Key Takeaways:
- Payment gateway technology is essential for successful retail operations
- Smooth, fast payments through a choice of methods deliver stronger customer experiences
- Security, compliance and flexibility are key to a good solution
- Good payment gateway providers can support with expertise and integration
A Comprehensive Guide to Choosing the Right Payment Gateway Integration Services
The best eCommerce experiences around are those that deliver the most seamless, intuitive and stress-free experiences, all the way through the customer journey. Towards the end of that journey, payment gateways have a key part to play in enabling those experiences.
Payment gateway technology ensures that customers all over the world can make purchases securely and efficiently. This makes them vital for enabling eCommerce success in a truly global market - hence why the market for the solutions is growing at 12.6% a year. This guide will help you work out how to choose the best payment gateway integration services for your organization.
What is a Payment Gateway Integration?
Payment gateway technology allows customers to pay for goods and services with debit or credit cards. This can be online in the form of payment processing portals, or in physical stores through card-reading terminals and devices. The security and encryption technologies built into them ensure that these transactions can take place without risk of fraud or accidental loss of funds.
Integrating payment gateway technology into wider retail and eCommerce systems is therefore essential for smooth, secure purchasing that consumers can have confidence in.
How Do Payment Gateways Work?
When implemented online, payment gateway technology works by securely receiving the credit or debit card details into a payment page. This can either be through a payment page hosted by the gateway, or through information being passed to the gateway through encrypted entry fields.
These encrypted card details are then subject to anti-fraud checks, after which they are transferred to the business’s acquirer along with the transaction details. The acquirer then passes the information on to the relevant card provider, from which the transaction is authorized or declined as appropriate, and the decision is sent back to the payment gateway.
All of this is conducted in a matter of seconds, so that customers can complete payment quickly, or try an alternative if their transaction is declined.
The Importance of Security Measures
Security is the top priority for any payment gateway, as without it, vital funds and customer data could be at risk of loss or theft. For that reason, the best payment gateway providers will always be able to demonstrate a strong commitment to:
Encryption:
Payment gateway solutions will include either symmetric or asymmetric encryption. The former uses one common key for locking and unlocking data, while the latter uses differing public and private keys. Good solutions will favor asymmetric encryption thanks to the extra privacy involved.
Fraud detection:
Several different technologies come together to reduce the risk of fraud in payment gateways. These include the Card Verification Value (CVV) codes on the back of customers’ payment cards; the 3DS2 security layer that requires customers to enter one-time passwords; and further protection behind the scenes such as device fingerprinting and IP fraud scoring.
PCI DSS compliance:
The Payment Card Industry Data Security Standard ensures that businesses always securely process, store and transfer card information, helping to protect data and reduce risk along the way. Any good payment processing provider will be able to demonstrate full compliance with this.
Why is Payment Gateway Integration Important?
Payment gateway integration is critical for operational efficiency and customer satisfaction, in several different areas:
Simplified Financial Management
By being able to manage virtually any type of payment through one digital platform, businesses no longer need several different bank accounts or digital wallets to manage payments. As a result, the admin burden on finance teams can be reduced, giving them more time and capacity to devote to other areas.
Secure and Convenient Payment Processing
Payment gateways can also handle associated processes like validations, anti-fraud measures, chargebacks, tokenization of card information, and currency conversions. These functions take much of the stress and friction away from purchasing processes, which can make a real difference to customer loyalty and satisfaction.
Global Market Access
International payment gateways break down many of the geographical barriers to retail and eCommerce. They can facilitate payments across a vast range of customers and countries, potentially extending all over the world, therefore opening up new markets and opportunities for retail businesses.
Integration with eCommerce Payment Solutions
Payment gateway technology works best when integrated with eCommerce platforms, so that all the dots of a purchasing process can be joined together. This supports the stress-free and seamless sales journeys that many customers are looking from, from initial browsing through payment to delivery.
Customer Trust and Confidence
According to The FinTech Times, 83% of consumers have concerns around how their card details are processed and stored during transactions. The same research has found that 34% believe security and encryption are the most crucial factor in enabling positive online payment experiences. Choosing a payment gateway that is secure can therefore not only minimize risk, but also maximize customer satisfaction in a market where it’s never been easier to shop around.
Why is Payment Gateway Integration Important?
There are three main types of payment gateway technology, and understanding the differences between them is key to working out which one might be best for your organization:
Hosted Payment Gateways
A hosted payment gateway directs customers away from checkout pages towards a separate payment page, which is hosted by the payment service provider. PayPal and Amazon Pay are good examples of these, and while they add a degree of separation to the process, they do give the gravitas and customer confidence of a recognized name and provider.
Self-hosted Payment Gateways
A self-hosted payment gateway collects transaction data within the website of the retailer for a more integrated and self-contained experience. Leading examples include QuickBooks and Shopify. While it gives businesses complete control over the full payment and checkout process, it also means that retailers are responsible for maintaining security and complying with regulations like PCI DSS.
API-based Payment Gateways
Payment gateway APIs represent a relatively simple way of adding payment processing functions into websites and mobile applications. The ability of payment processing software to easily communicate with the eCommerce applications means payment experiences can be improved and managed with ease. Stripe - a payment partner of Ciklum - is a leader in this field.
How to Choose the Right Payment Gateway?
As mentioned above, security, customer experience and the ability to handle global transactions are all key parts of a successful payment gateway deployment. But these are only part of the story: there are several other important things to look for when selecting a payment gateway provider, including (and not necessarily limited to:
Transaction Fees and Costs
There are a range of different fees and costs involved with payment gateways, such as setup fees, transaction fees, chargeback and refund fees, charges for compliance and termination, and in some cases a monthly fee for the service. These can quickly add up to a substantial proportion of each transaction, so gaining full clarity of upfront costs as early as possible is crucial.
Features and Integrations
A good payment gateway provider will be able to demonstrate a comprehensive range of features and integrations, such as being able to handle recurring payments (useful for memberships and subscriptions) and handling multiple currencies.
Customer Service and Support
An important part of evaluating a payment provider’s capabilities is to assess their customer support; in particular, the ease of contacting them, the range of times that they are available, and their ability to resolve issues effectively.
Security and Compliance Standards
Any good payment gateway provider will hold a range of certificates and credentials that confirm their commitment to security and compliance. Those that are especially important include the Payment Card Industry Security Standard (PCI), Payment Services Directive 3 (PSD3) and General Data Protection Regulation (GDPR).
Common Challenges in Payment Gateway Integration
There can be many hurdles in the way of successful payment gateway implementation and integration. Security and compliance are among them, as is so often the case with any technology deployment that handles sensitive customer data.
But there are also pressures from the marketplace, too. In a global retail landscape, businesses are increasingly expected to compete internationally, and to work hard to retain market share against new digitally-driven competitors. Add in the ever-rising expectations of consumers, and it becomes clear that an approach of continuous improvement, and constantly searching to expand payment gateway capabilities as far as possible, is critical.
In Summary: Why Choose Ciklum for Payment Gateway Integration?
Navigating those challenges is where a good payment gateway provider comes in. They should be able to support payments across a full range of payment methods and currencies, and understand where and how to embed gateway technology into your existing digital footprint and customer journey.
Ideally, they will work closely with your current core team to provide skills and expertise that you may lack in-house, and ensure you have everything you need to develop and implement the right solution. Every retail business is different, so gaining that specific understanding is important for driving the ideal solution for your needs.
Talk to the Ciklum team to discuss how we can support your organization with payment gateway technology, and read this blog on the key actions to take when deploying new payment systems.
