Dropshipping is one of the most well-known and popular models for online business. It comes with a number of advantages – low start-up costs being the prominent one.
In 2020, the estimated value of the market for dropshipping e-commerce was 128.6 billion U.S. dollars globally. Over the six-year period between 2021 and 2026, the value of the market size was forecast to grow to 476.1 billion U.S. dollars.
A payment gateway is a very important part of the dropshipping business and hassle-free payments are largely responsible for its success. What features in a payment gateway are best suited for this model?
Here’s an article that will help you choose the right dropshipping payment gateway for your business.
What is Dropshipping?
Dropshipping is a retail e-commerce method where the inventory is not stored by the seller. It is instead purchased from a third party vendor and shipped directly to the customer upon receiving an order.
The seller is hence not directly involved with the items, their packaging or even logistics in most cases.
When an order is placed on the website or app, the dropshipping retailer processes it and forwards the details to the wholesaler/third party vendor.
The order is then packed and shipped directly to the customer by the wholesaler. The retailer earns a percentage of profit on each sale.
Some of the primary benefits of dropshipping include:
Minimum investment since sellers do not need to invest in a setup to store the inventory or hire resources to manage orders.
Scalable model because it can be quickly expanded without depending on many external factors or funds.
No inventory management as it is outsourced to the vendors who in turn ship it to the customers.
Product offerings can consist of a wide range of items and new categories can be easily introduced to the business.
A flexible model considering the business can operate completely online from any location.
How to choose a payment gateway for dropshipping?
1. Easy integration: It should simplify the integration process for you with the e-commerce platform of your choice.
2. Competitive rates: The Merchant Discount Rate or MDR should be reasonable for your business to be able to optimise profits.
3. International payments: The solution should be able to allow international payments when you decide to expand your business.
4. User experience: The payment gateway should be able to offer a convenient experience to your customers during the transactions.
5. Settlement period: You should be able to receive the payment into your account in a minimum time period to avoid the funds being blocked.
6. Payment options: The payment gateway should be able to offer all the available online methods of payment to your users.
Also read: Online Reseller Business in India: All You Need to Know
Why is Paytm Payment Gateway ideal for the dropshipping e-commerce model?
Paytm Payment Gateway is trusted by the country’s leading unicorns, established enterprises as well as small and medium businesses owing to the range of features and functionalities it offers. Here’s how it makes payments seamless for the dropshipping business.
Integrations with e-commerce platforms: Paytm Payment Gateway offers integration with more than 30 e-commerce platforms/plugins such as Magento, WooCommerce and Shopify.
Charges: With zero charges on setup and maintenance Paytm Payment Gateway also offers a custom pricing plan specially designed for enterprises based on their scale.
International transactions: Paytm Payment Gateway supports 100+ currencies and enables real-time currency conversions to ensure transparency in the transactions
User experience: Being a white label payment gateway, you can integrate your brand on the checkout page and personalise the payment experience for your customers.
Timely settlements: Paytm Payment Gateway offers a default settlement cycle of T+1 on business working days in addition to batch and real-time settlement options based on your business needs.
Payment methods: Paytm Payment Gateway has more than 100 payment sources for buyers to choose from and is the only payment gateway to offer fixed deposits as a payment source.
Additionally, some of the other attributes that make Paytm Payment Gateway a suitable solutions partner are:
Industry best success rates with 250mn+ saved cards, 100mn+ saved bank accounts and 15mn UPI IDs that enhance the decrease transaction time and increase success rates.
PCI-DSS Level 1 compliance with SSL certificate and a dedicated team of 200 cyber security experts to ensure secure payments.
99.99% uptime and capacity to handle high traffic and peak loads, processing up to 3000 transactions per second.
Powerful merchant dashboard to track sales, conversions, and success rates, transaction history, settlement reports and refund details.
Also read: Real-time Bank Settlement with Payment Gateways: Is It Possible?
Conclusion
The dropshipping model is the first step to entrepreneurship and can help you establish a strong business online. Its ease of execution differentiates it from the other types of e-commerce models.
However, for a successful dropshipping store, it is also necessary to collaborate with the right partners, whether it is the third-party vendors/manufacturers or a payment solution provider.
Paytm Payment Gateway with its aforementioned offerings can be the most suitable solution for your dropshipping store.
