How to choose a payment gateway that is best for your business

Developing businesses are now quite certain that online payments through payment gateways are the most efficient way to streamline their customers’ payments and improve their cash flow. In addition to making it easy for your customers to pay you, payment gateway also improves your cash flow by reflecting payments instantly.

Paying online requires a secure system that can handle sensitive customer information. This is what a payment gateway does: authorizes payments and charges customers’ credit cards.

Three things are done by payment gateways to accomplish this

• Securely verifying credit card details for customers.
• Maintaining sufficient funds to complete transactions.
• The approval of transactions and the transfer of funds to your account.

These details are handled by encrypted payment gateway servers, so you do not have to worry about holding sensitive customer data.

How do you begin receiving payments?

Three items are required before you can begin accepting credit card payments: a merchant account, a business bank account, and a payment processing system.

A temporary holding account known as a merchant account is used to receive payments from payment processors and subsequently move those funds to your personal bank account. To lower the likelihood of recalled payments, the merchant account temporarily retains the funds. The very initial phase of the money receipt procedure includes setting up these accounts.

There are two different kinds of merchant accounts, each of which manages funds differently.

Dedicated account: Dedicated accounts are made just for you and work like bank accounts. There is a lot of underwriting required before opening an account for you, and the account provider usually conducts a risk evaluation before offering you an account.

Aggregate account: In an aggregate account, your funds are kept in a pooled account alongside those of other businesses. Although they are simpler to use at first, you have less control over them and cannot bargain for lower transaction rates. It is perfect for e-commerce companies.

There are now a few “modern” gateways that you can use without necessarily opening a merchant account. You don’t need to open a separate merchant account because these payment processors already have one built in. The only drawback is that they cost a little more money. In addition to PayPal, Stripe, and Braintree, there are more gateways.

When selecting a payment gateway, keep the following in mind

Cost

When choosing a payment gateway, you should put the whole cost of your purchase first. The three sorts of charges associated with using a payment gateway are the setup fee, the monthly fee, and the transaction fee.

Permitted card types

Visa, MasterCard, and American Express are the most common credit cards that are available. The majority of payment gateways accept all of these card kinds. However, you must confirm that your payment gateways handle any additional card kinds that your clients frequently use to pay you, such as debit cards or Diners Club cards.

Holding period

Despite the fact that payments are typically authorized practically instantly, it takes a few days before the funds are transferred to your account. This makes it possible to process chargebacks and refunds. These holding periods could be anywhere from one and seven days, depending on the payment service provider. Depending on your cash flow, you can decide whether to wait or receive payment right now.

Support for multiple currencies

Make sure your payment gateway can process payments from numerous countries and in different currencies if you conduct business worldwide. It is important that you allow your customers to pay in their own currency. You should also be aware of any costs that are associated with the transfer of foreign currency.

Recurring charges

You must choose a payment gateway that can manage all the moving elements involved in recurring invoicing if you run a subscription-based business. Any supplier you pick must have the ability to save and save customer information for upcoming purchases, automatically charge credit cards in accordance with predetermined subscription schedules, and provide retry options for unsuccessful transactions.

Hosted vs. non-hosted

A payment gateway may be hosted off-site or may not be hosted at all.

There are both advantages and disadvantages for all of these hosting solutions. However, making use of a gateway that is hosted by another is better because it helps reduce the risks of hosting sensitive data on your own domains. Although this is a significant benefit, the drawback is that sending your consumers to a different website lengthens the payment process by one more step.

Security

Since you’ll be storing sensitive financial information when you take payments online, the security of your payment gateway should be a major concern. Remember that various payment gateways follow various security requirements. The gateway you choose must adhere to PCI DSS level 1 criteria. To safeguard your company from unauthorized transactions, several gateways include fraud detection and other types of screening capabilities.

Support for mobile payments

Nowadays, the majority of consumers shop online using their smartphones and tablets. Thus it’s critical to choose a gateway that accepts payments from these devices as well. This will enable your customers to pay you no matter what type of device they are using.

Limits

Some payment gateways have a cap on the number of transactions you can handle in a given month. Small firms might not experience any issues with this. However, if your company handles a lot of transactions or sells high-value goods, you should be aware of any such restrictions, given that you might lose clients.

Arrangements with other systems

Last but not least, it’s important to think about if your payment gateway can integrate with your accounting or invoicing software so that whenever an online payment is made, the related invoice will update automatically in your bookkeeping system.

We sincerely hope that this essay helped you significantly reduce your options. Contact our specialists if you have any additional queries so they can assist you in selecting the best payment gateway.