Choosing a payment gateway company for your ecommerce site is not exciting. It’s not glamourous. It’s a bit like balancing the books. A bit of a bore, but it’s essential to get it right!
As a customer, you don’t stop to think who is processing your payment and yet, to an an eCommerce manager or CFO, it’s a absolute necessity to be informed about your gateway’s process of accepting credit cards through checkout.
Recently Hitworks compared Australian Payment Gateway options to help our clients select the best service for the best price. Here’s what we found.
10 Top Tips to Help You Choose the Right Payment Gateway
We approached all the major suppliers and went through our list of requirements with each company.
The results were varied. Some companies were great at mobile payments. Others excelled at local support. Others were really hard to get hold of and didn’t ring us back.
By the end of the process we were able to quickly summarise the good points of every company and provide our clients with the facts they needed to make the right decision for their business.
What’s the company contact like?
Let’s start with the basics. If anything ever goes wrong, the first thing you do is pick up the phone or email.
So who is the contact person and what are they like to deal with? Did you get put on hold for half an hour? Or do you feel like they “get you” and understand your company’s requirements?
This is vital to a good relationship. We often find that if it is not present from the beginning, it won’t miraculously change down the track.
Who are their clients?
You can learn a lot from the list of their clients. Are they similar to your business? Have they been with them a long time? Do they have a high turnover of customers?
If you see similar retailers to yourself on the list, you know that they must be doing something right! With such a vital stage in the online shopping process, businesses will quickly move away from problem payment gateway providers.
We recommend you select 2-3 similar clients and contact them for a reference. This is a quick and relatively easy process which many retailers fail to do properly. At Hitworks, we have a standard set of questions that will uncover any nasty surprises.
Do they have Good Support?
Having 24 hour support with email or phone services is a vital requirement. You want a quick answer from someone who can explain the situation clearly.
Imagine that it’s two weeks away from Christmas at 7pm and your website stops accepting credit cards. Your website support team say that you should contact your payment gateway.
If you can’t contact them and get a quick solution, you can kiss goodbye to your Christmas bonus!
Contract terms can be 1-3 years. If there is any problem with your payment gateway, you need to get a new solution fast. You can’t afford to have any problems with accepting credit cards online.
If there are constant outages, or you cannot get a solution to a major problem, you will need to change service providers fast. So you either take the hit and pay out the year, or stick with it until your contract is up.
A month by month contract also has its disadvantages. There is not the leverage when negotiating on price. But you can move quickly if there is a problem with the service. Which is more important to your company?
Are you looking to improve your eCommerce website or upgrade technology soon? Let’s face it; almost all of us have a project that we are starting, in the middle of or just finishing!
It is vital to review API compatibility for the technology you have or are looking to acquire. For example, we are always talking to retailers who are considering Magento as an eCommerce platform.
The recent rollout of Magento 2 Enterprise Edition has affected many integration projects. Many software service providers haven’t yet written APIs for M2. This may add significant cost or delay to your project.
This is the first thing most CFO’s want to know about a Payment Gateway Service Provider. How much is it going to cost?
Fee structures generally are available in two forms. A fixed fee or a percentage of revenue taken. The best value for your company will depend on you order volumes and average basket size.
Companies who sell thousands of pieces of makeup may get better value from a percentage of total revenue. While companies who have sell bedroom furniture may find a better deal in a fixed fee per transaction.
How important is cashflow to your company? Are you a business who drop ships product or do you buy a year in advance?
The time it takes to transfer your money to your account can make a huge difference to business. Settlement times can range from immediate to days.
Sometimes this will depend on banks and processes. You may need to discuss these points in detail with your sales representative.
The difference between a Payment Gateway and a Merchant Account is not generally well known. Even some of the employees at the providers we talked to weren’t sure!
A Payment Gateway processes the card transaction. A Merchant account holds the money until it is transferred into your account. You will need both to accept credit cards online.
It was surprising to find out how many Multi Channel Retailers have existing Merchant accounts. For settlement and reconciliation purposes it can make a big difference to align online with your 100 bricks and mortar stores.
Now stop smiling and look serious. Nod knowingly when I say that fraud is a very serious business online. It is amazing how fraudsters work these days.
It may be Australians unknowingly working for international criminals or teenagers using stolen credit cards. Customers may get goods delivered to vacant houses. There are many ways to commit online fraud.
If fraud is a big concern for your business then you may want to add on extra layer of protection through your payment gateway. Stronger fraud protection comes as an optional extra and may include deeper international card checks, address checks or email address alerts.
Apart from Visa, MasterCard and American Express, there are many ways of taking payment that retailers may or may not require.
Do you need to handle subscriptions? Does your business require tokenisation? Do you rely heavily on mobile innovation? Do you need ‘buy it now’ buttons in your emails? Do you require pre-authorisation? Do lots of your customers pay with the American Discover card?
If you have any special requirements, it is vital you get this sorted out early in the decision process. Look ahead at your eCommerce Roadmap and list all possible requirements.
Hitworks reviewed all the main Australian Payment Gateway providers and found lots of variation in their products and services, from customer service to technical breakthroughs in mobile and email.
When it comes to payment gateways, you can’t afford to make a mistake. It literally pays not to fall asleep when making this decision.
The team at Hitworks is here to make your life easier and provide the information you need to make vital business decisions. We’d love to hear your questions or comments. Simply email us at firstname.lastname@example.org or comment below.