How to Choose the Right Payment Gateway for Your Online Business

Choosing-a-payment_gateway_for_online_business

Do you know the number of e-commerce websites registered daily in India? Currently, it is more than 1 lakh per day, 25% of which are niche businesses.

Are there an equal number of payment gateways to choose from? Not at all. If you want to select any payment gateway, search for the term ‘payment gateway’ in Google. The top five search results will take you to the most renowned names in the payment gateway industry in our country.

Before we jump to the steps of selecting the right payment gateway for your business, you must understand the need for careful selection here.

The big boom in the e-commerce sector in India

The digital commerce landscape in India is evolving rapidly with time. The market size of the e-commerce industry is expected to reach $200 billion by 2027. Then, the mighty Covid-19 pandemic came into existence, which proved to be an inflection point for the industry.

10_Choosing-a-payment-gateway_Graph

Source: Statista

The pandemic-induced lockdown paired with the movement curbs pushed the demands of online buying to record highs. Backed by a massive smartphone consumer base in the country and cheaper Internet, the Indian e-commerce market has become the biggest beneficiaries of Covid-pandemic.

The need for essentials buying combined with the convenience of online shopping has introduced millions of shoppers to the world of e-commerce, while also bringing an element of ‘lasting trust’ in between. On the other hand, it nudged new sellers towards digitizing their traditional business or starting a new one to have their share of profits from the e-commerce pie.

You might also be looking for the right payment gateway in India to join the Indian e-commerce bandwagon. With predictions that the paradigm shifts in consumer shopping behavior are here to stay, it calls for the need to invest in a trustworthy payment solution for the long term.

If you are in the middle of setting up an online business, you need to consider several key things before your online shop becomes fully functional. Accepting payments online is one of them. Hence, you must know what a payment gateway is and how it works before you zero in on any option. Keep in mind that the right payment gateway is important for your business growth and smooth customer experience.

What is a payment gateway?

A payment gateway is a software or mechanism that facilitates a payment transaction from a customer to your merchant bank account. Not only does it ensure payment, but the technology also captures the success or failure of the transaction and reports the same to both the customer and your business.

Since customers input sensitive information like their credit card details, bank account details, and other financial data, it is essential to ensure the safety of such information. A reliable payment gateway ensures complete safety without compromising on the promptness of payment. A good payment gateway partner should:

  • Verify customer payment details while ensuring encryption
  • Authenticate the availability of funds in the customer’s account
  • Transfer the funds to your account with minimum delay
  • Provide transaction confirmation to both parties

Payment gateway selection – 12 Factors to Consider

Since the payment deals with the most important part of your business – getting you paid – finding the right one is imperative. A safe, efficient and fast payment gateway increases customer trust and keeps the money flowing to your end. Consider the following important factors while choosing a payment gateway for your business in India:

1. Payment security

When you receive online payment, you are asking the customers to enter their sensitive financial information, like card number and CVV. As an online business owner, it becomes your responsibility to handle this information the right way and keep it safe. It is where selecting a reliable payment gateway plays a vital role.

The topmost payment gateways in India are all PCI-DSS compliant. They also invest in fraud detection and screening technology to ensure the safety of all financial transactions. Make sure you double-check the PCI DSS compliance status of a payment gateway and other security measures before choosing it.

Besides this, you should also know the need for PCI-DSS compliance for an online business and the related processes to be followed.

Also Read: What Does PCI DSS Compliance Mean For Your Business?

2. Onboarding process and integration

If your website is all set to go live, for how long can you wait to start accepting online payments via a payment gateway?

Ideally, like any other business owner, you would want the payment gateway integration process to be short and simple. The last thing you would want is to wait for a month or two to get onboarded as a merchant with a payment gateway provider.

Gone are the days when the merchant onboarding process for payment gateways was quite long and cumbersome. Much to your surprise, you can become a merchant with some of the best payment gateways within a day or two, depending on the complexities related to your business.

Always look for a payment gateway that has a short onboarding process.

3. Payment sources supported

Online payments, for many people, implies the use of credit or debit cards only. However, the scope of these payments have widened over time to include other payment sources, like net banking, UPI, and digital wallets.

With the right payment gateway, you can give your customers the flexibility to choose from among different payment sources. Based on their preferred payment method, they are more likely to complete a purchase at your store.

It is thus advisable to select a payment gateway for your business that supports maximum payment sources.

Recommended Read: A Business’s Essential Guide to Payment Processing Methods

4. Customer Support

Running an online business means your targeted customers can buy from you round the clock. It also implies that payment-related issues can arise at any time, for which you need active support from the payment gateway provider.

While dealing with payment queries raised by your customers, your payment gateway provider should be accessible at all times and have minimum turnaround time. This is how you can ensure that your customers have an overall satisfactory experience while dealing with your business.

Hence, you should add this aspect as one of the key pointers to your checklist.

5. Ease of integration

In simple words, the ‘ease of integration’ means –

  • Can you integrate it by yourself?
  • Do you need a professional developer to do that for you?
  • Is the payment gateway documentation easily available online?
  • Are mobile SDKs available?
  • Is plugin support available?

All these aspects, if covered by the payment gateway provider, will help you determine which one to choose.

6. Hosted versus non-hosted platforms

There are two kinds of payment gateways available in the market – hosted and non-hosted.

A hosted payment gateway redirects your customers to the payment processor’s page, where they input their payment details. This reduces the risk at your end as sensitive information is not stored on your website, saving you from the additional effort and cost of safeguarding this information.

Non-hosted payment gateways allow your customers to enter payment details without leaving your website. This increases convenience for them as they do not have an additional step to follow through.

Make sure you consider this aspect and its connection with PCI-DSS compliance carefully at the time of payment gateway selection.

7. Pricing

One of the most important things related to payment gateway selection – pricing. For many businesses, it is just the MDR (Merchant Discount Rate) – the transactional rate charged to the merchants to enable online payment transactions via different payment modes. However, the pricing aspect is not limited to MDR as there are various other payment gateway charges involved.

To sort this pricing part, compare different payment gateways to find out the best one that gives maximum value for your money. These days, payment gateways do not ask for setup or maintenance fees. But make sure you look for any additional charges like:

  • Payment gateway purchase fee
  • Monthly subscription fee
  • Annual maintenance fee
  • Hidden charges

Another crucial tip – do not make a decision on the pricing factor alone. It is because very low rates can also be a sign of inept payment infrastructure and facilities. Digital payments represent a market in which a high success rate will ultimately lead to a high customer retention rate.

8. Transactional limits

You may also come across payment gateways that set an upper limit to the transactional amount that can be processed in a specific month. While this limit may not become a problem for small businesses, it is no less than an unexpected hurdle for businesses that process a significant number of transactions or deal in high-value products.

Obviously, there must be a reason behind setting these limits along with provisions to increase the same as the business grows. The only point is that you should know about these limits (if any) while selecting a payment gateway.

9. Multiple currency support

If you are running an international business or want to spread it further beyond national borders, selecting a payment gateway that only supports Indian currency does not make sense. Sooner or later, you would need to invest your time and efforts in selecting another payment gateway that supports International currencies.

For such a business, it is of utmost importance to let the target customers pay in their currency while you receive the money in your native currency. A payment gateway that can make this possible and even deals with the foreign currency exchange process will be your best bet.

10. Multiple device support

Today, customers use multiple devices to shop online. People may access your website and make purchases through their laptop, mobile phones or tablets. A flexible payment gateway should be able to provide the same ease and access through any device to ensure customer engagement.

11. Settlements

Apart from payment safety, payment processing speed also impacts final purchases. For instance, if a customer gets stuck while making a payment for too long, he/she may get impatient and cancel the order. A good payment gateway provides quick processing of payments for the consumers.

On the other hand, it is also essential for the businesses to receive payments promptly. While choosing a payment gateway for your business, check the settlement period to ensure smooth cash flow. Quick payment settlements will also help you manage refunds and chargebacks effectively.

12. Consolidation of payments

As a business owner, you would want to check the consolidated summary of all the payments received to maintain a healthy cash flow. A reliable payment gateway provider understands this need and provides a merchant dashboard that includes all the payment details.

This will help you monitor and manage your cash flows better, while also simplifying the accounting and bookkeeping tasks.

The final countdown for payment gateway selection

Once you have narrowed down the choices using the checklist given above, it’s still half the battle won. Win this battle by reviewing the entire payment gateway selection process once again. Do this to find out if there is anything left to be considered, how the gateway integration will impact customer experience, and more.

If this final review takes time, it is alright. You would like to spend time selecting the right payment gateway rather than having to change it one after the other.

Payment gateway selection is indeed crucial for your business. Once you are ready to accept online payments, you can go full speed with business growth plans knowing that you chose the right gateway for your business needs.

What Paytm Payment Gateway Has in Store for You?

Imagine a payment gateway that checks out all the pointers above, and provides you with even more benefits. That’s possible and has the name – Paytm Payment Gateway. The trust and reliability of Paytm is packed into this payment gateway to help you grow your business and offer convenience of digital payments to your customers.

What’s more?

Paytm Payment Gateway offers:

  • Widest range of payment methods, including Paytm Wallet and Paytm Postpaid (you won’t get them with any other payment gateways)
  • T+1 settlements, allowing you to get the money into your bank account seamlessly (no holidays will stop you from receiving payments)
  • 0% MDR on UPI
  • Highest success rate backed by 250 million+ saved cards, 100 million+ saved bank accounts, and 15 million UPI IDs
  • A robust payment solution that supports 2,500 transactions per second

Feeling excited to join hands with us for Paytm Payment Gateway? We are waiting to hear from you.

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How to Choose the Right Payment Gateway for Your Business

A safe, efficient and fast payment gateway increases customer trust and keeps the money flowing to your end, making it crucial to choose right payment gateway for your e-commerce business.