From e-commerce stores to SaaS startups, businesses need to receive payments from customers, and payment gateways are one of the most common ways to do this. There are many options for collecting money online, for example, credit cards, Buy Now Pay Later cards, or PayPal.
However, not all payment gateways are the same. What you need may depend on your business’s size and needs. Here is a guide to choosing the best payment gateway for your business.
What Is a Payment Gateway?
As the name suggests, a payment gateway is a technology that allows your website to process payments.
The following are some of the primary features of a payment gateway:
- Authorization in an e-commerce transaction.
- A customer enters for you their card details to transfer a payment.
- The payment gateway initiates the payment for the customer.
You may also meet such related terms as payments processors, payment providers, or payment platforms. Although, not all of these terms are technically synonymous, yet in common life, they are broadly used to describe similar solutions.
Payment gateways are critical components of your e-commerce business, but simply integrating a payment processor does not guarantee success. Most businesses do not make money from accepting payments (i.e. do not collect fees for it).
However, choosing a payment processor is vital.
Why Do You Need to Choose Payment Gateways Wisely?
For your e-commerce business to thrive, it needs a payment gateway, and not just any, but the one that will serve your business and your customers in the best way. What you need may depend on your business’s size and requirements.
Every company needs payment gateways of various kinds to connect with customers. Each is aimed at different business requirements.
Let’s think about what these requirements may be:
- Besides being able to accept payments, what do you expect from a payment gateway?
- Where do customers spend money? Do they buy things online? If so, how often?
- Should customers pay in bitcoins, in pesetas, or dollars?
- What is the difference between these solutions?
Let’s face it. There is no single answer to the question.
Many payment gateways offer only one option, others let you decide which currency to use based on your location. For example, PayPal is best for large companies, whereas other payment gateways focus on small businesses.
How Many Payment Gateways Do You Need?
Not all of your customers will have cards and accounts of the same payment processor. In most cases, you will need to sign up with more than one payment provider.
Therefore, there is a possibility that you might need to have integrated platforms that support more than one payment method. You should understand the cost of each of the platforms that you will use, which may include different processing fees, platform fees, and costs related to security.
The more payment gateways you connect, the more options and flexibility you offer your clients. At the same time, the complexity of your bookkeeping increases proportionally.
If your Shopify store has several payment gateways simultaneously, for example, the native Shopify Payments, PayPal, and Stripe — besides more complex fee calculations, your business may face certain difficulties in accurately recording all sales without duplicating the data from every connected sales channel.
There is smart software, though, that automates the flow of your sales information from payment processors into your accounting system avoiding errors in data.
Synder is one of the top solutions on the market that can help sort this problem out. This powerful product gives you detailed and unlimited data synchronization with customizable settings to meet all of your accounting and reporting needs.
Types of Payment Gateways
Payment gateways come in many shapes and sizes. But they are all the same in one regard – they allow you to get paid online.
Here are some of the payment gateways types and their benefits for business:
- On-site payment gateways
Sometimes it is difficult to find an integration gateway that fulfills all of your business’s requirements. For example, the Amazon Pay processing system for the Amazon marketplace. The checkout and payment processing goes completely on their site. The biggest advantage is the extra high level of security. But only very large businesses can possibly afford to create their own custom processing system.
- Off-site payment gateways
Off-site payment gateways are called so because your customer checks out on your site, but the payment processing happens on the provider’s backend. Like in the case of Stripe payment gateway, they collect payment for your product from your customers and they will pay you back within a particular time. What is great about it for merchants is that the provider commits not only to process payments but also to handle other related issues, like disputes or refunds.
- Redirecting gateways
When the gateway takes a customer to a different payment page to handle the complete transaction (i.e. processing and paying) it becomes a “redirect”. An example of redirection is a PayPal payment. On the one hand, it means a second step for a customer. But the process also means less control for the merchant. And on the other hand, small businesses can use a Redirect gateway to incorporate the convenience and security of a major platform.
Choosing the Best Payment Gateway for Your Business
When it comes to payment gateways, there are many different options available and it can be overwhelming to figure out where to start.
In the world of e-commerce, payment gateways help bridge the gap between your website and your customer’s bank account. They provide you with a way to process payments without needing to establish a merchant account or enter credit card information into a third-party app.
Choosing which one is best for you will be different for every business.
Here are some things to consider when choosing the right payment gateway for your business:
- Terms and timing of payouts.
Maintaining a healthy cash flow is necessary for any company. Your business needs to ensure it has enough money to meet all obligations and pay the employees. Will your business have to wait up to 30 days to get paid? What are the terms and conditions of dispute settlements? These and many other points should be considered thoroughly.
- The popularity of the payment gateway.
PayPal is one of the most popular and most used payment gateways in the world. It’s best for small businesses. You can do everything with it. With PayPal, you have a global presence on many platforms and in many countries. PayPal can be connected to all major credit cards and bank accounts. Customers can pay for goods, services, and subscriptions in most situations and at most retailers. PayPal has around 218 million active accounts worldwide.
- Ability to integrate with your operational software.
For your business to operate smoothly, software and platforms integration is a crucial requirement for success. Otherwise, you might need to add a new one or even change your current business software. You will never have such a problem with Synder. This accounting automation product allows you to easily connect as many e-commerce platforms or payment processors as your business needs. It works seamlessly with any platform you are using.
To learn more about powerful Synder abilities, you can schedule a demo with our experts. It’s free!
Payment gateways are one of the most common ways to collect money online. They provide you with a way to process payments without needing to establish a merchant account or enter credit card information into a third-party app.
Choosing the best one for your business is not an easy task. But how many and which payment processors will meet your needs will depend on the types of online business that you have. There are many different payment gateways on the market and you should carefully choose the one that will suit your business needs best.