If you want your website to accept payments, you need a payment gateway.
But what is a gateway? What does it do? How does it help? And how do you choose the best payment gateway for your business?
In this article, we'll answer those questions and look at how simple it can be to set one up using PrestaShop as an example.
What is a payment gateway?
In e-commerce, you can think of a payment gateway as being the online version of a point-of-sale terminal. It's the technology that securely converts your customer's payment information into an actual payment for your business.
The customer enters their payment details into a desktop or mobile web browser and the payment gateway encrypts the information before sending it along the payment chain to be validated by the customer's bank, card issuer or other payment provider.
Without a payment gateway, a customer would need to phone or email you to arrange payment. That's simply too much hassle for today's customers. If it's too hard, they'll shop elsewhere.
If you only use your website to promote your business and not to handle any sales transactions, then you won't need a gateway. As soon as you start selling online, however, you'll need to find the best payment gateway for your needs.
Payment gateways can be provided by banks or card processors, by payment service providers like PayPal or by ecommerce platforms.
Not all gateways are the same, however. Those provided by a bank or card company may only support a limited range of payment options, for example.
Different gateways provide different customer experiences, so it's important to choose one that gives the best experience for your customers.
How a payment gateway improves customers' shopping experience.
A payment gateway does more than simply process transactions. It's an important part of the overall online customer experience.
Around 70% of online shopping transactions are abandoned,1 often at the checkout stage. A good gateway solution can improve this by providing a simple, seamless, and secure payment flow making it easy for customers to finish their purchase.
Customers are put off by a process that feels unprofessional or insecure. If the process is too fiddly, they can change their mind and shop elsewhere. You work hard to deliver an excellent customer experience, so don't let a poorly designed gateway undo all your hard work at the final step.
7 factors in choosing your payment gateway.
To select the best payment gateway for your business needs, consider these seven things.
1. Payment options
30% of customers say they'll abandon a purchase if they can't use their preferred payment method,2 so it makes sense to offer the widest possible range of payment options. This is particularly important if you have international customers, as payment preferences vary by country. Not all gateways give you a range of options, so be sure to check.
2. Mobile optimized
People increasingly shop using their mobile phones. Sometimes they browse on their phones, then complete the purchase on a larger desktop screen. Either way, make sure your payment gateway (and your website) respond dynamically to the customer's device so they enjoy the best possible payment experience. No one wants to pinch and scroll or enter long numbers on tiny screens.
3. Efficient payment flow
Another important factor for customer experience is the number of steps and screens a customer has to go through to complete their purchase. Look for a gateway that keeps this as simple and efficient as possible, so you don't lose customers out of frustration or confusion along the way.
4. International reach
The great thing about ecommerce is that it's international. Will your payment gateway match your ambition? Check that it's available in a wide range of countries, especially those that you may be targeting. Does it handle those currencies? And the preferred payment methods of shoppers in those countries? Don't let your choice of gateway exclude potential customers from other countries.
Most gateways from reputable providers will be secure, but it pays to check. Confirm that it meets the new security requirements of PSD2 and 3D Secure authentication. Equally important is checking that the checkout experience feels secure from a customer perspective. Also, look for fraud-protection tools that help you detect potentially fraudulent transactions.
6. Easy management
Your administration experience is almost as important as the customer experience. Before you commit to a new gateway, consider how it will fit into your daily operations. Will the solution enable you to manage all payment types from a single interface, or will you have separate tools for card payments, PayPal, and other payment types? How easy will it be to manage transactions, including any refunds? Consider how the gateway supports your accounting reconciliations. A good gateway should simplify your back-office operations, not make them harder.
7. Installation, activation, and fees
Some gateway solutions are difficult to integrate with an existing website. They have poor documentation and/or offer little support. Before you settle on a payment gateway, think about how easy it will be to install, integrate, activate, and maintain.
Be sure to understand fee structures too. Some providers charge installation (and cancellation) fees. Some have a regular monthly fee that can be expensive, especially when you're just starting out. Others simply charge per transaction, which means if you have no (or low) sales, you also have zero (or low) fees.
How to set up a payment gateway in PrestaShop
PrestaShop and PayPal have collaborated to produce PrestaShop Checkout, an all-in-one checkout module that lets you manage all types of payment easily and securely.
With PrestaShop Checkout, your customers can pay by PayPal, as well as cards like Visa, MasterCard, and American Express, and popular alternative methods like Sofort, iDeal, GiroPay, and Bancontact, etc.
PrestaShop Checkout is already available within PrestaShop back-office, so you can get activate it in three simple steps:
- Activate PrestaShop Checkout from the PrestaShop Module Manager tab or the Payment tab.
- Connect your PrestaShop Checkout and PayPal accounts. You can create both accounts as part of the process if necessary.
- Select the payment methods you wish to offer from within the PrestaShop interface.
It's a simple, two-minute configuration. You can see how in this video.
PrestaShop Checkout is designed to deliver the following benefits:
- Improved conversion
- Simple configuration and management
- World class security and anti-fraud protection
- Transparent pricing
To learn more, visit the PrestaShop Checkout page, here.
1. Baymard Institute (2019), https://baymard.com/lists/cart-abandonment-rate
2. Online study commissioned by PayPal and conducted by Ipsos MORI Conjoint Research in October 2018. Survey conducted across seven markets (UK, Germany, Italy, Spain, US, Australia, Brazil) with 1,500 respondents per market/10,500 total respondents, including 6,930 PayPal users.