When applying for an e-commerce merchant account with a payment service provider, your website will…
Which is the best payment gateway to use for your online business? Many businesses struggle with this issue. All things considered, payments gateways and online payments can be daunting for the newcomer.
With many payment gateways to consider, it can be hard to make the right choice. Let us help you choose by going through what makes a good one.
What is a Payment Gateway?
A payment gateway is the broker between your online business and the acquirer that gets the payment from your customer. When a customer enters their payment information, the payment gateway processes and passes on that information securely.
A payment gateway also protects sensitive cardholder data using encryption. This ensures a secure experience for the end user.
All this happens in the background when a payment takes place on the Internet. This is an essential part of making e-commerce work. If you're an e-commerce business, you will need to use a payment gateway of some kind.
What Does The Best Payment Gateway Have?
The best payment gateway must be compatible with your ecosystem. Let's talk about two different elements when it comes to integration.
- Compatibility with your software platform. Are you using an off-the-shelf platform such as a shopping cart (e.g. Magento, WooCommerce, Shopify) or a commercial CRM (e.g. Salesforce, Limelight, OrangeCRM)? Make sure the payment gateway you intend to use is integrated with that platform.
- Direct integration options. If you are using a custom software platform for your online business, make sure the direct integration option is something you can implement, whether it be a hosted payment page (via iframe or redirect), client-side script for secure collection and transmission of sensitive information, or a direct post API.
- Compatibility with payment platforms. Payment providers and acquiring banks employ core payment platforms which connect directly to the card networks, such as TSYS, First Data, and Global Payments. Other payment providers provide their own connection, in which case you want to make sure the payment gateway can talk to that connection.
Payment Gateway Features
The best payment gateway should have at least the following features in addition to many more:
- Transaction Routing. The ability to route a transaction to multiple merchant accounts can be very useful for larger merchants.
- Payment Types. Make sure the gateway supports the payment types you want (credit cards, echeck, alternative payments) are or if you'll need to employ multiple gateways.
- 3-D Secure. Make sure the payment gateway supports 3-D Secure as an option to reduce fraud, and that the implementation is compatible with your ecosystem.
- Fraud Prevention. Be sure there is a fraud scrubbing tool available with the payment gateway.
- Tokenization. This is the most important feature for any rebilling merchant who wants to be able to rebill a card on file. A PCI Level 1 compliant gateway should be able to securely store sensitive cardholder data and allow you to rebill a card using a unique cardholder token ID.
Payment Gateway Fees
The best payment gateway should have low fees, monthly and per transaction, for transaction processing as well as any of the optional features available. Remember that payment gateway fees are on top of the fees the payment provider or acquirer charges for the merchant account.
Is The Payment Gateway High Risk Friendly?
If your online business is considered a high risk merchant by payment providers and acquirers, it's possible that the payment gateway does not support your business type. Before getting started with any payment gateway integration you will need to make sure that the type of online business you have won't cause any issues down the road.