If you’re operating an e-commerce store, either on its own or as an extension of your brick-and-mortar operations, you’re probably wondering what a Payment Gateway is. You might be confused or frustrated to find that there is yet another payment provider you need to facilitate your transactions.
In short, a Payment Gateway authorizes e-commerce transactions. You need a gateway to help process the payment so you can have funds deposited to your merchant account. To be clear, a Payment Gateway does not replace your merchant account for online transactions. It’s simply an additional provider you need to decide upon and work with.
Like any other provider, a Payment Gateway will charge fees for its services. On the bright side, it’s possible to keep your providers relatively minimized and cost-effective. Picking the best Payment Gateway is crucial to keeping your payments as streamlined as possible. Look for these four elements when choosing a Payment Gateway for your e-commerce transactions.
So, you may be terrified about the prospect of yet another provider added to your business operations. You can breathe a sigh of relief, as some of the best Payment Gateways are also Merchant Account Providers! By choosing a provider that wears multiple hats, you can consolidate and get more from a single provider.
This setup comes with numerous benefits. For one, you’ll only have to call one support line when you have a question. For another, you’ll have an easier time understanding your effective processing rate, as all your rates will be presented on one bill.
This feature naturally follows the last. The best Payment Gateway solution is also a Merchant Account Provider, one provider that can handle both your card-present and card-not-present transactions. This feature is great for brick-and-mortar stores looking to increase their online presence as well as lean startups that went straight to e-commerce sales and plan to open a storefront someday.
With one provider handling all your transactions, you slice yet another potential bill and can gain more clarity over your rates, fees and total credit card processing costs. Due to the complexity of merchant statements and the tendency of providers to exercise unethical billing tactics, minimizing providers can only help you achieve the clearest insight into your costs.
Speaking of costs, one way you can decrease monthly fees is by partnering with a Payment Gateway that lacks a Payment Gateway fee. Again, providers that charge minimal fees do exist, and this is one of those fees that isn’t a given.
The best Payment Gateway is one that doesn’t charge miscellaneous fees like this that serve solely as a profit stream. While it may seem small, a $20 fee every month certainly adds up over months and years of partnership. Furthermore, cheap gimmicks like this could indicate other unsavory billing behavior.
If you can believe it, contracts aren’t a given either. Some providers, like PayJunction, don’t believe in tying customers down with a contract. With a provider that lacks a contract (and this applies to all payment providers), you can rest assured that your service will be excellent. After all, they have to do right by you to earn your continued business. By remembering your rights as a partner to your providers, you can protect your business from restrictive measures that could cost you more in the long run than just picking the best Payment Gateway from the start.
Do you have the best Payment Gateway for your business’s e-commerce transactions? How is that partnership going? What issues have you faced juggling multiple providers? We’d love to hear from you!
Editor's Note: This post was originally published in June 2018 and has been updated for comprehensiveness and accuracy.