Challenges and opportunities of Payment gateway integration
Posted: Sep 03, 2019
No doubt, you must have hundreds of time came across the term "payment gateway" on the internet and on information related to online shopping. Whether you are on your own or not, with your ecommerce or other online payment related business, you must have tried your way out to understand what this term means in the exact sense. You must be having questions and doubts regarding how it works for you.
In technical terms, payment gateway is a technology which easily connects the merchant as well as customers with the payment networks. The use of payment gateway is to collect the information of the client and for approval send it to the bank. Once the bank sends the response back, it is then sent to the website. You can have local bank integration with your payment gateway for increased business sales.
The sensitive information like the merchant & customer's credit card data gets encrypted. It moves through a secure environment through one payment portal to the related bank with guaranteed security.Challenges faced with payment gateway integration and ways to overcome it
Like any other technology, payment gateways face challenges too and the same has been explained below with some solutions.Card data security
For any business or merchant which is accepting debit or credit cards for offline or online transactions, needs to have Payment Card Industry Data Security Standards (PCI DSS) certification. This PCI DSS certification will ensure the businesses or merchants to meet security standards across six areas. They are:
- Protect cardholder data
- Build a secure network and systems and maintain it
- Come up with strong access control measures
- Come up with a vulnerability management program
- Build and maintain an information security policy
- Regularly monitor networks and test it
You will experience slow, expensive and inefficient cross-border payments when using payment gateway integration for your business. Still, it has to be understood that such a thing play a big role in establishing international trade. When we talk about banks, national banking infrastructures is not built in a manner to handle cross-border payments. This results in the non-uniform development of technologies across the places in an independent manner. Such a situation gets complicated by different software platforms, which further stop having cross-border transactions. Recently, new changes are seen taking place in this section of cross-border payment requirements and they are:
- Payments and fees to get regulated by the government led initiatives and mandates.
- The reliance on correspondent networks will decrease by the emergence of transnational systems.
- Credit risks, costs, and liquidity will be managed effectively by payment systems.
- Processing efficiency will increase and costs will go down by outsourcing.
- Multinationals will experience better economies along with consolidated credit risk.
Multi-currency and regional challenges
When we talk in terms of global eCommerce, we are talking about the scenario where we are accepting a variety of currencies and payment methods. Merchants need to compete in the international market and for the same they let their customers make payments in their native currencies. For the same, merchants seek the help of electronic payment methods like mobile payments, e-wallets, and credit /debit cards. Merchants will need to find a room in each national market and with cross-border transactions and multi-currency. They will need new business entities, new bank account and tackle new regulatory hurdles. All these issues can be taken care of by choosing a payment service provider who is capable of offering an immediate and effective solution and has a well-established infrastructure in place. This way, a merchant can easily accept payment in currency and can have the same credited to its parent account in the home currency.Increasing customer expectations
You may be having an amazing eCommerce store in place, but what if your customer expectations are not matching with yours? You may be thinking you are delivering results, but your customers may be having a different view of the matter. Now, this can affect sales and conversions. Whether we are considering an eCommerce business or an online food delivery site, great user experience is what matters. Your customers may be driven away from the site or the application if they feel awkward with the navigation or if the transaction process is slow or they find errors during the checkout process.
You should focus on convenience, simplicity, and choice when you are working on to improve the user experience and reach their expectations. Make it a point you keep the prices transparent so that the users are not shocked at the checkout. Offer them with a wide variety of API hosted payment gateway integration options like debit cards, credit cards, and PayPal whichever they can use to make the online purchases. You should also work towards offering a mobile version for your business to encourage sales. Such steps will work towards reaching increasing customer expectations.Multiple payment gateways -higher costs
If you plan to have multiple gateways for your business, then you will have to take care of multiple contracts, setup, and integrations. This means you will have to spend more time on oversight and yes, paperwork. You will have to keep track of things on the multiple channels as well as monthly pay memberships, processing fees, and transaction costs.
Moreover, to get customer payments, you will have to come up with a merchant account for all the payment gateways. There are some payment gateways which will get you merchant accounts, but then their services are expensive too.
Now, this is the reason why many merchants plan to go for a combined payment processor which will take away all the headaches. Such kind of processor will let you accept different forms of payment and will let you have a single merchant account for all. This way, you will have all the money combined at one place from all the merchants. Such accounts have fewer monthly fees and are a better option to get started. However, they come with a higher per transaction rate.Benefits of payment gateway integration for your store
There are a number of benefits of having different payment gateways for your online business and they have been explained below:Hassle free transactions
When it comes to the checkout, as a business, all you would want is to offer a convenient process as possible. This can be taken care of by having multiple payment gateways. There are increased possibilities of cart abandonment if the customers fail to find their preferred payment method. As per the survey conducted by Baymard Institute, a number of reasons were found behind people abandoning their online cart. Around 6% gave the reason that there were not enough payment methods available at the online store. This was a bulk of active shoppers who just missed shopping for a reason.
Online store owners who are smart go a step ahead to make shopping a convenient affair for the customers by offering support for mobile payments. The sales through smartphones are increasing and the rate is growing steadily year by year. It can be said that in the coming years, smartphones will influence the buying decision of customers and so having proper payment gateway integration services at the place will become inevitable.
The shoppers, especially the millennials and Generation Z, have been seen to have an affiliation towards different mobile payments and mobile payment apps, which lets them enjoy loyalty rewards. So it is important that your business offers some payment gateway which makes shopping a convenient affair for the customers.Higher customer satisfaction and customer retention
Offer your customers their favorite payment method. Shoppers have a preference for specific payment types. Some customers may be interested in building cash back points that come with their credit card while there may be others who are interested only in using Automated Clearing House payment that they make through their phones. Having multiple gateways will let you customize the way customers pay. Hosted payment gateways integrations should be given thought too.
If you are planning to have some other payment methods other than credit cards and ACH payments, then you should think about some factors too. Every store is not the same and so are the payment gateways. This means you need to ask a few questions to know what is appropriate for yours.
- Are you selling high-volume, low-cost products or high-priced, low-volume ones?
- Are you selling digital or physical products?
- Are your customers interested in a specific payment method?
By the answers you get, you will be able to match your products with the right payment gateway for the customers. The right match will lower purchase barriers, increase sales and boost customer shopping experience. Such customers will be satisfied and will keep visiting your store.Increased customer trust with their data
For any payment gateway, safety plays a key role. The main job of a payment gateway is to encrypt the data of the customer and transmit is safely and securely. Before you sign on, you need to make sure the payment gateway is PCI compliant. It is important for you to understand that customer data is your responsibility.
Apart from the security of actual data, having different payment gateways gives a sense of security to the customers. As per Baymard, 19% of shoppers abandon the cart just because they feel that the credit card information is not safe to be shared. However, when you have multiple payment gateways, this issue gets resolved.
Again there are people who feel comfortable shopping from the online store where multiple payment gateways are available. They feel such a store to be safe. Having multiple payment gateways gives out the signal that the site can be trusted. People trust company like PayPal and when you have it, it simply associates trust in the store.You get to make more money internationally
In case you have plans to sell on the international market, you will need many payment gateways which will offer support for local payment options. Payment gateways change based on region, nation, and currencies.
If you plan to get into the international market, then going for multiple currencies will easily help you take care of other currencies. Trust and convenience increases when customers will be able to buy services and products in their own local currency. This means you will need a gateway which can easily convert the amount of the products on the store into local currency for easy process. To make the checkout process more accessible, auto-conversion options are available and this much helps the business with reduced cart abandonment.
Online Payment Gateway & API Integration is more than just a medium to receive, store and transmit the data of customers. Payment gateways say about your website, it ensures others that it is a secured one. When you choose a payment gateway, you need to be sure it is a known brand. People will only use it when they know it well. This means you need to be sure that the payment gateways are the part of the branding process you carry on. They should be able to let others know what your value is, about your company and how you value your customers. So it would help if you were sure that you choose wisely. So don’t be in a hurry to get started rather consider the convenience of the shoppers when having one for your business.
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