Keeping Your Ecommerce Transactions Safe and Customers Happy

Online payment gateways have never been easier to use. They've also never been a more popular target for hackers and scammers. Businesses that rely on online payment processors may be hit the hardest.

It's critical to understand that the quality of your eCommerce payment gateways helps you defend against these attacks in real-time by acting as an encryption buffer between buyer and seller. High-quality payment gateways can also assist you in reducing load time.

Furthermore, according to abandonment surveys, some of the top reasons for abandoning a shopping cart can be addressed in the quality of your gateway:

• 15% abandon the shopping cart for a better in-store experience.

• 6% abandon due to a lack of payment options.

• 4% abandoned due to technical issues.

With all of this in mind, you might be wondering: how do you choose a payment gateway that maximizes convenience, minimizes risk, and ensures the security of your customers' information?

Follow-up question: what should you know about payment gateways in order to provide the best and most secure payments to your customers?

Let's get started with those answers and more.

What Is A Payment Gateway?

An online payment gateway India is a merchant service that accepts credit card payments for eCommerce sites as well as traditional brick and mortar stores. Consider the gateway to be the figurative cash register in an electronic transaction.

It, like any other cash register, must be both secure and easy to use. Most payment gateways accomplish this in a matter of seconds by performing the following steps:

Encryption: A payment gateway will encrypt (encode for private use) data between the user's browser and the retailer's server for exclusive use between the seller and buyer.

Request: When a payment processor receives authorization to proceed with a transaction from a credit card company or financial institution, this is referred to as a request.

Fulfillment: Once the payment gateway has received authorization, the website and interface can move on to the next action.

Other functions of the payment gateway include screening orders, calculating tax costs, and using geolocation for location-specific actions.

Payment Gateways vs. Payment Processors: What’s the Difference?

Payment "gateways" and "processors" may be used interchangeably. However, there are some key distinctions:

A payment processor is responsible for analyzing and transmitting transaction data. This includes sending pertinent information to an issuing bank, such as the credit card or debit card number associated with a bank account.

This differs from the payment gateway, which not only performs the tasks listed above but also authorizes the transfer of funds between buyer and seller.

The distinction may appear minor at first, but consider the gateway to be the overall system at the point of purchase: the metaphorical cash register.

The processor is the step in the process that "swipes" the card and sends the data to the issuing bank.

A processor, like a payment gateway, can include both a digital and a hardware component — or it can handle the processing entirely through software.

3 Types of Payment Gateways

There are generally three types of payment gateways:

1. Redirects

For example, redirects could include a PayPal payment option.

When the gateway directs a customer to a PayPal payment page to complete the transaction (i.e., processing and payment), this is referred to as a "Redirect."

This has the advantage of making things easier for the retailer. A small business can use a Redirect gateway to incorporate the convenience and security of a large platform such as PayPal, but the process also means less control for the merchant — and a second step for customers.

2. Checkout on-site, payment off-site.

Consider Stripe's payment gateway: the front-end checkout will take place on your site, but payment processing will take place on Stripe's back end.

As with redirected payment gateways, there are some benefits to handling payments in this manner, including simplicity.

However, as previously stated, you will not be able to control the entire user experience through the best online payment gateway. You'll be at the mercy of the offsite gateway's quality and quirks.

3. On-site payments.

Larger businesses typically use on-site payments that are completely handled on their own servers. Your system handles the checkout and payment processing on behalf of the customer.

The benefits are now flipped: you will have more control, but also more responsibility.

When handling payments on-site, every variable matters. Because retail has a cart abandonment rate of around 75%, any improvement you can make to the shopping experience can have a significant impact on your bottom line.

This is especially true for any retailer with a high sales volume. When you handle payments on-site, it's critical that you understand both your options and your responsibilities.

Limitations of Payment Gateways

You may have noticed that the top payment gateways listed above are not all created equal.

When you choose a payment gateway, you must understand and accept certain limitations, many of which are inherent in the payment gateway infrastructure.

Considerations for Choosing a Secure Payment Gateway

Once you understand what to expect from a payment gateway, you can focus on how to choose your preferred payment gateway.

You won't have any trouble finding a popular payment gateway that makes your shopping carts easy to use, so let's concentrate on security.

Ask the following questions to ensure you're working with a secure payment gateway:

1. What payments do your customers use?

It's one of the first questions you should ask: what payment methods do your customers already use?

You'll have fewer problems and security risks if you stack your payment gateways and allow them to use a payment type.

2. What is the fee from the payment gateway?

Ecommerce fraud can have a negative impact on your bottom line.

That is, if the lower costs of an online payment gateway are outweighed by the money spent on additional security concerns and fraud detection, the investment may not be worthwhile.

Consider your payment gateway's fee and how it relates to your security costs.

3. How secure is their encryption?

To be certain, you should only work with PCI-compliant companies.

The Payment Card Industry Data Security Standard (PCI DSS) is a set of standards put in place to ensure electronic security.

Before you commit to a single gateway, double-check that it is PCI compliant. These are guidelines put in place to safeguard customer data and payment information.

4. What is their reputation?

If more than a quarter of your customers want to see visible security marks at the checkout, you must use a payment gateway that they trust.

Avoid using shady payment gateways if you want to keep customers from abandoning their carts.

This brand recognition benefits you by emphasizing your security and encouraging customers to continue shopping.

Opening Your Payment Gateway for Business

Once you understand the significance of a payment gateway and its impact on your sales and security, you can proceed to the following steps:

Priorities should be considered when conducting research. Check your potential payment solution's PCI compliance to ensure its security, and always look for per-transaction prices to get a sense of how a gateway will affect your bottom line.

Recognize what your customers desire. Even if you don't have a payment gateway, you may already have insights that you can use. Which payment methods do your customers prefer, and how can you accommodate these preferences in the most convenient way?

To fill gaps, stack multiple gateways. You don't have to limit yourself to one gateway for the rest of your life. You can even stack multiple gateways at the same time to ensure maximum coverage for the majority of customer needs.

With a better understanding of price, function, and gateway security, your company will be able to select the best option for your needs and add a new level of security (and peace of mind) that customers require when making an online purchase.