Before eCommerce, most businesses placed orders by office phone system and fax. Payment was done through paper checks, money orders, wire transfers, or pre-approved credit with the bank.
Today, digital technology has transformed the way we do business. Cash usage is dropping, and business customers of all types are moving online to perform purchases. These customers are located in different parts of the world, and pay for their purchases with diverse payment methods and digital wallets. If your business doesn’t cater to these needs, the ones that do are only a click away.
The Payment Gateway
An eCommerce payment gateway allows eCommerce sellers to facilitate reliable, secure transactions. Any eCommerce website requires a payment processor which connects the seller to the banking institution. A payment gateway is a conduit between the payment processor and the eCommerce website, which accepts or declines payment. However, payment gateways do a lot more than that. They enable sellers to offer their customers a seamless, friction-free purchase experience.
Unlike in B2C, the average B2B order is larger, worth more, and there’s more of them. Payment gateways, too, play a more important role. That’s why B2Bs need to approach payment gateway selection carefully. At first glance, you may think that integrating the first suitable payment gateway to your eCommerce store will suffice. However, payment gateways differ greatly from one another. They have different fees, service offerings, supported payment methods, locations, and currencies. Additionally, new technologies and customer expectations are constantly evolving, and payment gateways must keep up with these changes.
Things To Consider To Choose A Gateway:
If you engage in eCommerce, your customers can be buying from anywhere in the world. Since payment gateways operate with banks in various jurisdictions, they have to deal with numerous restrictions. Thus, many payment gateways don’t support merchants or their customers in every country.
For example, if you sell within the continental United States, Stripe or PayPal cashback will do. If you’re dealing with African and Middle Eastern countries, you’ll need more complex payment gateway solutions, which can include stacking and integrating multiple solutions.
B2C customers like to pay with their preferred payment method. B2B customers, on the other hand, need to follow strict payment requirements, or they’ll take their business elsewhere. While credit cards are mainstream in B2C, that is not the case for B2B businesses. Buyers used to paper checks will likely be more receptive to e-checks and ACH transactions.
In either case, business sellers must support all payment methods, digital wallets, locations, and currencies demanded by customers. Business requirements and payment preferences change, so your payment gateway must be flexible to accommodate these changes.
Customer expectations are on the rise. Regardless of what they’re purchasing, buyers expect a smooth, frictionless experience. They look for fast-loading and mobile-friendly sites that will not direct them to third-party websites to complete payment.
B2B organizations usually sell to vastly different business entities. Customers can require different payment terms, conditions, payment, delivery and invoicing options. This places additional demands on the accounting department and business owners, necessitating a careful flow of information from one system to the next.
It’s rare to find a “one-stop shop” payment gateway solution for complex use cases. In this case, you’ll need to “stack” your payment gateways, in other words, use multiple gateways together. This offers customers numerous options of paying you, which leads to fewer abandoned carts and more sales.
Many businesses have requirements that gateways can’t meet on their own. Look for a gateway with a robust API and an extensive list of integrations. If you’re using a specific type of accounting software where you batch process payment information, or require financial reporting, make sure your gateway can help you accomplish this.
Fees And Charges
Just like in B2C, B2B payment gateways will offer different service charges. However, since B2B order sizes and frequencies tend to be bigger, you must pay greater attention to transaction and commission charges.
Most payment gateways will charge for setup, transactions, payment processing, or a flat monthly fee to use their services. Some payment gateways are free, but they usually have limited features, reporting, and are tied to proprietary systems. Integrating these systems is usually difficult, if not impossible.
Merchants face many challenges, and security remains one of the most important ones. Technological advancements bring with them security risks, and it can get challenging to keep track of rules, regulations, location-specific financial and privacy laws. Ensure your payment gateway stays on top of all security-related issues and keeps you well-protected against surprises.
Misunderstandings, payment disputes, and chargebacks are often frustrating, so consider how you’ll maintain a clear line of communication with your payment gateway. Examine how easy it is to reach support and what support options are available. A payment gateway with round-the-clock support with transparent wait times suggest a trustworthy service provider.
Your gateway and eCommerce platform should work together seamlessly. When shopping for a payment gateway, ask them about their integration experience with your eCommerce platform. Similarly, include questions about payment gateways during your eCommerce platform selection process.
You selected a payment gateway that checks all your boxes. What’s next? Businesses grow, change, pursue new opportunities and pivot to new markets. Will your payment gateway match your needs in a few years’ time? Consider the overall flexibility of your gateway, whether or not you can add more currencies, payment methods, and integrate it with other systems as your needs change.
Poor experiences at checkout are a prime reason for abandoned carts. Yet, this allows eCommerce businesses a unique opportunity to offer customers incredible value. Customer expectations are rising fast, and eCommerce merchants must juggle seamless payment experiences without sacrificing back-office efficiency. Payment gateways enable merchants to streamline checkout experiences and remove friction, leading to greater conversions and repeat purchases. Approach your payment gateway selection with this in mind and you’ll set your business up for success.