Skip to 0 minutes and 10 secondsThe online payment platform is pretty important, in my experience. Very important. So we've had problems in the past with our payment platform, and that was really frustrating, because obviously we're losing potential sales. I went with an online payment platform that, for my business, was right, because it was just a percentage of sales. So if I'm not making any sales, it's not costing me money. Speak to people, research, and there are so many out there that are way more affordable than some of the bigger ones. We needed something that was going to support the customer's expectation for security and minimise any potential for online fraud. But I think it's the reality of online businesses in general.

Skip to 0 minutes and 53 secondsSo what we do is we ensure that we have an up-to-date SSL certificate on our site. And we also maintain security policies and processes on the site, being a multi-vendor marketplace. Have a game plan in the event that you have technical difficulties on your website. Technology has a mind of its own, and despite your best efforts or most rigorous instruction, things will likely go wrong.

Skip to 1 minute and 19 secondsAnd it could be upsetting at first, but if you have a game plan in place for when these technical difficulties come about, have a developer on call, have a communications strategy, whether it be via your social media platforms or via your email channels, let the customer or or the user know what's happening on your website. And then just focus all your energies on rectifying the problem and moving on.

Online Gateways and Feedback

Payment gateways (also known as online payment systems) are an important part of your eCommerce website. A payment gateway is a piece of software that helps your online store (shopfront) to securely process the payment from your customer.

A gateway automates the system for you. It will verify the customer’s billing details and funds required for the payment to be successful. It also processes the approval for the transaction by providing the customer with a confirmation email or number for their purchase, and it securely delivers the money for the transaction to your account.

A long time ago, if a company wanted to process transactions online they needed to have a merchant account with their bank. Whilst these merchant accounts are still available (and usually adopted by larger organisations), there are now more streamlined ways for smaller businesses to transact online.

Modern payment gateways (for example PayPal), that are suitable for smaller transacting businesses, have taken the stress out of processing online transactions.

Payment gateways that do not require a merchant account, have the advantage of being simple and easy to use and access - there is no need to set up a merchant account, and integrating a link into an eCommerce site is quick and easy. However, there are also disadvantages, such as potential for high per transaction charges, and the need to send your customer off-site to make the payment.

However, if you aspire to be a larger transaction store, other payment gateways that do require merchant accounts may be more suitable for your needs.

Depending on the type of transactions you are processing, some merchants may consider you a high risk. Whilst you may not think you are a high risk, it is important to understand the level of risk your product or services is considered from a merchant perspective. For example , if you are a business that will be selling a product or a service that has a high probability of fraudulent transactions occurring, or can be affected by factors you can’t control, this may classify your business as a high risk from the merchant standpoint.

Consider the following steps when selecting your payment gateway (in consultation with your web developer):

  • Determine whether you want a payment gateway that has a merchant account, or one with no merchant account requirements
  • If you want a payment gateway that has a merchant account, identify your risk level and select an appropriate merchant.
  • Consider if you want to integrate the payment gateway into your website (i.e.keep the customer on your website while using the payment system) or send them off site to complete the transaction
  • Investigate the payment gateway that best complements your chosen eCommerce platform (not all platforms support all payment gateways)
  • Look at the pricing options available and ensure the ongoing costs fall within your budget
  • Carefully review contract lengths offered by each payment gateway
  • Select payment gateways that are well known, offer secure payment processing and have limited outages
  • Consider additional payment options available within the payment gateway (for example, does the gateway allow for recurring payment if you offer subscriptions)
  • Consider payment gateways that respect privacy and do not require sign up for your customer
  • Consider gateways that provide multi-currency options
  • Evaluate payment gateways that accept a selection of payment options (credit card, debit card, PayPal etc.)
  • Consider the user experience (test what experience the customer will have when making a purchase using the gateway).

Remember, one size does not fit all and it depends on the volume and average transaction value when selecting your ideal payment gateway. Of course, you can consider starting with one payment gateway, and switching to another, but that is fraught with issues. Careful planning and understanding of the differences between gateways is recommended before launching your eCommerce site.

Reflection:

Take a look at some of the types of products and services that would be considered as potential high risk and low risk merchant accounts via the See Also at the bottom of the page.

Is your business idea low or possibly high risk when it comes to choosing a payment gateway?

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This video is from the free online course:

Online Business: Planning for Success

RMIT University