Modern ecommerce businesses rely heavily on sales, in order to become successful. That being said, getting paid after sales are completed is equally important to keep your ecommerce store operational. For that reason, many ecommerce businesses implement a payment gateway to help handle their payments and transactions. Payment gateway providers are middlemen for payments between ecommerce stores and online consumers.
Electronic transactions for ecommerce business involve having a payment gateway, a payment processor and a merchant’s account. These three aspects allow you to process payments on your ecommerce website. However, implanting such a system isn’t without its issues. The most common payment problems for ecommerce businesses come from inability of their payment processors and gateways to properly process transactions, as well as security issues that may hinder these transactions further. Here are a few ways you can deal with ecommerce payment problems.
What are gateways, processors and merchant accounts?
As mentioned before, these three aspects are crucial for processing electronic payments on your website. A payment gateway is an intermediary between your online transactions and your payment processor. It allows you to charge your customers’ credit cards for products or services they purchase. Think of it as the physical point of sale in a brick-and-mortar store only this one is on your website.
Furthermore, a payment processor is financial institution that provides payment processing services to ecommerce stores. They are connected to both your merchant’s account and payment gateway, in order to pass information between those two in a fast and secure manner. Moreover, a merchant’s account is a form of bank account that authorizes you to accept credit or debit card payments at your store. You can open one at the bank that offers such services or opt for one provided by your gateway or processing company.
Gateway and processing companies charge your ecommerce store for their services. That can become a payment issue for your business if their prices are a bit too steep. That can significantly impact your profits. For instance, the average fee for online retailers is 2.9% plus 30 cents per transaction. In other words, for every sale you make, the processing company takes a percentage for their services.
This isn’t a bad deal, as long as the costs of those services don’t negatively impact your bottom line. To avoid this payment problem, you should look for providers with suitable fee prices for your business. After all, you have other expenses to worry about and you’ll need to be able to keep the most of what you earn from sales.
Focus on Security
Cybersecurity is one of the most important factors in ecommerce business. Stores that handle sensitive information about their customers need to be able to protect that data, in order to ensure that their customers will be willing to make purchases at their store. If there’s a lack in proper cybersecurity, you’re not only risking customers abandoning their shopping carts, but also risking data fraud and security breaches that may cause your business to fail.
Not only that, but online consumers are generally savvier these days and they’ll simply refuse to do business with you if you lack security measures. To avoid this problem, you should opt for a service provider, such as IPSI that already have a PCI DSS compliant platform. That way, you can ensure proper cybersecurity measures for your payment gateway and processing, so that your customers’ sensitive information is adequately protected.
More Payment Options
Getting paid on time includes offering your customers various payment options. What’s more, you must be able to process various currencies as well. For example, some customers will opt for credit or debit card option, but others may want some other method that’s more convenient for them. In addition, operating on the international market means that you simply cannot process only one currency.
If you chose a service provider that cannot process multiple currencies of payment options, you’ll have payment problems on your hands. Therefore, make sure that your gateway and processing partner can handle various options, so that your customers have more choices when it comes to purchasing your items. That way, you’ll ensure that you’re paid both regularly and on time.
Integration of your payment service provider and your ecommerce platform is crucial for securing payments. If the integration isn’t seamless, you’ll experience various payment problems, such as declined credit cards, failed recurring payments, inability to process mobile payments and so on.
All of these issues means lost sales for you and inconvenience for your customers. That’s why your service provider must be able to easily integrate with the ecommerce platform of your choosing, in order to ensure that your customers can make purchases, as well as to guarantee that you can easily process transactions on your ecommerce store.
Payment problems are common in the ecommerce business world. Your store’s success relies on sales and ability to get paid. Otherwise, you’re risking a negative cash-flow and other financial issues that may ruin your business as a whole. That’s why it’s important to choose a payment processor and gateway that can handle your transactions properly.
About the Author
Elaine Bennett is a marketing specialist and a blogger. She writes about business, marketing, and finance, and she’s passionate about helping startups and small businesses grow. You can find more of her work on Bizzmark Blog.