How to choose the right ecommerce payment gateway provider

A payment gateway is a service that allows your ecommerce site to accept payments from customers. It’s the bridge between your website and your payment processor, ensuring that customers’ payment information is securely transferred, verified, and authorized. This can be for credit and debit card payments, digital wallets, bank transfers, and other payment methods. The payment gateway acts as the first step in the payment journey, initiating the transaction and sending the necessary data through the payment flow to complete the purchase.

Let’s take a look at some of the key aspects to consider.

Every point of friction at checkout translates into reduced conversion for your payments. Therefore, most payment gateways invest in boosting the customer experience at this step, exploring different ways to ensure that payments are successful. Here are the key features that you should look out for in your payment gateway:

• One-click payments or recurring billing for repeat customers.

• Checkout experience – checkout pages directly hosted on your website tend to have higher conversions as compared to a redirected page.

• Mobile optimization ensures that checkout is effortless and seamless.

59% of Singaporean shoppers will abandon their shopping carts if they are unable to pay how they want. Offering a variety of payment methods can significantly reduce cart abandonment rates. At the very least, your gateway should support credit and debit cards, and digital wallets such as Apple Pay and Google Pay™️. 

As Singapore is a relatively small market, many local ecommerce businesses may start selling internationally from day one. However, before accepting international payment methods, your business must ensure that the payment gateway of choice supports it. There are different ways of accepting international payments, like cross-border transactions or local acquiring.

It is essential that your payment gateway can support a range of payment methods, not only for Singapore, but also for the international markets you sell in, so you don't end up with a high rate of abandoned shopping carts and disappointed customers.

As an ecommerce company, your customers are putting their sensitive information in your hands, and any data breach could be catastrophic. The gateway you select should adhere to the following key security standards:

• PCI DSS: Your gateway should be PCI-compliant, meaning it follows strict guidelines to protect credit card data.

GDPR, PSD2, and SCA Compliance: If you operate in the EU, compliance with the Payment Services Directive (PSD) and strong customer authentication requirements is mandatory.

Payment gateways come with a range of fee structures. Percentage-based fees take a small percentage of each transaction. If your average order value is high, this can add up quickly. Fixed fees can be more suitable for high-volume, low-value transactions where a flat rate per transaction is more cost-effective. 

Some fee structures may be a combination of both.

Beyond percentage and fixed transaction fees, there are also different types of fees, including setup fees, monthly maintenance fees, chargeback fees, and additional costs for features like risk management or 3D Secure.

To find the fee structure that best suits your situation, analyze your transaction volume and average order value to determine the best pricing model, and choose a gateway that aligns with your business size and sales patterns to maximize profitability.

It’s important to note that not all payment gateways have built-in risk management tools. If your gateway does have a fraud solution, it is important to keep in mind a few key considerations:

• Payment fraud is constantly evolving, and your strategy to managing it needs to evolve too. 

• Stopping all fraud is not realistic; you want to strike the right balance between stopping as much fraud as possible without stopping genuine transactions. 

• How you approach risk rules and the amount of risk you can tolerate is different for every business. 

It’s worth discussing with your prospective gateway provider how to best approach risk management for your specific business needs, and how their tools can help.

Understanding your payments data is essential for optimizing your ecommerce business. A payment gateway that offers detailed analytics can provide insights into transaction success rates, customer behavior, and revenue trends. Look for a gateway that offers real-time reporting and advanced analytics to help you make data-driven decisions.

Different gateways offer different levels of flexibility when it comes to integration options. You can either integrate with the gateway directly through one or multiple APIs, or with your ecommerce platforms through plugins, if the partnership exists.

Further, you should consider how your payment gateway will fit into your existing tech stack. If you plan to scale your business, choose a gateway that offers flexible integration options and can adapt to your needs as they evolve.

Adyen is a financial technology platform that combines a payment gateway, processor, and acquirer into one, simplifying the payment process for ecommerce businesses. Here’s how Adyen addresses some of the key considerations of how to choose a payment gateway. 

Global reach

Gain instant access to popular local payment methods with one integration. Adyen ensures you can offer the payment methods and currencies that customers are looking for.

All-in-one solution 

Adyen offers a single API connection for payments, allowing you to manage payments, risk management, and authorization optimization in one place. Adyen also offers plugins for a range of popular ecommerce platforms. 

Data-driven insights

Adyen’s platform provides advanced data and analytics, enabling you to enhance your authorization rates and optimize the payment experience.

By choosing a provider like Adyen that handles the entire payment flow, ecommerce businesses can benefit from streamlined operations, higher conversion rates, and a more efficient payment process.