How to Choose a Payment Gateway?

Online businesses are seeing a boom at the moment as more and more people are looking to shift their businesses online. Practically every day new ecommerce websites are being launched selling different products and services.

If you too are in the process of setting up your online business, there are a few key things that you will have to sort out before becoming fully functional. Accepting payments from your customers online is a crucial part of the entire business and you need to make sure that you have everything in place for its smooth functioning. And for that, the right payment gateway makes lives easier for both the customers and the business owner.

What is a payment gateway?

A payment gateway is an online service that allows merchants to accept credit cards and electronic checks over the internet. It provides a secure connection between the merchant’s website and the consumer’s financial institution.

It is an app that authorizes payments for online businesses through various modes like Net Banking, Credit / Debit Cards and online Wallets. A payment gateway provides a direct connection between a website and a bank, which means that payments can be made directly on your website by end-customers and it gets deposited straight into your current bank account.

How does a payment gateway work?

The primary function of a payment gateway is to provide a secure, integral link between a website and the bank. Once a customer enters the payment details on the website, the payment gateway receives them and forwards them to the bank for verification.

The bank acknowledges this and replies with a response – it is usually either accepted or declined. This information is then sent to the web server by the payment gateway. After this process is complete, the customer gets to view the appropriate message whether it be a success or a failure.

How to choose the right payment gateway?

It depends on many factors, including the type of business, the products or services being sold, the target market, and the desired payment methods. While making the choice, also keep the following points in mind:

1. Digital security: The first and foremost offering you should look at is the security. The gateway you select should be absolutely secured for the benefit of both the customer and you. With so many online frauds being reported on a regular basis, it becomes your priority to check and double check how each gateway works. The highest level in card data protection is achieved by a gateway if and when it complies with the PCI DSS; your priority should be to choose a company that has this in place. Check on the fraud prevention tools that they have. They should provide data encryption and strong fraud detection mechanism.
2. Onboarding Timeline: A big pain point in the payment industry remains the large onboarding times which payment gateways take in order to secure approvals for merchants to use their facilities from partner banks. There have been regular cases where these times have spread out to 2-3 months which is detrimental to your business goals. Always look for payment gateways who can deliver in at most a week plus minus a few days as per your business model.
3. Ease of Integration: When choosing a payment gateway, check how easy and merchant friendly their integration is. Is their documentation available online? Do they support the shopping cart plugin you need? Do they have mobile SDKs available? These are crucial as you are already running short on developer bandwidth and nobody likes to spend days or weeks on integration for payment gateway when instead you could utilise that time for building great products. Also, check how responsive their technical integration teams are, which would help you to expedite the integration and start accepting payments straight away.
4. Mobile optimisation: As people are experiencing the digital revolution, they are opting to shop online through their smartphones and tablets apart from computers. The gateway that you select for your site should provide a solution that will enable your customers to shop hassle free from their respective gadgets. One key feature is the ability to process transactions at 2G speeds which suddenly opens up your business to Tier 2 and Tier 3 areas. This is not something which can be offered by older payment gateways as their technology is often not upto the standards.
5. Customer support: A company is successful when it understands that customers are the sovereign. The way you provide support for your customers on your ecommerce website, likewise the gateway you opt for should have a customer support helpline that provides 24/7 support. You’re dealing with monetary transactions here and are very sensitive hence your service provider should be accessible at all times. Their turnaround time should be as minimum as possible. The nature of the support should not be just limited to acknowledgement of the problem, which seems to be the market standard, but to resolution as well. The more in-depth service that a company provides, the more costly it gets; you should keep that in mind.
6. High-risk business: A lot of payment gateways generally shy away from working with high-risk businesses. They are termed so depending on their business segment. Some of the businesses that are considered high-risk are:
   • Tobacco
   • Technical Support
   • Gambling
   • Travel
   • Adult content
   • Debt collection
   • Diet programs
   • Online Marketing
   • Credit repair

In case your business comes under any of the high-risk ones then you might have to look for gateways that are okay to work with such businesses.

7. Pricing: This is the final thing that you need to consider before taking the plunge. Compare the prices of different payment gateways and see which one gives you value for money. There are some that have a purchasing fee and then a subsequent monthly subscription fee in addition to the processing fee each time a transaction is made. Conduct an in-depth research and see if you can do away with the monthly subscription fee or the processing fee because you’ll tend to pay more with each purchase.Make sure that there are no hidden charges before making a commitment. Also, bear in mind that extraordinary low rates are often a sign of inept backend systems and banking tie-ups which will result in lower success rates, frequent downtimes and poor service. Payment represents a space where good performance will eventually translate to better customer retention and shifting of more customers from physical cash on delivery payments to online payments. This will in the long run reduce the burden on your operation, logistics and accounting.

Razorpay is here to help you with all of the above and more. We have an excellent team that offers round the clock support: just give us a call at 1800-2700-323 and we’ll get your online.