5 Criteria for Choosing a Payment System for Business

A payment service provider is the connection between your business and your customers’ payments. They take care of the technical side and make it possible for you to accept payments in the way that works best for your customers.

With more commerce moving to online payments, choosing the right payment solution for your business is becoming a bigger decision. Some providers focus on keeping costs low, others prioritise security, and some offer tools to help your business grow. Your business just needs to find the right fit.

Here are the factors to consider when selecting a payment app, so take the time to choose a strong partner for your business.

Transaction Security

Transaction security involves all the different practices and tools designed to protect sensitive information during and after transactions. With the rapid growth of online shopping, it has become a top priority for businesses operating today.

Here’s what matters most when it comes to security:

Encryption

Encryption is there to keep customer information secure as it moves through your system. You can think of it as sealing sensitive data in a tamper-proof package. Look for gateway systems that use robust encryption protocols like SSL or TLS. These technologies make sure customer data stays private and inaccessible to anyone trying to intercept it.

Authentication

Passwords alone no longer cut it in today’s cybersecurity landscape. A secure payment system will offer two-factor or multifactor authentication options for the customer. This might mean sending a one-time code to a user’s phone, requiring biometric verification, or combining several methods.

PCI DSS Compliance

The Payment Card Industry Data Security Standard (PCI DSS) exists to make sure businesses handle payment information securely. Your business should choose a payment system that complies with these standards so that you’re automatically meeting critical customer security requirements.

Tokenisation

Tokenisation replaces sensitive data, like credit card numbers, with unique tokens. These are meaningless if stolen, which reduces the risk of costly data breaches. Tokenisation simplifies compliance with security standards like PCI DSS for your commerce ecosystem.

Fraud Detection

Look for gateway systems that come with built-in fraud detection tools capable of identifying suspicious activity. For example, technologies like machine learning and risk scoring analyse transactions in real-time to flag and block any unusual customer behaviour. This helps prevent losses before they happen.

Regular Updates and Patches

Even the most advanced payment system isn’t set-it-and-forget-it. Cybersecurity threats evolve constantly, and regular updates are your first line of defence. Providers that prioritise ongoing updates and patches close those vulnerabilities and address emerging risks.

Support for Various Payment Methods

Today’s consumers expect flexibility when it comes to how they pay, so you should offer a range of options that improve their experience and increase your chances of retaining them.

The most common payment methods include credit and debit cards, bank transfers, online wallets, and mobile payments. Credit and debit cards are particularly common in payment gateways because they’re widely used, easy to process, and allow customers to pay quickly. Bank transfers, while not as immediate, are still used, especially for larger transactions where customers prefer a more secure and direct method of payment.

Digital wallets are close behind as customers look for more convenient and secure ways to pay online. These wallets store payment information securely and offer one-click transactions, which are especially appealing for mobile shoppers. Mobile payments, including options like Venmo or QR code scanning, are increasingly popular for in-person transactions as another layer of flexibility for customers.

If you support a variety of payment methods, your business and commerce ecosystem actually connects with more people. Some customers prefer certain payment options for reasons like convenience, security, or familiarity. If your business gives them choices, you make shopping easier for everyone and contribute to greater satisfaction and loyalty.

However, each payment method comes with its own set of benefits and considerations, including fees and processing times. Credit card payments are processed quickly, but they come with higher transaction fees. Bank transfers, while charging lower fees, take longer to clear. Online wallets offer fast processing but could involve specific service fees or charges for certain types of transactions.

Commissions and Fees

Next, you should understand the fees involved in the payment gateway for your business.

Setup Fees

This one-time cost happens when you first sign up with a payment provider. It covers the setup and integration of their system with your business.

Transaction Fees

Each time a payment is processed, the provider charges a fee. These could be a flat fee per transaction, a percentage of the sale, or both. It’s how the provider covers the cost of handling the payments.

Monthly Fees

Some providers charge a fixed monthly fee, no matter how many transactions your business makes. If you’re processing a lot of payments, this could be worth it because it offers a predictable financial expense each month.

Chargeback or Refund Fees

If a customer disputes a payment and gets their money back, you’ll likely face a chargeback fee. This covers the administrative work involved in handling the potential dispute. Some providers charge a fee if you need to issue a refund.

PCI Compliance Fees

As we’ve said, payment gateways must follow strict security guidelines to protect credit card information. Some charge a fee to stay compliant with these standards, which is vital for keeping your business secure.

Termination Fees

If you decide to cancel your contract early, some payment gateways will charge a termination fee. This covers the cost of ending the agreement before the set term.

Additional Fees

There may be extra charges for things like global payments, currency conversion, and premium services like fraud protection. Make sure to check for any fees that may apply to your specific commerce needs.

Overall, some providers charge lower transaction fees but have higher monthly costs, which could be a good fit for businesses with high transaction volumes. Others charge no monthly fee but have higher transaction charges, which may suit smaller businesses. Keep in mind, though, that not all providers will have the same fees — or just the ones listed. It varies quite a bit.

Integration with the Platform

You want a product that doesn’t require you to overhaul your operations or create extra steps. No matter what you’re integrating with — your website, mobile app, or other commerce tools — the payment system should work well with your current setup.

A smooth integration also makes payments easier for your customers. The payment solution should work quickly and effectively with your other systems, like inventory management or accounting software, so you can avoid delays or errors for the customer. Everything should just click into place.

To make the integration experience simpler, many payment gateways offer APIs or plugins. APIs connect the payment system directly to your business systems. As for plugins, they make it easier to set things up without a lot of technical knowledge. Another important factor is the quality of the provider’s documentation, which guides you through the setup process.

Customer Service Quality

Problems can pop up at any time, and your business wants to have the right help on hand.

Support That’s Always There

Business doesn’t stop at 5 PM, and neither should your access to help. Look for a provider that offers round-the-clock support so that you don’t have to worry about disruptions. If it’s a late-night issue or a busy holiday season, you should be able to get help whenever you need it through the method that works best for you — chat, email, or phone.

Expert Support for Complex Issues

Gateway systems can be complicated, with various regulations, software, and security concerns to navigate. That’s why it’s so important to have support teams that understand how your commerce ecosystem works. A good provider will answer basic questions, but they should also offer solutions, troubleshoot problems, and help with compliance.

Personalised Support

When you have a dedicated account manager who gets your business, it makes all the difference. These reps aren’t there for general issues; instead, they get to know your specific needs and goals. Because of that, they give advice that’s more relevant to your business and suggest solutions that actually work for you. This kind of personal touch helps create a stronger, more trusting relationship with the customer and gets you the support you need.

How to Choose a Payment Gateway for Your Website and Online Store

A payment gateway is important because it’s a part of your website’s experience. Think about how it integrates into your checkout process. Does it feel like a natural part of your site, or does it stick out like a sore thumb for the customer? A gateway that matches your brand’s style and makes the checkout easy and consistent goes a long way in building customer trust.

It’s easy to choose a service provider that works well for your current needs, but will it still work considering the growth of your company? Look for a payment gateway that can adapt to your future plans and incoming payments, whatever they are, such as adding new payment methods, customising the checkout experience, or handling more transactions as your business expands.

The easier and more trustworthy your payments feel, the better. A payment gateway that customers recognise or one that offers a simple guest checkout makes the process feel more secure and straightforward. Plus, it encourages them to complete their purchases.

How to Connect Payment Gateways to a Website

1. Pick the right payment gateway

We won’t go over the same details again since you’re already familiar with the criteria.

2. Set up your merchant account

Some payment gateways handle both payment processing and merchant accounts, so you don’t need to set up a separate one. In other cases, you’ll need to create a merchant account with your gateway provider to manage payments.

3. Get your API keys

Once your account is set up, you’ll need API keys — these are codes that link your website to the payment gateway. They help securely connect your website and the gateway, so be sure to keep them secure.

4. Integrate the gateway

Next, you’ll integrate the payment gateway with your website. If you’re using platforms like Shopify or WooCommerce, there are easy plugins to make this part simple. If you’re working with a custom site, you may need to add some code to connect it. Many gateways offer tools to make the integration process smoother.

5. Test everything

Before you go live, test the payment gateway. Most providers have a “sandbox” or testing environment where you can simulate real transactions to see if everything is working correctly.

6. Go live

Once testing is complete and everything checks out, you’re ready to launch. Customers will now be able to make payments through your website. Throughout this process, don’t forget to prioritise security, especially for the customer.

What to Choose: A Payment Gateway or a Payment Aggregator

It might be a bit late for definitions, but there are some important distinctions worth noting. A payment gateway is a service that securely processes transactions between the customer’s and merchant’s banks. It encrypts payment details and authorises the transaction. However, to use a payment gateway, you need to set up your own merchant account with a bank, which gives your business more control but also requires more setup and compliance with security standards.

Payment gateways can be hosted, self-hosted, or API-based, and each offers different levels of control and customisation. Hosted gateways redirect customers to a separate payment page, and self-hosted gateways keep the process on your site. API-based gateways allow for full integration and control over the payment experience.

Now, a payment aggregator simplifies payment processing by allowing businesses to accept payments without setting up a separate merchant account. The aggregator uses its own account and processes payments from multiple sources (credit cards, online wallets, bank transfers).

There are full-service aggregators, niche aggregators, and mobile aggregators, and each caters to different payment methods or industries.

	Payment aggregator	Payment gateway
Merchant relationship	Uses the aggregator’s bank relationships	Requires a direct relationship with a bank
Integration	Single integration for multiple payment methods	Separate integrations for each method
Risk management	Aggregator handles fraud and chargebacks	Gateway handles secure data transmission
Settlement	Aggregator manages settlement to the merchant	Merchant’s bank handles settlement
Setup complexity	Easier to set up, less technical complexity	More setup is required for customer security and compliance
Customisability	Limited options for customisation	More flexibility to customise customer checkout and payment flows

When to choose a payment gateway:

• Established businesses with high transaction volumes and the need for control over payments.
• Customisation needs for features like custom checkout or specific fraud prevention.

When to choose a payment aggregator:

• Startups and SMEs that need an easy, quick setup.
• Low transaction volume businesses or those looking for lower setup complexity.

Takeaway

Choosing the right payment gateway is essential for your business. It goes beyond just accepting online payments because it affects your cash flow, customer experience, and overall success. When you’re looking at possible gateways, consider things like security and fraud protection, the variety of payment methods available, and the pricing. Make sure the gateway works smoothly with your systems and that you’ll have support when you need it. This choice can shape your business’s future, so take the time to find the best online payment gateway for your current and future circumstances.