How To Choose The Right Payment Service Provider For Your Online Store
The good news is that as the app owner, you don’t need to delve into the technical aspects of online payment gateway integration. In practice, all you have to do is select a gateway and then embed it into your app. After that, it just works and allows you to collect payments from customers. Anyhow, if you want to take a closer look at how the payment gateway works, read our previous article. In this post, we will focus on ticking the right box for your business.
Things To Consider Before You Integrate Online Payment Gateway
Let’s clarify some details before we go directly to the choice of the service provider. Below, I have listed three factors that are worth your attention.
Type Of Product You Sell
It is an important question to clarify before you start the ball rolling. The point is that you cannot sell all the product groups with the help of third-party payment processors.
Digital Content
If you trade digital content, you should consider Google Play and Apple App Store rules for in-app purchases. Their policies do not allow external services. All the payments should go via the innate mechanisms, which are Gmail and Apple ID.
If this is your case, please, check the relevant documentation to integrate electronic payment into your app. Both Google and Apple provide step-by-step guidelines for fast and easy integration.
High-Risk Products
Some products fall under the high-risk level. Note that very few providers want to work with such goods. So, before you connect a third-party payment to your trading app, make sure to review the list of hazardous items, they are:
- Gambling
- Pharma drugs
- Cryptocurrency
- Legal affairs
- Adult materials
- Flight tickets
- E-cigarettes and tobacco
- PC software and hardware
Physical Goods
If you sell ordinary physical goods, you should connect to an online payment gateway. No matter where you will post your app — Google Play, App Store, or both, it is a must-have to accept money from buyers. If you are not sure what to opt for, continue reading this guide. We will choose the right e-commerce credit card processor for your business together.
Merchant Account
When you receive money from the buyer, first, it goes to the merchant account and then to your bank account. The merchant account accumulates funds for a short period and allows you to refund quickly in case the buyer cancels the order.
There are two types of merchant account: dedicated and aggregate account. You need to choose one when integrating a credit card payment platform.
A dedicated account provides more powerful tools to control money, but it is quite expensive. The merchant can edit transaction details, remove errors, and immediately refund if such need arises. The dedicated merchant account collects funds from a single seller. Also, it provides you with fast transfers, usually within a day. We advise applying for a dedicated account if you own a large business.
An aggregate account is less personalized, but cheap. It accumulates money from several merchants and provides slower transfers. On the plus side, there is an easy way to apply for an account. You don’t need to prepare many documents. Usually, you get registered within 24 hours. We recommend choosing this type of account for small and medium vendors.
Legal Compliance
Payment systems such as VISA or MasterCard oblige merchants to comply with the PCI DSS standard. It is a legal statement that contains a set of security requirements for those who sell online.
To apply for the certificate, you should prove the safety of your system. Among other things, you should report on
- Local network security
- Authentication mechanisms
- Events logging
- Data configuration
- Antivirus software
- Means of physical protection
How To Choose Payment Service Provider
There are vital criteria that you should consider when selecting a payment gateway.
Security
No one wants to be in charge of licking sensitive data outside. So, both you and the provider are interested in secure credit card processing. If you study payment gateway services, you will see that all of them have powerful tools to protect your account. However, some things are worth your special attention. They are point-to-point encryption, data breach insurance, AVS/CVV checks.
Speed
Of course, you want to get your money as soon as possible. So, fast transfers from buyers to your account are a big plus. However, high-speed services may be too expensive. So, weigh all the pros and cons. Maybe, you will be okay with waiting some extra hours or days if it helps save.
Data Mobility
If you decide to switch third party payment service and your current provider does not support data mobility, you will lose all the clients’ records. It is an issue if you charge regular payments since all your existing subscriptions will be left unpaid.
Payment Features
Sometimes you may need your gateway to do more than process one-time payments. Do you want to charge recurring fees or act as a trading platform and accept payments on behalf of sellers who post their products on your site? Most payment gateway services are very limited in functionality, so make sure that the provider in question has the necessary functions.
Payment Methods
The majority of users pay with a credit card. However, there are more payment methods to consider, for example, internet banking or virtual wallets. First of all, you should study the habits of your target audience. Determine the preferred payment methods and pick the relevant provider. If you are not sure what to choose, browse the sites of your competitors and see what payment methods they offer.
Geography
Many payment gateway services have restrictions in certain regions. Check the list of available providers in your country and make sure they support all currencies you accept.
Support
You must be able to contact support if something goes wrong with online payments immediately. Customers can quickly choose you over your competitors if they have a sense of unstable brand in your e-commerce store.
Best Payment Gateway Providers To Consider
Now that you know what things to pay attention to let’s review the most popular services. Datanyze research lists 11 names. We will examine the top 5 to find the right payment option for your app.
PayPal
PayPal is more than just a gateway. It is the one-box solution that guarantees that you can sell your products to everyone. What’s more, PayPal is a well-recognized brand. So, if you embed it into your store, the clients will award you with their trust.
PayPal offers flexible solutions. You can choose a free PayPal Standart if you are a beginner seller or advanced PayPal Pro if you are a more experienced seller.
PayPal Pro is fully customizable and hosted on your server. It means that buyers complete a purchase without leaving your app or website. A bonus for pro users is the ability to accept credit cards via phone, fax, and mail. Pro account is quite expensive; however, it is well worth the effort.
Price: $30 monthly fee & 2.9% + $0.30 transaction fee
Security: PCI DSS, antifraud system, chargeback elimination
Speed: instant transaction processing
Data mobility: yes
Recurring charges: yes
Payment methods: credit/debit cards, bank account, PayPal account, rewards balance
Number of currencies: 25
Number of countries: 203
High-risk business: no
Support: PayPal community, resolution center, chat, phone
Stripe
Stripe is the second most popular online payment gateway that serves more than 100 thousand sites worldwide. It is very developer-oriented, which means it provides a variety of development tools to integrate a gateway into your store. Stripe has a lot of custom features; it is easy to adapt to the needs of your business. Stripe gateway fits any kind of commercial activity, whether it is an e-commerce store, a marketplace, or a crowdfunding system.
Price: 2.9% + $0.30 transaction fee
Security: PCI DSS, antifraud system, chargeback elimination
Speed: instant transaction processing
Data mobility: yes
Recurring charges: yes
Payment methods: debit/credit cards, e-wallets, local payment methods (Alipay, Giropay, Sofort, etc)
Number of currencies: more than 100
Number of countries: 25
High-risk business: no
Support: phone, chat
Amazon Pay
Amazon Pay is an excellent solution for existing Amazon sellers. Native Amazon service allows users to pay without entering credit card details. It saves time, effort, and provides a neat user experience. You can also integrate Amazon Pay into any other shopping platform. Amazon API will help you customize the Payment mechanism so that it fits seamlessly into your store.
Price: 2.9% + $0.30 transaction fee
Security: PCI DSS, data encryption
Speed: 1- 2 business days
Data mobility: yes
Recurring charges: yes
Payment methods. credit/debit cards, Amazon.com cards
Number of currencies: all currencies of supported regions
Number of countries: more than 60
High-risk business: restricted
Support: phone, email, chat
Square
Square is a universal solution that easily integrates into your e-commerce platform. Initially coming with software for offline stores, now Square defies competition with online payment. The service acts as a payment provider that turns customer devices, whether it’s a web platform or a phone, into a point of sale. Users can scan their charge cards using specialized equipment or enter cc credentials manually.
Price: 2.9% + $0.30 transaction fee
Security: PCI DSS, antifraud system, chargeback elimination
Speed: 1- 2 business days
Data mobility: yes
Recurring charges: yes
Payment methods: credit/debit cards, e-wallets, Square cash
Number of currencies: all currencies of supported regions
Number of countries: 5
High-risk business: restricted
Support: phone, email, knowledgebase
Braintree
Braintree is a PayPal unit that handles online payment options via websites and mobile devices. It is compatible with the majority of trading platforms and e-commerce solutions. You need the help of the developer to set up the Braintree gateway in your store. However, this task is not complicated. Braintree provides libraries and good examples of integration to their clients.
Price: 2.9% + $0.30 transaction fee
Security: PCI DSS, antifraud system, chargeback elimination
Speed: instant transaction processing
Data mobility: yes
Recurring charges: yes
Payment methods: credit/debit cards, e-wallets, local payment methods (IDEAL, MyBank, eps, etc)
Number of currencies: more than 130
Number of countries: 28
High-risk business: yes
Support: email, phone
So, What Payment Service Provider To Choose?
Well, there are many things to consider when you set up online payment in your app. To choose the best working option, outline the critical aspects of your business.
- Is it small, medium, or big?
- Is it local or international?
- Does it fall under the high-risk category?
Depending on the answers, choose your option. For example, you can opt for PayPal if you are a large merchant who works all over the world with different currencies. You need Stripe if you look for a personalized solution. For existing Amazon sellers, Amazon Pay is a must-have. If you target a specific audience, you may be okay with payment methods suggested by Square. If you sell distinct goods, choose Braintree.
If you still hesitate about what a payment service provider to choose, contact us. We will help you make wise choices!
This article was originally published at Softensy.
