When starting out in the world of e-commerce, one of the most important things to do when building your website is to choose a suitable payment gateway.
A payment gateway is the facility attached to your website that allows you to accept credit cards as payment methods. Credit cards are a necessary payment option on successful e-commerce websites, so you should never consider not having this service on your website.
Some e-commerce websites may offer a downloadable form to print and submit with credit card information or have a statement saying the customer will be contacted for payment once the order has been placed. Although this can save money in the short term by not using a payment gateway, our research has found that this severely limits the number of customers who will place an order on your website.
Online customers want to know exactly what they’re looking for (including freight), and they’ll want to pay and complete the order right there. If you put up obstacles to this (such as a downloadable order form or saying you’ll call them for credit card details), you’ll usually find the customer will simply go elsewhere.
When it comes to payment gateways, there are three common types of payment gateways.
- Manual payment gateway A manual payment gateway is a facility that securely takes customers’ credit card details and stores it for you to manually access and process through a facility such as an eftpos machine. Manual payment gateways are generally the cheapest form of gateway, but they require you to manually process each payment, which can become a burden if you do a lot of transactions per day. To use a manual payment gateway, you’ll need a merchant account with your bank and also the bank’s permission to process credit cards without a signature. You will also need access to a facility such as an eftpos machine or online processing system to process payments. You will need to speak to your bank to arrange this and then use a manual payment gateway such as E-Gateway.
- PayPal Paypal is often the payment gateway of choice for people starting out in e-commerce. Paypal can be easily integrated with your website to act as a payment gateway. Transactions are processed in “real time”, which means that when a customer enters their details, you automatically receive the funds. One drawback with Paypal is that in order for Paypal to work properly with an e-commerce site, your customers must be PayPal members or go through PayPal’s registration process before they can place an order from your website. Another drawback is that you need to transfer funds from PayPal to your bank account manually when you need to access them, which can result in additional fees.
- Payment gateway in real time Real Time Payment Gateway is the most professional and efficient gateway solution available. Payments are processed at the point of sale on their website and you tend to receive the funds within a couple of days. A real-time payment gateway is perfect for sites experiencing high sales volumes or for those who cannot access the facilities required for a manual payment gateway. You can access a real-time payment gateway solution from many banks and also from third-party companies like Eway or Worldpay.
When developing your ecommerce website, it is important to choose the gateway that suits your needs. Remember that if you are not using the Paypal method, you must also organize your business establishment with your bank. This can often take a few weeks, so it’s always best to get started on this before your website is ready to launch. Also shop around with different banks, as you can often get good deals on fees and interest charges if you do this.
