You have already set up your online shop, or you might be at the planning level. After all, you need to earn money. For every online shop, a payment gateway must be integrated to receive payments at your online shop from customers.
There are many payment gateway services available in the market. But you have to consider the right one or two for your shop. How can you decide on your preferred payment gateway? In this topic, I am giving a checklist of a dozen question and some hint to help you choose your preferred payment gateway. Detail explanation of these questions are below:
Questions You Must Ask to Your Payment Gateway Provider:
- Whether your targeted Market Supported or Not?
- Are they accepts all Cards (Debit & Credit) issued by all banks in your target area?
- Is there any Monthly/Yearly Fees or Setup Fees if any?
- How much charges they actually take for every transaction?
- What are the related Govt. Tax rates added on Transaction charges?
- How many days it takes to Transfer the Money to your Bank account?
- Are there any charges when you Refund any transaction?
- What are the Currency Conversion rates compared to actual exchange rates?
- Is any easy integration option available with your online shop or not? If yes who will integrate it?
- If the Gateway service provider agrees to integrate then, are there any additional charges or not?
- What legal documents you have to provide while applying for the Gateway service?
- Other queries like Self Hosted or Brand-able? What about PCI DSS Security level? Fraud Protection etc.
Explanation of these Questions:
- If you are selling internationally you have to opt for payment gateways like PayPal, Payoneer, Stripe etc. which are globally available. But, if you want to sell in your local market or at National level you might go for some country specific payment gateway providers like PayTM, PayUMoney etc. available for Indian Consumers.
The main reason is payment gateway service providers are partnered with different Banks which operate Nationally and Internationally different way. For example, PayPal works mainly with CitiBank, which has a large serving area across the globe.
- You must verify the Gateway providers, whether they accept all type of Debit Card, Credit Card, Net banking and other wallet services available in your target market. Because you cannot predict, how your customers are going to pay you for your products and services. You have to include all available payment options for them.
- Many payment gateway service providers charge a basic setup fee and some hidden monthly or yearly service charges for their service. Also, there are some Gateway service providers who don’t take these charges but cut’s a percentage as Commission for every successful transaction. Many providers cut’s this Commission from receivers amount and a few charges the sender. You have to completely understand this charges before deciding on your preferred payment gateway service provider.
- There are some fixed charges on commission you have to pay for every transaction like $0.3 in addition to the percentage taken by them. Also, if your payment is very low they can have some minimum charges. You must consult with your payment gateway service provider before finalizing your product price to compensate the losses caused by these charges.
- Different countries can have different government taxes on selling products and services like VAT (Value Added Tax). Also, this Taxes applies on the transaction charges. You must know about this tax rates which will be added with the transaction charge. In India, a GST (Goods and Services Tax) rate of 18% recently applied as service charges upon the transaction charge instead of previously applied VAT rate of 15%.
- Many payment gateway companies transfer your money to your bank account within 24 to 48 hours. But some companies can hold the money as escrow service for a specific period of time like 7,15,30 or 45 days. You must consult these beforehand.
- If your customer cancels the order for any reason you have to refund him the amount paid by him for your product or service. In this case, some payment gateway providers apply some charge-backs. This chargeback amount is deducted from your account balance. You have to keep in mind about this refund and plan your refund and return policy accordingly.
- If you are selling internationally there is possibility when your customers are paying in different currency rather than your own local currency. International payment gateway providers have their different currency conversion rates than normal exchange rates. Usually, their currency conversion rates are lower when you are receiving money and this rate is higher when you are sending the money. These means that you will get less money than the average exchange rate. Consult with your gateway provider about the exchange rate before deciding.
- Payment gateway integration on your online shop is usually done by your development team. If you don’t have any developer or you are building your own online shop yourself, then you must ask the provider to help you in the integration process. Some providers give this integration support for free and others can charge you.
- Usually, they have complete documentation on API and other settings on their website with examples on different platforms. Consult with your Gateway service provider before subscribing for their services.
- There are some rules and regulations provided by different government organizations for selling online. So you have to provide some legal documents like business registration certificate, identity proof, address proof, email ID and mobile phone number, bank account details, disclosure and agreement form, tax registration details etc. to your payment gateway service provider. Make sure you completely trust the Gateway service provider before giving out these important documents to them.
- There might be some other queries you have in your mind regarding this payment gateway services. You can look at their example payment pages and read about their features in detail to know more about security, fraud protection, payment terms, availability, reliability etc.
If you are selling at different Marketplace Websites like Amazon, Newegg, Wish etc. then you must Tryout Payoneer. It provides direct money transferred into your bank account within 24-48hrs and has lowest fees in the market.
I hope, this guide will assist you to decide on your preferred payment gateway service provider. If you have more queries regarding this topic you can ask me by commenting below.