In recent years, the growing trend of online shopping has brought about significant changes, including the increasing frequency of digital transactions. More and more people are choosing to buy goods and services online, and digital payments are playing a more important role in business than ever before.
The rise of digital payments is expected to continue to grow, at least in this decade. Statista Market Insights data predicts that the value of digital payments will grow at an average rate of 9.52% per year from 2024 to 2028, in line with the growth of global e-commerce consumers.
Therefore, it is important that you adapt quickly to these trends if you want to thrive in today’s business environment. One way to do this is to use payment gateways to facilitate all cashless transactions between you and your customers.
You may have already realized that payment gateways are important tools that can help you grow your business in the digital age. But at the same time, you may still be unsure how to choose the best payment gateway for your business.
In this article, you will find guidance on how to choose the best payment gateway and the factors you should consider when selecting a payment gateway solution.
Why do you need a payment gateway?
As mentioned earlier, payment gateways are a solution that helps you accept digital payments from your customers. However, the benefits of payment gateways go beyond that.
For example, payment gateways allow your customers to make payments instantly using a variety of payment methods - a benefit that can improve the customer experience, increase customer loyalty, and help you reach more potential customers.
Given the importance of payment gateways for scaling businesses, you need to be careful when choosing the right one. You need to ensure that you choose a solution that offers the best user experience and service so that it can adapt to your business growth.
The problem, however, is that some businesses tend to prioritize price over quality when choosing a payment gateway in order to save costs. However, payment gateways that offer low prices may not necessarily offer the best service and user experience.
You need to keep in mind that payment gateways are not a one-time service, as you will be using them constantly as part of your business operations. Therefore, you should consider factors other than price when selecting the ideal payment gateway for your business.
5 important factors to consider when choosing a payment gateway
In general, you can consider the following five factors when selecting the ideal payment gateway for you.
Fee structure and hidden fees
Payment gateway providers usually charge a fee for each successful transaction. These fees vary from provider to provider, so you may be inclined to choose a payment gateway that offers the lowest rate.
However, a seemingly cheap payment gateway can prove costly if the provider charges you additional fees such as maintenance and set-up fees. You may not be aware of these costs at first, as some providers deliberately do not disclose these fees upfront for marketing purposes.
You therefore need to actively ask and check that providers have given you the correct prices and cost components to avoid such hidden charges.
In addition to the hidden fees, you should also find out about the fee structure.
Some payment gateway providers charge a flat fee per transaction, while others offer percentage-based fees. Some providers also offer tiered or volume-based fees that allow you to pay less in fees if your transaction volume exceeds a certain threshold.
To find the best fee structure for your business, you need to know what your current transaction volume is and how many transactions you expect to process in the future. For example, if you expect your business to grow and process a large volume of transactions, it would make sense to opt for a payment gateway with a volume-based fee structure for cost-efficiency reasons.
Infrastructure
A good payment gateway must have a reliable infrastructure, as a stable gateway system can improve customer experience, revenue flow, and business operations. A trustworthy infrastructure will also be beneficial in the future as it will help you process a large volume of transactions smoothly as your business grows.
Therefore, you need to ensure that the payment gateway of your choice has a reliable infrastructure that can meet your current business needs and future growth projections.
In addition, you should actively ask providers many questions about the reliability of their payment gateway infrastructure, such as how often do payment gateway system interruptions occur? Do the payment gateways automate all payment transactions? Do they also offer APIs that can be integrated into your website?
Quality of customer service
The operation of the payment gateway does not always run smoothly. You may encounter disruptions or problems when using a payment gateway. In such situations, you will contact the customer support of the payment gateway provider, who will help you resolve such problems.
However, not all providers offer the same quality of customer service. Some payment gateway providers take their customers' complaints seriously and always respond to your queries, while others simply ignore you for no apparent reason.
In this case, you need to make sure that the payment gateway provider has proactive and responsive customer service, because the faster the customer service can resolve your issues, the less likely you are to suffer financial losses due to technical problems.
You also need to make sure that the customer service team is available at all times and can be contacted via various channels such as email, phone, or chat, as technical issues related to payment gateways can occur unpredictably at any time.
Variety of payment methods
Every customer prefers their own payment method when buying goods or services online. For example, some prefer to pay by credit card, while others opt for the modern convenience of an electronic wallet.
As the trend towards digital transactions continues to grow, you should also consider the variety of payment methods when choosing a payment gateway. A gateway solution that supports a wide range of payment options will not only increase customer satisfaction, but also help you attract more potential customers.
To assess the breadth of payment options offered by a payment gateway provider, you can compare the variety of methods available with those of competitors. This information can usually be found on the official websites of payment gateway providers.
Settlement Period
The settlement period refers to the time it takes for a businesses to receive money from successful transactions. The length of this period varies depending on the service offered by the payment gateway providers. For example, some offer a three-day settlement period, while others allow for instant settlement.
The length of the settlement period is a crucial factor when choosing a payment gateway, as it has a significant impact on your cash flow.
Companies usually prefer a payment gateway with shorter settlement periods as they can access the funds faster. The faster they receive the payment funds, the sooner they can use this liquidity for reinvestment or to support business operations.
However, you need to keep in mind that shorter settlement periods are not always the best option as their effectiveness depends on your industry.
The risks of choosing the wrong payment gateway
Even if you already know what to look for in a payment gateway, it's still important to be thorough when choosing a payment gateway.
A hasty decision can lead you to choose a payment gateway that fails to align with the specific needs of your business and exposes your business to the following risks.
Loss of customers
If you use a payment gateway that has an unreliable infrastructure and an unstable system, you will encounter many technical issues that slow down transaction processes. As a result, your customers will not be able to make payments and will have to wait a long time to retry transactions.
If these technical issues persist, your customers will get fed up with your business and may buy goods or services from your competitors who offer smoother and uninterrupted payment processes.
Also, your customers may turn away from you if you only offer limited payment options.
As mentioned earlier, every customer has their preferred payment method. They will not complete the checkout process if they can not find a payment option that suits them. Again, this will result in your customers switching to your competitors who can accept payments using their preferred payment methods.
Loss of potential revenue
Choosing the wrong payment gateway can cause you to lose customers, which in turn can lead to a significant loss of potential revenue. However, such a situation can turn into a total nightmare if you use a payment gateway with poor customer service.
Imagine you have encountered technical issues and reported them to customer service, but they seem to ignore your complaints. While you wait for customer service to respond to your complaints, more and more customers are unable to complete a transaction. You can imagine how many revenue opportunities you are missing out on just because customer service does not address your issues right away.
Threatens cash flow
A payment gateway with a very long settlement time can jeopardize your cash flow, as you will not be able to buy new supplies or make spending decisions immediately if your funds get stuck in the settlement process.
Conclusion
Payment gateways offer a variety of benefits that can contribute significantly to the growth of your business. Therefore, it is important that you carefully consider your options when choosing a payment gateway that meets your specific business needs. Rushing into a decision could result in you choosing a gateway that does not suit your business operations, which could have a long-term impact on the sustainability of your business.
Given the critical role that payment gateways play in your business, don’t rush into this decision. Instead, take some extra time to check whether the payment gateway you are considering really offers the best experience and service for you.
If you’re looking for a Payment Gateway solution, this is where Aspire can help and we might be the ideal solution for your business.
Aspire’s Payment Gateway Benefits
Complete payment options. With Aspire’s payment gateway, you can accept payments from more than 26 payment methods, such as bank transfers, e-wallets, and credit cards. This feature gives your customers payment flexibility and improves their shopping experience.
Competitive and transparent fees. Aspire allows you to only pay fees per successful transaction, there are no registration or subscription fees. All fees are displayed transparently, so you do not have to worry about hidden costs.
Reliable infrastructure. Aspire's infrastructure meets international standards for security, transaction speed, and system stability.
First-class customer support. Aspire’s customer service team is always ready to answer all your questions and provide technical advice when needed.
Easy integration. You can automate payments by integrating your website with easy-to-use plugins or APIs.
With all these features, Aspire guarantees that you can not only process online payments seamlessly but also get the best-in-class payment gateway experience for you and your customers.
Keen to learn more about how Aspire can help you improve your organization’s financial operations and streamline workflows? Talk to our sales team today, or sign up for free to get started.
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