Integrating payment methods to your online shop is a critical part so in this post, I will be waging having multiple payment gateways pros and cons. Making customer checkout easy and convenient should be a top priority for your online shop.
Multiple payment gateways help simplify the process and keep clients coming back for more. Surveys of shopper habits from Baymard have indicated 6% of customers cancel or abandon their orders if they can’t find a convenient payment gateway.
You may not think 6% is much, but that can still be a huge chunk of lost revenue. Customer who buy online often have a preferred specific payment method, which may be cash back points or Automated Clearing House payments for mobile devices.
Providing various payment gateways gives shoppers more customizable options. However, what one online shop needs may differ from others. Consider the type of products you sell. Do you sell digital products or physical items?
Are your products more expensive low-volume or low-cost products in higher volumes? A gateway’s cost per transaction can affect your profit.
Do your primary shoppers prefer a specific payment method? For instance, younger age groups may prefer to pay with the different payment processor.
Do you need a payment gateway that supports recurring payments? A payment gateway can simplify memberships and subscription payments.
Some payment gateways like Stripe automatically charge the client’s account based on intervals, such as bi-weekly or monthly.
This setup equals less trouble and increased sales. Learning the answers to these questions helps you to integrate a payment gateway to match client preferences and needs.
Multiple Payment Gateways PROS
Here are some advantages why you should implement various payment gateways.
YOU GET MORE ANALYTICAL DATA
Another pro of having a variety of payment gateways is it helps to analyze and collect extra shopper data. Specific payment methods provide a broad range of capabilities and analytical data.
For example, a one payment method could allow you to divide shoppers based on location, country, payment method, currency, and other information.
This additional data can help you make more informed business decisions and provide insight on how you can optimize every transaction.
PROVIDES SECURITY TO CUSTOMERS
Online shoppers like to feel safe when they check out, so payment gateway safety should be your top priority. Safety makes sense because the purpose of a payment gateway is to encrypt data and securely send it.
Besides sending data securely, providing various ways to pay gives customers the feeling of security.
The Baymard Institute survey found that 19% of shoppers cancel or abandon their orders online because they didn’t feel safe giving out credit card numbers on the website. Offering multiple methods of payment on your site makes clients think they can trust you.
The trust already associated with popular payment gateways like PayPal becomes associated with you.
The more payments gateways you integrate is the stepping stone to looking professional and giving a sense of legitimacy. The more payment gateways you use, the higher the level of perceived professionalism, legitimacy, and trust.
A benefit of an online shop is it allows you to sell goods to anyone anywhere in the world, unlike a brick-and-mortar store.
However, selling to other countries commonly means you need more payment gateways, which differ by currency, nation, region, and country.
As your business grows internationally, you need to have the ability to accept payments in the regions where your customers are and where you want to sell.
If you want to sell in Asia, Alipay is a popular payment processor in China. Without it, you lose a large customer base.
Multiple payment gateways make handling and converting foreign currency to your area’s currency easier with auto conversion. You also increase client trust when you make their experience convenient.
When you use one payment gateway, have you ever thought about what happens if it stops working? Can you offer another way to pay?
Using multiple payment gateways eliminates losing sales because of technical issues, and it will assist you in keeping extra records of transactions and maintain payment data. Another payment gateway could also be useful when your site experiences an uptick in sales.
Can your current system handle monthly subscriptions or memberships? Is it able to expand and adapt to your existing platform?
One payment platform isn’t likely going to meet all of your needs. By using multiple payment gateways, you get reassured, you can solve any situation you face. It also allows you to use payment methods that fit your needs at the time.
CUSTOMERS LOVE HAVING MORE PAYMENT OPTIONS
Shoppers love to have more than one payment option available. Some clients prefer methods that don’t involve having to enter credit card numbers. If you offer this payment option to shoppers, you may see an uptick in revenue.
For example, let’s say your target market prefers using PayPal because they don’t want to input their credit card information. When you add PayPal as an additional payment gateway, it’s more likely to increase your sales.
TESTING WHICH BRINGS MOST CONVERSIONS
Which payment gateway your consumer prefer? Do they prefer top payment gateways like Stripe and Paypal or lesser known ones?
A tremendous job of being an online store owner is to experiment with payment gateways to find what works best. Using several gateways lets you figure which one gives you the highest conversions.
CONS Of Using Multiple Payment Gateways
Now, that you understand the pros of implementing multiple gateways, you should learn the cons. It should be no surprise since everything has drawbacks.
These are among the top cons of multiple payment gateways:
- Managing various gateways and relationships with different gateway providers can be time-consuming and cost extra money.
- It may not increase profits as you think. You may benefit from multiple gateways, but the overall cost may exceed the revenue.
- The processing fees of multiple payment gateways can add to business expenses each month.
- You may find it more difficult to get volume pricing. Even though volume pricing is part of the package with payment gateways and gives discounts for increasing sales, when you divide the revenue between them, it will take more time to reach the needed volume.
Payment Gateways Comparison
- PAYMENT GATEWAY
- AVAILABLE COUNTRIES
- MONTHLY FEE
- TRANSACTION FEES
- KEEP BUYER ON SITE
- SSL CERTIFICATE REQUIRED
- RECURRING BILLING SUPPORT
- REFUND FEE
- CHARGEBACK FEE
- ACCEPTED PAYMENT OPTIONS
- PAYPAL PRO
- US, UK, and Canada
- 2.9% + $0.30 per transaction
- PayPal and credit cards
- 46 countries
- 2.9% + $0.30 per transaction
- PayPal all major credit cards, Apple Pay, Android Pay, Venmo, and even Coinbase
- 2.9% + $0.30 per transaction
- All major credit cards and debit cards, Bitcoin, Alipay, ACH Debits
- United States, Canada, United Kingdom, Europe and Australia
- $20 + $49 setup fee
- 2.9% + $0.30 per transaction
- All major credit cards and debit cards, and PayPal
- Most countries
- 2.4% + $0.30 per transaction
- Accept credit cards, debit cards and PayPal
Features that Payment Gateway Should Also Have
While you will get many benefits from using various payment gateways, you need a method that suits your business. For example, you may find it beneficial to use a payment gateway that creates reports for sales and works with your accounting software.
If you want to increase revenue from sales, you have to determine what items sell the best, who spends the most money, and trends by season. Knowing these factors helps you market the right products to the right target audience.
A reporting capability will allow you to manage and resolve customer disputes, chargebacks, and refunds.
Processors like Paypal let you set your preferences for customer checkout, which includes checking out by staying on your website or going to Paypal’s site.
It may seem like a non-issue, but when they leave your site to pay for their order, it can be a disadvantage for your website. A drawback is when they check out off-site, you no longer have control over the checkout.
Your site’s brand gets changed to the pop-up window on Paypal, which could cause possible revenue loss. You can’t upsell or recommend other items after a customer leaves your site to pay. This can cost you potential sales.
But PayPal is convenient and popular as many people already have their payment information saved in the payment gateway’s system.
This makes payment gateways an essential branding component as much as your site’s logo, color scheme, and design.
So think of multiple payment gateways as much more than convenience instead of setting up quickly when you select a payment processor. Since the future of eCommerce is mobile, find a payment gateway with mobile payment options.
Why Should You Use or Not Use Multiple Gateways?
As a critical part of your customers’ purchase journey, payment gateways do more than receive, store, and transmit your customers’ data.
They say something about your website. When choosing one, name brands matter. If customers don’t recognize your gateway, they’re less likely to trust it … and you.
Therefore, payment gateways are a part of your branding. They communicate something about your company, how you treat your customers, what you value.
They’re as crucial to your store’s personality as your brand name, color scheme, logo design, product page, or another design element.
So, choose wisely. Consider more than just convenience or getting started quickly. If your business model is a good one, you’ll have the future to consider, too.