Protect your online transactions with online gateway services and enable a risk-free, secured money transfer for business, eCommerce and merchant sites.
Updated On Jun 2020
How To Choose The Best Payment Gateway for Small Business
Starting any business does require a lot of patience, commitment, and most importantly making the right choices to set up the company in the best way possible. One of the main obstacles that one may come across while setting up their business is setting up their payment methods. Small scale businesses usually go for the cash-only option, but with the digitalization of the world, they too are adopting the online payment method. Therefore, for the safe movement of cash from the customer to the business account, choosing the right all in one payment gateway is essential. The requirements of the gateway service are as follows:
Authorization: Verification of the details provided by the customer
Clearance: Money transfer from the customer's bank account to the user's bank account.
Notification: Recording the transactions, and sending the information to the parties concerned.
How a payment gateway works
For the payment gateway business model to work as intended, the following aspects are essential:
Customer – The person interested in buying the desired product and is willing to pay instantly by their credit or debit card or even from their online wallets like PayPal, Amazon Pay.
Business Merchant – The producer and manufacturer of the goods putting them for sale online.
Online Website/Store – The online website, portals, where the customer can buy their products directly. These websites are usually mobile compatible and do not always have to be accessed by a computer.
Merchant's bank account – The account to which the payments will go once successfully transacted by the customer.
Acquirer – The bank does the work for merchants in accepting payments for them.
Issuer – The bank that provides the card (debit/credit) that the customer uses to make the payment is called the Issuer.
Bank account of Customer – In case the customer doesn't use the bank card, then they can pay directly by filling the bank details of the merchant from their bank.
Payment Gateway – The conduct or also known as a middle man, brings all of the above aspects together to set up a payment gateway service.
Now coming to the working part of it, it all starts as soon as the customer hits buy. Their IP Address and basic login details are saved temporarily in the server until they fill in their bank details or card details. The browser automatically encrypts the details, and the gateway service now verifies the details with the respective bank. Once verified, the transaction along with the IP Address is sent to the bank with the digital certificate to request the exact amount to be paid. Usually, the bank sends an OTP to the customer for verification, and once that is complete, the bank transfers the amount to the merchant's bank.
Importance of Payment Gateway Services
When setting up any service that entails gathering sensitive data, there are a lot of things a business must take care. While in the decision-making process, one might ask themselves this question: Is it that important to set up a gateway service? Is it worth the risk?
Well, in terms of risk, the only one taken is choosing the right service provider. The remainder of the tasks in terms of transactions require minimum effort after setting up. Moreover, the importance of getting a gateway service has a broader answer. It is divided into three main categories:
Setup: The setup of the service is very important. The key things during the setup are less time, more efficiency, and more reasonable and state-of-the-art security. The setup, apart from the transactional security, should also have a plan B action to help the user in case of fraud. It will help them to recover the money and in as little time as possible.
Ease: After setup, the effort and work the user has to put in the service should reduce to a minimum. The user is to be notified only about the transaction, and if the right amount has reached the bank or not, the rest is on the customers who need to fill in the details and pay. A good gateway service with a standard subscription will annoy the user as little as possible and always ensure easy access.
Experience: Experience plays a huge role in choosing gateway services in the first place. It is indeed a very underrated feature of online transactions. The ease for the customers to pay the bill online instantly from their mobile phones does indeed boost satisfaction. So, many obstacles like currency change, less cash, lack of ATMs around, etc. are eliminated.
How to Find the Best Payment Gateway?
Not all business starters have the idea or the knowledge of all the payment gateways to choose, here are some tips and tricks which might help in selecting the right one:
Security: Naturally, the top priority for any online transaction is secure and how safe it is to use. It also matters how secure it is from hackers and spammers. Choosing a payment gateway that at least has a two-step verification or is rightly certified is key here to keep both the money of the customer and the business owner's safe. The important protocols or steps most of the services follow are as follows:
Secure Socket Layer (SSL) – It is the most widely used and even mandatory online protocol for money transactions, most of the gateway services are SSL certified. The protocol encrypts the car data to potentially lockout or confuse spammers.
Payment Card Industry Data Security Standards (PCI-DSS) – This is the security standards the website and the services have to follow to ensure safe transactions for the merchant as well as the user. It comprises a list that contains the various rules/guidelines to secure payment processing information.
Token System – Used for services that give the customer an option to store their card details on the site. This practice is not recommended and has a huge risk of being exploited by users. But, the token system substitutes the details of the input card with randomly generated clusters of strings and characters which can be substituted by the user's computer or mobile for future transactions.
3-D Secure – Most credit/debit cards have this additional password security that can be set up by their respective banks where before completing the transaction, they ask the user for one final password. They are usually referred by various names for different card services like 'Verified by Visa', 'Mastercard SecureCode', etc.
Fast Checkout Methods: As we discussed earlier, the experience of the customer is the main aspect of the whole deal. So, a fast checkout method with minimum hassle but maximum safety at the same time is the ideal service to go.
Reviews: It is always a healthy exercise to research and read reviews of the different customers using the service and their experience to get a better understanding of the service. It is important as it does require a reasonable investment where the subscription amount is high so being smart here is ideal. But usually, a site will boast critical reviews for obvious reasons. Therefore, there are a lot of portals or review sites where users give critical and straight-forward feedback, which helps immensely.
Multiple features and Huge Compatibility: For a business which looks forward to expanding their reach from the local city to other cities or even countries should be able to accept a wide range of cards, wallets and multi-payment service methods. Usually, the transaction via gateways is divided into two parts, hosted or integrated. Hosted gateways are cheaper because the site is redirected to another site to fill in payment, but this may affect the customer experience. Integrated is where the payment gateway method is integrated into the same site, hence making it easier for the customer. But prices for integration are high.
Premium Plans: The key to find the right gateway service is to choose the one having the right number of features for that particular business. Services such as PayU.in are state of the art gateway service providers which give vast options and accept most international payment gateway providers, but the subscription prices are very high. Unless the business isn't outsourcing worldwide or at least to some foreign countries, it is not recommended to invest so much in them. Also, having extra unnecessary features which are hardly used and paying for all of them is not reasonable at all.
Customer Service: A service of any kind boosts its name by the way it handles the complaints/queries of the customers in the least time possible. So, services which usually have a good reputation amongst customers for their reachability in times of problems are the one to vouch.
Few Words To Conclude
It isn't an easy task to choose the right gateway service as the safety of the money is the main reason people usually think twice or thrice. But investing in the payment gateway services does improve QoL (Quality of Life) experience for both users and customers. So, taking the time and deciding is always the safest and the best option.
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