Introduction
Due to the fact that we are living in such a technologically progressive era, various financial systems have been integrated into many online selling platforms. In order to make sure that these payments go through a secure database that can store the customers’ sensitive information without the risk of a data breach, modernized payment gateways were set up.
The concept of payment gateways were introduced to cater to this rapidly rising trend of online shopping to add a layer of convenience and payment security. Their main purpose is to keep the online payment system in check, enabling users to take advantage of features like online purchases, storing personal and financial information, making the entire process seamless.
However, many different organizations decided to build their own technology, resulting in many different gateways flooding the market. Therefore, it is important to understand the features that are essential to look for in a credible and secure payment gateway.
In this article we will discuss these features in more detail and understand some of the top features for payment gateways.
What Features Should a Payment Gateway Have?
- Recurring Billing
One of the most important features you should look for in a payment gateway is to search for a presence of a recurring billing feature. This feature is handy if you run an online business with a subscription-based pricing model.
Furthermore, the payment gateway should be from a provider with information storage capabilities. It can save the customer payment details on the website to provide them with an easier, quicker process when performing future payments.
In addition, another feature that the payment gateway should contain in accordance with recurring billing is the ability to automatically charge your credit cards whenever it is time to renew your subscription so that you do not have to enter your card details every time.
- Integration and Invoicing
In addition to providing users with the ability to automate recurrent purchases, another feature to look for in a payment gateway is integrating with different software, further extending its capabilities.
Through third-party software integration, you can sync the payment gateway on your site with different accounting and invoicing software, which could further organize the system.
The way it further elevates the payment system is that, in the example of being integrated with invoicing software, the gateway would be designed so that whenever anyone decides to make an online payment, the gateway would generate an online invoice which would be sent over to the customer’s email address right at that instant.
The main selling point behind this feature is that it essentially automates and keeps track of all payments made, saving you the hassle of maintaining a record for each purchase.
Furthermore, the invoicing software is designed so that all of the information about the transaction is forwarded to the accounts department as soon as the payment has been made.
- Encryption
Since this entire system sits on a digital framework, and very sensitive financial information such as personal customer information and credit card details are saved there, it is imperative to consider how much security the gateway provides.
To properly assess the security offered by the payment gateway, it is vital to understand the encryption standards set by the gateway because the higher the standards, the stronger the overall security.
Payment gateways are mainly responsible for processing your purchase, which requires sensitive financial and personal information. The slightest breach could compromise essential details, which could greatly damage the company’s reputation in the market.
Furthermore, payment gateways backed up by solid encryption techniques and methods tend to positively impact your capital, in the form of comparatively lower processing costs, due to them being less susceptible to a possible data breach.
In addition, a payment gateway secured by advanced encryption methods would allow itself to be integrated with a much wider variety of accounting and invoicing software.
This increased third-party software compatibility would have an overall positive impact on user experience as well. More opportunities to integrate with helpful programs would further automate the online payment process, resulting in fewer human errors and more efficiency.
- Hosted or Non-hosted?
A payment gateway can either be hosted by a third party which may be offsite, in which case the consumer is redirected to the actual processor’s platform, where they would have to enter their details to proceed with the online payment process, or not hosted, where the customer would not be redirected to any other processing platform.
Due to the different natures of these modes offered by payment gateways, they have their benefits and setbacks.
One notable advantage offered by payment gateways that offer to host is that the sensitive payment information is recorded and stored in some offsite place.
This further reduces the chances of information leaks and data breaches because even if the breach occurs, the data is not stored on the website, which means the sensitive data stays safe.
However, a considerable drawback in the case of opting for a hosted payment gateway is that it provides a negative user experience because the consumer would have to be redirected to another site, adding another step to the online payment process.
Not only does this make the process more cumbersome, but glitches or technical errors are also possible when the consumer is being redirected to the processor’s webpage, which may cause the consumer to become, resulting in a possible loss of sales as well.
- Pricing
When looking around the market for possible payment gateway providers whose services you wish to avail of, it is important to consider the pricing they offer.
Pricing models offered by payment gateways usually consist of three different fees: the setup fee, a transaction fee, and a monthly fee for availing the services.
Due to this, it is essential to consider how the pricing for the gateway is set up before making a decision. To sign up for the most cost-effective and economical gateway provider, you need to take variables such as how many transactions you entertain in a day and the value of those payments.
Usually, a payment gateway would charge a competitive transaction fee, and opting for such a provider is best for online selling platforms, consisting of transactions lower in value but higher in volume.
However, suppose your business primarily consists of high-value payments and not volume. In that case, it is best to go for a payment gateway that offers a static monthly fee at lower transaction costs.
- Types of Cards Offered
Although most payment gateways allow online payment through Visa, Mastercard, and Annex credit cards, there may be instances where most consumers make online payments through a different card or a debit card, in which case you would have to find a gateway accordingly.
If you own an ecommerce platform that operates in different countries, it is a great practice to research some of their local payment options before making a decision.
This is because some payment gateways have started to introduce local payment options, such as certain digital wallets, which you should also keep in mind.
Wrap-Up
Due to the sheer number of payment gateways in the market, the importance of choosing the right gateway cannot be understated.
If you do not opt for the right payment gateway, you can face difficulties such as a lack of multiple payment options, including credit card or the online application payment.
Certain payment gateways do not have incredibly strong digital security methodologies backing their database up, which could also lead to a possible data breach. Choosing the right one for your situation can make the difference between a smooth payment system and a clunky mess.
