Buying and selling have become much easier with customers only having to contact the seller, place an order on the sellers website or an ecommerce platform, make payment and wait to receive the goods or service they paid for. This is made possible, fast and easy by the use of a payment gateway.
A payment gateway as a merchant service that processes credit card payments for ecommerce sites and traditional brick and mortar stores. Popular payment gateways include Paystack, Flutterwave, PayPal/Braintree, Stripe, and Square.
A payment gateway facilitates a payment transaction by the transfer of information between a payment portal (such as a website, mobile phone or interactive voice response service) and the front end processor or acquiring bank.
Types of Payment Gateways
There are generally three (3) types of payment gateways:
Redirects might include an option for a PayStack payment, for example.
When the gateway takes a customer to a PayStack payment page to handle the complete transaction (i.e. processing and paying) it becomes a “Redirect.”
This has the advantage of simplicity for the retailer. A small business can use a Redirect gateway to incorporate the convenience and security of a major platform like PayPal, but the process also means less control for the merchant — and a second step for customers.
2. Checkout on site, payment off-site.
Like redirected payment gateways, there are some advantages to handling your payments this way, including simplicity.
But as is the case above, you won’t be able to control the user’s entire experience through the payment gateway.
You’ll be at the mercy of the quality of the offsite gateway and its quirks.
3. On-site payments.
Large-scale businesses tend to use on-site payments completely handled on their own servers. The checkout and payment processing on behalf of the customer all work through your system.
Now the advantages are flipped: you’ll have more control, but also more responsibility.
If you handle payments on-site, every variable counts.
Because retail has a cart abandonment rate of about 75%, any improvement you can make to the shopping experience can create dramatic changes in your bottom line.
This is especially true for any retailer working with a high volume of sales. When you handle your payments on-site, it’s essential that you understand your options as well as your responsibilities.
Popular Payment Gateways in Nigeria
Consumers in Nigeria have turned to making payments online rather than the traditional way of making payments. As it is safe, fast, secure and convenient. Therefore, merchants are expected to be able to meet up with these needs.
As a result, there is a wide range of payment gateways to choose from, as a merchant. Before making your choice, proper consideration must be made. You have to know the solutions each provide,the pricing,the payment methods. Is it local or international? Is it safe and secure? Also, go online to know what people are saying about each payment gateway.
- Interswitch Webpay
- FirstPay Link
Considerations for Choosing a Secure Payment Gateway
Once you know what to expect from a payment gateway, it helps to narrow the focus to how to select your payment gateway of choice.
You won’t have any problems finding a mainstream payment gateway that makes your shopping carts convenient, so let’s focus on security.
According to Experian, 27% of customers report abandoning a cart simply due to a lack of visible security.
To ensure that you’re working with a secure payment gateway, ask the following questions:
1. What payments do your customers use?
It’s one of the fundamental questions you need to ask: what are your customers already using to handle their payments?
If you stack your payment gateways and facilitate a payment type they can use, you’ll run into fewer problems and run fewer security risks.
2. What is the fee from the payment gateway?
The costs of ecommerce fraud can add to your bottom line.
That means that if a payment gateway’s lower costs are outweighed by the money you spend on additional security concerns and fraud detection, it might not be worth that investment.
Consider the fee of your payment gateway and how it relates to your security costs. Our list above quoted the prices of seven of the major payment gateway providers.
3. How secure is their encryption?
To be sure, you’ll want to work with PCI compliant companies.
The Payment Card Industry Data Security Standard (PCI DSS) is a system of standards put in place to uphold security provisions for the electronic world.
Before you pull the trigger on any one gateway, double-check that they maintain PCI compliance. These are standards put in place to protect customer data and payment information.
For example, if you were weighing using PayPal as your payment gateway of choice, you would discover that their solution is PCI compliant, which should give you confidence in the sophistication of their encrypting process.
4. What is their reputation?
If over a quarter of customers want to see visible security marks at the point of checkout, you’ll have to use a payment gateway that they trust.
Consider that a Verisign seal once helped BlueFountainMedia increase its form fills by more than 40%.
If you want to prevent customers from abandoning their carts, avoid sketchy payment gateways.
Instead, focus on large payment gateway providers with established reputations, such as Amazon Pay, PayPal, and Apple Pay.
This brand recognition works in your favor by highlighting your security and encouraging a customer to continue shopping.
With a better understanding of payment gateways and what it is all about we understand now we have been using them without knowing what they really are and also how we are having ease in our daily transactions because of this payment gateways.
In another blog post we will be learning how to choose the best out of many of the payment gateways available in Nigeria based on the services they provide.