When starting off in the world of e-commerce, one of the most important things you need to do when developing your website is to choose an appropriate payment gateway.
A payment gateway is the facility connected 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 facility on your website.
Some ecommerce websites may offer a downloadable form to print and send with credit card information or have a statement saying that 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 are up for (including freight) and will want to pay and complete the order there and then. If you place hurdles to this (such as a downloadable order form or saying you will ring them for credit card details) you will usually find the customer will just 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 the customer’s credit card details and stores them for you to access and process manually through a facility such as an eftpos machine. Manual payment gateways are generally the most inexpensive form of gateway but do require you to manually process each payment which can become an overhead if you are performing many transactions a day. To use a manual payment gateway, you will need a merchant account with your bank and also permission from the bank 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 the payments through. You will need to speak to your bank to organize this and then use a manual payment gateway such as E-Gateway.
Paypal is often the payment gateway of choice for people starting out in Ecommerce. Paypal can be easily integrated with your website to act as the payment gateway. Transactions are processed in ‘real time’, which means that when a customer enters their details, you automatically receive the funds. A drawback with Paypal is that in order for Paypal to work properly with an ecommerce site, your customers are required to either be a paypal member or go through the paypal sign up process before they can order from your website. Another drawback is that you need to transfer funds from paypal to your bank account manually when you need access to them, which can incur extra fees.
Real Time Payment Gateway
The real time payment gateway is the most professional and efficient gateway solution available. Payments are processed at the point of sale on your website and you tend to receive funds within a couple of days. A real time payment gateway is perfect for sites experiencing high volumes of sales or for those people who cannot access the facilities needed for a manual payment gateway. You can access a real time payment gateway solution from many banks and also third party companies such as Eway or Worldpay.
When developing your e-commerce website, it is important to choose the gateway that suits your needs. Remember that if you are not using the Paypal method, you will also need to organize your merchant facility with your bank. This can often take a few weeks so it is always best to get started on this before your website is ready for launch. Also shop around with different banks as you can often get good deals on fees and interest charges if you do this.