As e-Commerce continues to expand worldwide, there is no question that the future remains bright for online sales. According to Statista, the percentage of e-Commerce retail sales was at 16% in the U.S. In the U.K., e-Commerce sales rose to almost a third of overall retail in May 2020.
Alongside the growth of e-Commerce comes the subsequent growth in the number of payment gateway providers. This is great news for online business, regardless of size, since this means they have a greater variety of providers to choose from. Something never seen before. More options mean that payment providers are working more diligently to offer their best services, giving the online merchant more bargaining power.
Although there are more choices than ever before, online merchants still feel intimidated by the sheer number of options. However, a research report compiled by the Mercator Advisory Group called, “Crowded Payment Gateway Landscape Offers Much To Online Merchants, Part 2: U.S. Market Company Profiles”, offers merchants relevant criteria to look for when choosing the best payment gateway.
5 Factors To Consider When Choosing A Payment Gateway
- The Capacity To Scale
All online retailers that are determined to stay in business must be ready to scale. It ensures continued growth and protects from any future financial disasters. The key areas of scalability for an e-Commerce business include processing volume, offering a variety of payment types, accepting cross-border transactions without difficulty, and “transaction latency”.
- Cutting-Edge Security
The online merchant should select a payment gateway that offers state-of-the-art fraud monitoring systems, a 3D Secure function, an Address Verification System (AVS), and an IP Geolocation to fight cyber fraud. Even more critical is that the payment gateway should be Level 1 Compliant with the Payment Card Industry Data Security Standard (PCI DSS). This will ensure that your customers’ sensitive credit card information remains safe and that online merchants will not be vulnerable to cyber-attacks.
- Easy Website Integration
The ability to integrate the payment gateway easily onto the merchant’s website is critical. Integration should be simple. Although some customers may not prefer this, once the customer begins the checkout process and is redirected to the payment gateway site, it is vital that they are redirected back to the original merchant’s website. This will ensure a smoother checkout process.
- Ease of Integration With Other Marketplace Platforms
As the online business looks to expand its “sales channels”, it is vitally important that the payment gateway can be easily integrated with other popular online marketplace platforms.
- Revenue Optimization
The aim of Revenue Optimization is to combine pricing, demand, and marketing strategies to optimize the growth of revenue. It takes taking a careful look at current sales channels, price points, and other areas of the business in order to analyze them and make strategic decisions to maximize profit. The payment gateway could facilitate this by offering B2B invoicing in order to optimize cash flow. Sales data analytics can give merchants a revealing view on customer buying patterns and targeting the best customers.
Choosing A Payment Gateway Could Seem Daunting
If the challenge of choosing the right payment gateway appeared insurmountable, it shouldn’t be. It is important to focus on the critical factors that the payment gateway must offer in order to protect you and your customers from fraud and offer ways to expand your business.