Starting an ecommerce store is just different from opening a physical store. Physical store might require store space, some electronic requirements etc., Ecommerce is just different and it does not requires store space to start its operation. But the checkout process is similar to both estore and physical store whereas physical store requires POS terminal to charge customers and an estore requires a payment gateway to charge its online purchasers. This article describes on how to choose the right payment gateway for your ecommerce store.
1) Difference between Merchant Accounts and Payment Gateways
A payment gateway is the one which approves or declines your online payment such as debit card and credit card payment and even paypal payments. There is a bit confusion between Merchant accounts and payment gateways by some people. The role of the payment gateway is to either decline or approve the transaction but the merchant account is the one where your funds are being held before being deposited into your bank account.
2) Your Budget Constraint
It is important to your budget in mind before choosing a payment gateway for your ecommerce store. Fees might differ from one payment gateway to another. Common fees structures include set up fees, monthly fees and transaction fees. Some payment gateways only charge a transaction fee and some may charge a monthly fee. You need to research and find a good payment gateway which fits under your budget.
You may think that 1% transaction fee may be very less. But imagine if you are high volume retailer, lets say you do a transaction for $50,000 a month , if you need to pay 1% transaction fee then that amounts to $500 a month. So do a thorough research before you opt for a payment gateway.
3) AntiFraud Features
Fraud detecting is one of the tough reality faced by all online business nowadays. So, you might need to choose a payment gateway which provides maximum security options. As a base for detecting frauds your payment gateway should posess a data encryption and in addition is to ask for CVV verification and transaction billing.
4) Types Of the Product To Sell
You might be denied from some of the payment gateways if you sell some prohibited items. So, make sure before signing up with a payment gateway check their list of prohibited items and then sign up with them.
5) Your Checkout process determination
Actually there are two types of payment gateway. Hosted and Nonhosted.
Hosted Payment Gateway
One of the best example of the hosted payment gateway is paypal. Hosted payment gateway will take your customer off from your stores’s checkout page once if the customer makes the payment the customer will be redirected back to the store.
NonHosted Payment Gateway
A nonhosted payment gateway is the one which allows your customers to enter credit or debit card information directly in your checkout page without redirection to another page.
The above are the well known techniques to choose a right payment gateway for your business. Keep the above things in mind and choose the right payment gateway and rock in your ecommerce business.