It’s safe to say that there are a lot of online stores out there on the Internet, and this is growing at a phenomenal rate of 20% YoY. So how do internet retailers choose which shopping cart technology and payment gateway service to use? Some argue that setting up a payment processor or payment gateway service on an eCommerce site is a simple task, but there are many who don’t even know where to start. If you’re a payment processor targeting businesses who want to ‘get online’, it’s worth taking note of the five factors below; these are some of the most frequently asked questions on business forums. And if you’re said business that wants to ‘get online’ and set up an eCommerce site, here are 5 factors to consider when selecting your payment provider:
First of all, there are two things to consider. You need to ask yourself: do I want to set up my own merchant account and a payment gateway separately? Or would I prefer to have an all-in-one payment service that will do both? Let’s break them down.
Your merchant account is a supplementary a bank account, in which the money from transferred payments sits in before being transferred to the company account. The payment gateway is the online equivalent to a POS terminal, i.e. what processes the transactions from your website.
Some payment providers offer a combined merchant account with a payment gateway service. Examples of companies that offer this service are PayPal, and Stripe Payments.
There are pros and cons for either route you decide to take. It’s argued that be setting up your own merchant account, you have greater control over it, and the risk of security threats are lower because of fraud protection from the bank. However, setting up a merchant account can also be complex and cost per transaction may be higher than availing of the all in one service where you are using the payment provider’s merchant account.
Although it may seem like a silly question, it’s worth asking yourself! There are a multitude of different eCommerce platforms out there that cater to different retailer needs. If you’re going down the path of setting up your own merchant account and availing of a payment gateway service, you must be certain that the platform your website is built on will be compatible. For example, Shopify has listed its direct and external payment gateways here.
Research from Ventureburn, Wordstream and Forbes indicates a direct correlation between a lack of payment method variety and high cart abandonment rates. Shoppers expect to be given a certain amount of choice when it comes to payment methods, the heavy hitters being Visa, MasterCard, and PayPal. However, Apple Pay and Google Wallet are becoming increasingly popular among mobile users, particularly younger shoppers. This is worth noting, as online spend from mobile devices is on the rise, with a $12.7 billion coming from tablet and smart phone users over the holiday period in 2015. This increase in mobile spend is also possibly why we can see a shift towards more seamless checkout processes that are less time consuming.
Fraud prevention is big business, and there are a number of agencies out there dedicated to helping eCommerce sites reduce cyber threats. The PCI DSS (Payment Card Industry Data Security Standard) ensures that any company processing credit card transactions offers a secure environment. As well as piece of mind, this is a mandatory requirement, so make sure that the payment processor you choose is PCI compliant.
You should also obtain a SSL (Secure Socket Layer) certificate. This will protect any login credentials or payment information of your customers, if the transaction process is happening on site. This is important, both for your own security and your reputation. Customers won’t feel comfortable shopping on a website if the information they provide isn’t secure.
Last but not least, you should consider the reliability and reputation of the payment provider. You want to make sure that the customer journey is seamless from ‘Add to basket’ to ‘Thank you, your order is complete.’ Research carried out by Neil Patel has revealed that issues during the checkout process were reason enough for some shoppers to abandon their carts. Some of these issues included:
Ensure that the provider you’ve selected is customer friendly and reliable with its service. Most reputable providers will be, but it’s worth doing some research beforehand just to make sure. This is especially true for any payment provider that you may not have heard of before. We suggest to also check out what other eCommerce sites are doing.
Forums such as Quora and LinkedIn groups are very useful in finding answers and obtaining useful insights from like-minded individuals.
Your ultimate goal is to have a great eCommerce site, with lots of happy shoppers. By carefully considering which payment provider to use, you’re already one step closer to making that happen!