From the first documented online purchase in 1994, the world of online shopping has evolved immensely over the years. In fact, this year, e-commerce sales are expected to reach a staggering $4.2 trillion, according to Statista.
With the pandemic going on, online shoppers are set to increase rapidly as more people prefer to satisfy their shopping cravings without going outside their homes.
As a business, you have the opportunity to increase your sales and sail through these tough times by going online. But if you want to make this setup work, you need to find a good payment gateway to keep transactions secure and protect your customers’ data.
What is a payment gateway?
Chances are, you’ve used a payment gateway at some point. This is a type of merchant processing service that deals with credit card payments on your behalf for your website and even your physical store. Think of it like your electronic cash register where all payments go through, only that it has to be more convenient and secure since transactions are done online.
How does a payment gateway work?
With a payment gateway, a transaction can be done within just a few seconds. After a purchase is confirmed, the payment gateway will take the first step of encrypting the data that’s transferred between the user’s browser and the retailer’s server.
That ensures that no other parties would be able to get important data from both your business and your customer. The next step is for the payment gateway to send an authorization request to the customer’s bank to approve the credit card transaction.
This is done within just a few seconds and once the payment gateway gets the approval, the final checkout process is then done.
Aside from processing payments, some payment gateways also screen orders, calculate tax costs and do other functions depending on their provider.
What should you consider when choosing a payment gateway provider?
Since a payment gateway is a crucial tool for the success of your business, you have to be smart when choosing the right provider by looking for these factors:
- User experience. More than anything, you have to make sure that your customers get the best experience during a purchase with the help of your payment gateway provider. Ask for recommendations, read reviews and do your research to know more about user experience.
- Speed. No customer would wait for a long time to check out orders. This is why processing speed is critical because any delays could lead to increased cart abandonment rates that could impact your sales and brand negatively.
- Security. Of course, you’d want sensitive data protected and consumers are also more critical in buying only from websites with the right security measures.
- Integration. Instead of just using the typical offsite hosted payment gateway, a lot of consumers tend to lean towards businesses that have their own payment solution integrated to their website. This makes it convenient to process payments and builds trust with a retailer.
Having the right payment gateway can definitely benefit your business in a lot of ways. So if you haven’t invested in one yet, make it your next step towards improving your business.