How to Choose a Payments Gateway Provider

Thinking of accepting payments online? Great idea. Online shopping is a booming industry across the globe, with U.S. small businesses earning approximately $313 million in revenue from online shopping in 2016. And in 2017, 38 percent of small business owners surveyed said they expect revenue to increase year over year* supporting compelling reasons to get selling online!

To get started, you’ll need to select a payments gateway provider to integrate with your current payment system, build your online shopping cart and process your customers’ online payments similarly to how payments are processed in-store.

But with so many payments gateway providers to choose from, finding the one for your business can be overwhelming and confusing. Here are the top nine things you should consider before making a selection.

1. Your customers’ experience. It’s common knowledge within the industry that offering your customers more ways to pay creates a better customer experience. Great customer experiences lead to repeat customers, which often leads to referred business. Adding an online element is a great step toward creating a positive experience in your customers’ minds.

2. Technology and functionality. Speaking of customer experience, you want to make sure your gateway provider can support the type of functionality (i.e., reporting, emailed receipts) that best suits your business and appeals to your customers. Easy integration is key. Your gateway provider should offer the flexibility that allows you to do business today, AND as your business grows in the future. Look for a provider that is constantly developing new ways to elevate user experience and ease of use.

3. Your business location and incorporation. Where your business is located, and where your provider is located can make a difference in how you incorporate your business, which is what most gateway providers will ask of you. This means there are a different set of incorporation rules for an American business seeking processing service from a gateway provider in the UK, and vice versa. It’s important to know those details ahead of time to get you accepting online payments quicker.

4. Your business model, products and services. The type of business you have is just as important as the type of gateway provider you choose. Some payments processors don’t support businesses and services that are considered “high risk”. Before you make a selection, save yourself some time by making sure the payments processor you choose doesn’t put your business in that category. Examples of high-risk industries are:

  • Gaming
  • Gambling
  • Dating
  • Travelling
  • Adult entertainment

5. Pricing, fees and service value. How much profit do you make on a single sale? What’s your average margin? Knowing your business’ numbers are key when you are negotiating payments processing fees. Keep in mind, however, that the lowest fees don’t always mean the best value for your business. Many providers will boast of lower fees to attract you, but will your site’s look and feel attract customers to you? To get the best bang for your buck, look for a transparent fee structure, hidden fees in the fine print, conversion rate, and value-added services.

6. Technical and customer support. There’s nothing worse than losing a sale because of a technical glitch, or not being able to accept a payment because you’re confused about how your gateway processor works. Be sure the online payments processor you choose offers live assistance from a responsive team or account manager. Hopefully, you’ll never need it, but you want to make sure it’s there to ensure you’re always up and running.

7. Payments security. You may offer the best product or service possible, but if customers don’t feel safe shopping on your site, it’ll be hard for you to make a sale. Your gateway provider should at least meet these minimum requirements:

  • Payment Card Industry Data Security Standard (PCI DSS) compliance on their end.
  • Maximum protection of cardholder data, including card information storing, tokenization, verification from card brands, etc.
  • Tools to help you meet and maintain PCI compliance for your business.
  • If you are unsure about what any of this means, it’s best to do your research on PCI and payments security before you contact a gateway provider.

8. Getting paid and reserve. You’ll want to be aware of how your money gets to you before you choose a payments provider. Many offer daily or weekly settlement options, which will make a difference in how quickly you are able to access your funds. These services may come with additional transfer fees, so be sure to ask for those details upfront to eliminate any surprises. Have you thought about chargebacks? Do you know that as banks get to know your business, they may withhold a portion of your funds for a period of time to account for any fees your revenue doesn’t cover? Get a clear explanation of these policies as well.

9. Recommendations from peers. Who are your peers using? Your competitors? It’s not one size fits all, but you may be able to pick up tips and pointers from fellow business owners who have already gone through the selection process. Consider their advice as you go through your selection process.