For an e-commerce store, getting the payment process right is vital. Not just for your business to function, but also for users to complete the transaction. Payment gateways have improved over the years to help users checkout with minimal friction and enable you access to the funds as quickly as possible. This post discusses this progression (how payment gateways used to be, how they are now, and what’s around the corner) as well as highlighting 5 key questions your business needs to ask in order to find the best payment gateway solution for your requirements.
How payment gateways used to operate in the early days of the web
When e-commerce was in its infancy, early payment gateway options were limited, and came with a hefty amount of set-up, both with paperwork to set up the service (especially for high street bank gateway offerings) and integrating with the website. More purpose-specific gateways (i.e. Worldpay or Paypal) also handled the basket logic, as many sites were selling products using simple HTML pages, with no e-commerce platform.
SSL certificates were expensive, and to self-host the checkout page would require costly and in some cases technically complex paperwork (i.e. PCI compliance etc.). HTML-only websites also meant often the basket, and almost always the checkout pages would be hosted elsewhere. Payment gateways allowed some styling of the pages hosted on their services but often checking out was quite a jarring experience, being passed from one site to another.
With all the paperwork, technical support, basket logic and checkout page customisation that was required, payment gateways back then were quite expensive. Generally, the contracts would work on a monthly fee + transaction fee + percentage fee.
The role payment gateways play in modern e-commerce platforms
Nowadays there are a plethora of payment gateway options, they are easy to sign up to and easy to integrate with most e-commerce platforms. Their offerings have become much more focused, generally handling behind-the-scenes tasks to capture funds with no basket integrations or front-facing interfaces, and SSL certificates are everywhere and free (with Holler Marketing at least!)
With all this competition, prices are cheaper than ever, and extra functionality aligned with the payment process is always being added to compete for your business. For instance, payment gateways will produce plugins and extensions that work with e-commerce platforms. These plugins seamlessly integrate payment buttons like Apply Pay and Android Pay and vaulting systems to enable your e-commerce store to save card credentials etc.
The above changes have moved payment gateway service fees to a pay-per-use model. The monthly fee model still exists, often with smaller transaction and percentage fees, but an e-commerce store would have to handle a lot of volume to make them worthwhile. The increase of smaller e-commerce sites without a large or consistent turnover has also made the pay-as-you-go model much more popular.
What’s next for payment gateways?
Payment gateway companies are always thinking about new ways they can increase the volume of sales through their platforms, this involves removing yet more barriers to payment as well as making payment options more prevalent. Over the next year or so you will notice more integrated payment options, known as social and live commerce, directly allowing purchases within social media posts and live-stream videos.
Another shift is the integration of finance products into payment gateways. Business-to-consumer products like ‘buy now pay later’ etc. are on the increase, first with the likes of Klarna, but most gateways now have some similar offering.
5 questions to determine the best payment gateway for your business
Firstly, assess what your requirements are. What is important to your customers and to you? Use the following questions below to figure out your priorities. Feel free to use the text areas to send us your answers, and we will get back to you with our suggestions.
Holler Marketing can provide unbiased advice, free of charge
Holler Marketing hold no affiliate account with any payment gateways. We have well over a decade of experience integrating with countless payment gateways. We believe the above questions should be asked and assessed and only then can the best decision for your company be made.
Feel free to send your (even partial!) answers to the above 5 questions, and we will advise you on the payment gateway which best suits your requirements, free of charge, with no obligation.