There's just about two weeks left until Small Business Saturday, so we're continuing our monthly mission of branching out in terms of the content we offer here for small businesses. Today, we're talking payment gateways.
Picking the right payment gateway for your online business is an important,but confusing, task. Not all of them are created equal. Each provider has fees and features that are best for different industries or company sizes.
If you're overwhelmed by all of the options, don't fear! Formstack, an online form building platform, has put together a handy website comparing several of the most popular payment gateways on various aspects like transaction fees, accepted cards, and recurring billing.
But for new small business owners, you may not be ready for that yet. Maybe you're not at all familiar with payment gateways, let alone how to choose the best one for your small business. If that's the case, this infographic Formstack has created is perfect for you. It's a great basic introduction to the factors you need to consider when choosing a payment gateway.
Let's get down to business…
What is a payment gateway?
As explained by Shopify, a payment gateway for an ecommerce company is "a service that authorizes credit card payments and processes them securely with a user's merchant account."
Why should small businesses care?
You should care about ecommerce payment gateways even if you have a brick-and-mortar store. More and more people are doing their regular shopping online as it gets easier. As this happens, you may lose loyal customers to online stores, and neither of you want that. People may prefer your products, but shop online anyway because of the convenience.
However, if you have a brick-and-mortar store and an online one, that won't happen. You'll also gain more customers since your products are being exposed to an entirely new base of potential customers that's not dependent on physical proximity to your store.
The three most important things to consider when choosing your business's payment gateway are:
- Transaction fees: Does the service you're considering charge a flat fee or percentage fee per purchase? If so, how much is it?
- Card types: What credit cards or forms of payment does the payment gateway accept?
- On-form payments: If your customers will be filling out a form to make a purchase, will the gateway be able to collect payment information within the form or will customers have to be redirected to another page?
Remember that more is not always better. You may be leaning towards one option because it accepts payments from more countries so you assume it's better. But you may not be a hit in some countries, or maybe some other services you use aren't available in those countries, so it's a moot point. Or maybe you're attracted to a service that charges a low percentage transaction fee. But if you're products tend to be on the higher end of the pricing spectrum, it may end up being cheaper to check out services that charge a flat rate for a transaction fee.
The bottom line: the best solution is different for every business.
Here's more on how to choose what's right for you: