking at competing products. On-site payment gateways may offer a higher purchase rate.

Finally, in many cases, customers have less trust in a business that directs them offsite to pay, although household names like Amazon and PayPal may counteract that impression.

The answer is to simply keep testing different payment options, checking both conversion rates and overall affordability.

PCI Compliance

When putting together an on-site payment option, eCommerce websites must comply with PCI Standard, the standards set by the Payment Card Industry Security Standards Council. These standards, upheld by credit card companies, exist to provide security for any parties conducting a monetary transaction via credit card.

Though American and international law does not necessarily mandate PCI compliance, entities who follow the standards set by the Council are not legally liable for any data breaches which might involve their websites or credit card transactions. A non-compliant transaction will incur fines for any banks involved, which will inevitably trickle down toward the parties involved in the transaction. Additionally, on-site payment gateways must not store credit card information for privacy reasons.

Using “Software as a Service” (SaaS) payment gateways eliminates the need to manually and personally ensure PCI compliance. Check out our article 7 Questions to Ask When Choosing a Sales Platform for more on this topic.

For more information on the Payment Card Industry and its standards, you can visit this website.

Cryptocurrency

As the internet develops, so do methods of paying for goods and services on it. Cryptocurrencies like Bitcoin, which function as digital representations of cash assets, are increasingly popular with younger audiences. Depending on the audience your business is targeting, you might want to look into integrating this method of payment into your eCommerce business.

However, you should understand there are some consequences to this choice. First, cryptocurrency is volatile, frequently changing in value. Bitcoin, sometimes considered the most legitimate cryptocurrency, experiences constant fluctuations in price. Due to this fluctuation, the accounting for revenue can become complicated if the value of the sale is unclear.

Websites like Coinbase provide the means to immediately convert cryptocurrency to fiat, thereby removing the risk of volatility while still allowing your customers to check out with crypto. This may assist in accounting as the value of the sale, in dollars, is known.

Depending on your target audience, accepting cryptocurrency could set you apart from your competition and improve your conversion rates. How much will depend on the products you sell and who you’re selling them to. You’ll have to balance any advantages in accepting cryptocurrency with potential complications in your accounting and tax reporting. You should consider these tradeoffs and consult with your accountant before accepting cryptocurrency on your site.

Final Thoughts

The world of eCommerce is still developing, and new methods of money transfer emerge each day. If you’re trying to establish legitimacy and maintain the trust of your audience, it’s important to keep your ear to the ground regarding standards and practices as well as new payment gateways and even new methods of currency exchange.

If you need help selecting or implementing a payment method, contact us today for a free consultation.