At some point, any small business owner that wants to set up and manage their own online store would have to select a payment gateway for their store. However, many small business owners do not know what a payment gateway is or why they need one. Many are also overwhelmed by the number of solutions available online and find it difficult to determine the most important factors to look out for when selecting a payment gateway solution.
A payment gateway, in essence, is an e-commerce service that processes, verifies and accepts or declines credit card transactions on a merchant’s behalf through secure Internet connections.
Choosing the right payment gateway solution for your business can often determine whether or not your online store is successful. If payments on your online store are not optimally set up, you could lose a lot of orders through sales drop offs by unsatisfied customers or end up spending a lot of money on transaction fees and costs. Figuring out the payments end of your online store is key to the long term success of your online business.
While you make a decision about which payment gateway to use, some questions to guide you in the decision making process include:
- How much does the service cost?
- Is the payment gateway is available for online store owners in your country?
- Does the payment gateway require you to have a merchant account?
Some payment gateways such as PayPal offer their service for free if you only have a few credit card transactions per month on your
online store. You can then upgrade to a paid account as your online sales grow. Others charge a percentage rate and a fixed fee per transaction from the onset.
Additionally, some payment gateways such as Sage are available in multiple countries around the world while others concentrate only on certain regions. Also, some payment gateways such as American Express require you to have a merchant account, which is an account that you (a merchant) holds with a bank that allows you to accept payments by payment cards, typically credit or debit cards into a special bank account (your “Merchant Account”).
Some online store owners choose payment gateway providers that offer an “all-in-one” solution such as 2Checkout, (i.e. one that handles your merchant account and your credit card orders) while others choose different companies for both services.
Whichever method you choose, be sure to evaluate the various pricing options each company provides to ensure that they work for the revenue and profit projections that you have set for your online store.
If you use Yola Online Store, review this article on how to setup your payment gateways. Also, the Yola Online Store provides a list of good payment gateways such as Sage Payments, American Express and PayPal that will enable you accept credit cards.