E-commerce is growing rapidly, with worldwide sales online anticipated to touch $5 trillion in 2021. The future of e-commerce seems to be even brighter and the continued growth can be attributed to the availability of mobile platforms, personalization, social media analytics, omni-channel service, and a â€˜shared economyâ€™ business models. The evolution in e-commerce can also be partially credited to the developments within financial technology (fintech), such as the introduction of e-wallets, new payment options, in-app purchasing, and peer-to-peer lending and payments (like Venmo and even Facebook cash).
As consumers grow increasingly comfortable with online methods of shopping as well as online payment systems, fintech and payment innovations are responsible for making these online transactions much easier and frictionless. E-commerce payment gateway solutions are growing even more secure and efficient, thus making them attractive for consumers and businesses alike. It is believed that as fintech and other payment innovations evolve, the e-commerce market will continue to evolve with it.
What is a Payment Gateway?
In the simplest of terms, ecommerce payment gateway solutions comprise software solutions that allow online stores to conduct electronic transactions for their business. Ecommerce payment gateway integration services are easily available for e-commerce websites as well as m-commerce apps. The payment gateways also ease processing of online transactions between a business and its customers. They are the essential mediators that bring together customers and sellers who want to get in a business transaction through a mobile app or website.
Payment gateways omit the need for direct interaction between the app and payment processors by making use of encryption to ensure the secure processing of sensitive customer data. Most of the payment gateways in use today are compatible with popular financial systems like Visa, MasterCard, American Express, etc. These gateways are well equipped with the ability to verify user data with perfect accuracy.
Apart from the provision of a secure payment gateway, the software also brings additional features to the app which in turn help prevent frauds and extend the online payment functionalities.
Things to Consider when Using Ecommerce Payment Gateway Integration Services
1. Seller Account Types
Seller accounts allow a person to accept payments through an online channel. They can be viewed as an online bank account for an e-commerce business. They can hold funds temporarily when the money is received from sale on the app, and then transfer them to a regular business bank account.
Opening merchant accounts in banks and integrating them with payment gateways is an easy task. Sellers can also use one of credit card payment gateway providers giving customers all-in-one solution and support merchant accounts.
Depending on the needs of the business; a seller can opt from two types of accounts:
- Dedicated Merchant Account
If an e-commerce or m-commerce business is run by an individual, he/she can opt for a dedicated merchant account. A merchant account is a tad bit pricier than the other seller account types and can put an additional monetary load on small budget businesses. However, the hefty price tag offers exclusive features like customer request adjustment and quicker transactions. While app payment providers have different fee structures, the seller has complete control over funds and expenses in case of a dedicated merchant account.
- Aggregated Merchant Account
This is the more popular type of seller account among mobile app business or e-commerce website owners. It provides an option to store all funds in the account, including the buyersâ€™ money. Business merchants are required to provide certain personal information for opening an aggregated merchant account. Although the transactions involved are simpler in nature, but they take longer to complete as compared to dedicated accounts.
2. Type of Items being Sold
Nature of the product or services being sold has a direct impact on the choice of the payment gateways in any e-commerce business. Payment processing methods vary when a seller is selling physical goods as against when he is selling digital goods or services. All payment methods are legit when a seller is selling physical goods, however the same cannot be claimed for digital goods. This is because digital goods are not sold through third-party payment services on the app stores.
Sellers of digital content often rely on Play Store or App Store policies for in-app purchases. A transaction involving the sale of digital goods requires users to enter platform-specific account IDs.
3. Security Certificates
Integrating payment gateways into a mobile app makes a seller responsible for the security of the userâ€™s personal data that gets shared automatically. A PCI DSS compliance certificate gives the seller the authority to warrant personal information from a buyer, and this certificate needs to be procured beforehand.
The mobile app needs to feature an information system designed specifically for storing the card data of the user. The design is then audited by PCI certified security standard council company.
Most Popular Payment Gateways
1. PayPal Payments Pro
PayPal is one of the most popular payment gateway integration services for e-commerce sites and mobile apps. New business owners who do not possess any previous online commerce experience especially find PayPal extremely user-friendly and easy.
PayPal Payment Pro allows one to create a personal account and then link it their online store or software. The transaction fee charged is 2.9% of the amount excluding certain state or country taxes. It is a widely used service globally and has a subscriber base of over 100 million subscribers.
Stripe is easily the second most popular and one of the best payment gateways for ecommerce. The unique features offered by Stripe include web-hosting journal, administrative panel access, and enhanced security. The price charged by Stripe for each transaction is 2.9% plus a fixed fee. The gateway comes with detailed documentation and is fairly easy to integrate with mobile applications.
Authorize.net is one of the oldest eCommerce payment gateway solutions. It provides services like virtual POS as well as e-Check processing along with many other features. It is one of the easiest gateways to integrate with an existing e-commerce set-up and has a large base of users in the US. It offers a host of features for merchants to track their payments.
Braintree is a one-of-a-kind payment gateway and comes with a built-in fraud protection. It offers pay-outs within two days and live customer support. It also features software development kits (SDK) written in seven programming languages, with iOS and Android support. The gateway charges a fee of 2.9% + $0.30 per transaction after the store earnings exceeded $50K.
Irrespective of what an e-commerce or m-commerce store is trying to sell, a payment gateway plays a vital role in simplifying the payment procedure for customers. At least a quarter of the shopping carts are abandoned when users find the payment process too complex or untrustworthy.
A simplified and easy-to-navigate payment process can certainly help businesses retain a larger proportion of their customers.