E-commerce business is rapidly growing in India. Small and big merchants are shifting their business online. If you are thinking of starting your e-commerce business, you need a payment gateway to accept online payments from customers. Payment gateway not only allows you to accept online payments but also lets you manage your transactions with ease and track your sales volume. With plenty of information available on the Internet, choosing the right payment gateway for your website can be a little confusing. Let us understand the concept of a payment gateway.
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What is a payment gateway?
A payment gateway is a mediator between a merchant and a customer that provides payment options and allows the customers to make the payment. It is a third-party that enables the customer to pay and let the merchant accept payment in a safe and secure environment. In simple words, it is just like how you make the payment at any physical store by swiping the card. The difference here is that you are making a digital payment on the website.
How does a payment gateway work?
Step 1: By submitting the order, a customer places an order on the website. Clicks on the “Buy Now” button.
Step 2: Merchant sends the order information to the payment gateway. The customer makes the payment with their preferred payment mode. The transaction is routed to the payment processor for authentication.
Step 3: After successful authentication, the transaction is authorized or declined by the issuing bank depending on the funds available in the customer’s bank account.
Step 4: Payment gateway conveys a message to the merchant.
Step 5: The issuing bank settles the amount with the payment gateway. Then, the payment gateway makes the settlement of the amount to the merchant.
Following are a few parameters which one should keep in mind before selecting a payment gateway service:
Important Parameters while Choosing a Payment Gateway Service
1. Onboard Time
Getting started with the formalities of payment gateway for your e-commerce business shouldn’t be a hassle. There are a few payment gateways with a time-consuming onboard process that takes almost a month to approve your merchant account. Sometimes you might have to submit a long list of business proofs or physical documents. Now if you are new to the e-commerce business, this delay might affect your sales volume. Choose a payment gateway that has fast onboard services like almost takes less than a week to approve the merchant account. Also, the document submission and verification process should be online.
2. Digital Security
Online payment frauds such as phishing, identity theft, data security breaches, and hacking are increasing day-by-day rapidly. Hence, it is important to be sure that the payment gateway you use provides high-level security. You should check with the security measures they take to prevent any kind of fraud. The one thing that should be in your checklist while you look for security measures is PCI DSS Certificate. A PCI-compliant payment gateway provides a valuable asset that informs customers that it is safe to transact with your business.
3. Ease of Integration
It is crucial to check whether the payment gateway supports your website or app platform. Does it have a plugin for your shopping cart? Does it have mobile SDKs for your app? Do they provide technical assistance? If your answer is yes, you can go ahead with it.
4. Payment Methods
Having multiple payment options makes it easy for your customers to complete the transaction with ease. Some customers like to pay with a payment option that provides them cashback offers and discounts. Select a payment gateway that has all the payment modes to give your customers a hassle-free payment experience.
5. Settlement Period
The settlement period is the time frame within which a merchant receives the money paid by the customer for the purchase made on the e-commerce store. Decide your settlement period. You might have to pay extra if you need your amount in less settlement period. Most of the payment gateways have settlement time of T+1, T+2, and T+3, where T stands for transaction date plus no. of days.
6. Customer Support
Your account is approved, and you have integrated the payment gateway on your website. But what if you are stuck with an issue and you are not getting the support from your payment gateway company? The gateway that you select should provide a single point of contact to solve your issues. Their turnaround time should be less. They should be accessible 24×7 through email and chat. After all, customer support can make or break the reputation of the company.
Your last priority should be pricing. Compare the pricing of all the gateways and see which one fits your budget. There are a few payment gateways that charge annual maintenance fees and set up fees. Ensure there are no hidden or any extra charges because that can kill your profit margin. Also, conduct an in-depth search if they provide any customized rates for particular transactions.
PayKun has all of the above and more that you need to accept online payment for your e-commerce store. Check out their website for more.