12 Factors to Consider While Choosing A Payment Gateway For Your E-Commerce Store


Over the last few years, e-commerce websites and mobile applications have been gaining huge success; and, so are payment gateways. Making online payments for products and services on a website is no longer a daunting task for customers.

According to research, 86 percent of customers make online purchases via credit or debit cards, and more than 60 percent consider it to be their favored payment method when making a purchase.

A payment gateway refers to the code that interfaces your shopping cart with the credit card company. It simply helps in the processing of credit cards and ensures the payment is made. It acts like a connecting door, through which transactions can be done automatically from the customer to the retailer.

Some of the examples of recognized payment gateways are BrainTree, PayU, Amazon Payments, Stripe, PayPal, Skrill, just to name a few.

With the help of payment gateways, it essentially becomes easy to accept several types of electronic payments. They offer a complete payment solution, instead of you having to set up and run all the software, hardware, connections, and security. For many small-scale merchants, the ease of a payment gateway is a good way to allow e-commerce Solutions.

Here are some of the questions you should ask yourself before choosing a payment gateway:

  • What will be the service cost?
  • What features do they provide, for example: fraud security, virtual terminals?
  • Is it compulsory to have a merchant account for your chosen gateway?
  • Does the payment gateway support your online store’s country?

To consider these queries, it is important to understand how the entire process works.

A step-by-step overview of how a payment gateway works

Users are required to pay for subscriptions, advanced functionality, and SaaS.

  • A form is provided on the website for registration, is filled out including all the payment information. A preferred payment method is selected.
  • Payment information collected by the gateway is securely transferred to the processing bank for approval via SSL.
  • The processing bank sends the request via MasterCard or Visa’s payment network, on to the card issuer. Other cards like Discover and American Express, act as both card issuers and processors and make the authorization process easy.
  • The card issuer approves or declines the transaction, and sends its response through Visa or MasterCard, to the processing bank. Then, the processing bank forwards the response to the merchant through the gateway, who finishes the transaction accordingly.
  • If the transaction is successful, then the merchant deposits the receipt with the processing bank.
  • The payment processor adds the funds to the merchant’s account and adds the transaction to Visa/MasterCard for a settlement.
  • The company issuing the card then pays the processing bank, while simultaneously taking out the funds from the card issuer’s account.
  • The issuing bank adds the transaction to the cardholder’s account and demands the payment in a monthly statement or debits the amount immediately.

Finding the right payment gateway to suit your business is a time-consuming process, given the extensive list of providers. Payment gateways have been designed to confirm all of the above-outlined operations and approvals, and guarantees that both parties, you and the user, are protected at the time of processing.

Here are 12 important factors that should be considered when choosing a payment gateway:

1. Choose the appropriate payment flow

As your business keeps growing, your payment gateway should be able to scale effortlessly. You need to set-up a payment gateway on your website to let customers pay directly, or be redirected to the merchant.

You need to select the most appropriate payment flow for your business in order to add a payment gateway to a website. The main payment gateways offer the following options for the customers making payments:

  • A site with an integrated payment form, with details being sent to a secure payment gateway: It is an option through which payment details are sent, providing a better customer experience. The form contains all the required information and passes it to the gateway provider by calling the integrated API. This may require additional programming, and therefore, boosts the overall cost of payment gateway integration.
  • iFrame or redirect for payments: Either customers are redirected to a secured hosted payment page, or they are required to enter their information in an embedded iFrame on the website. The gateway provider will recommend you through several means such as HTTP call back. Developers can leverage this option as it takes less time to integrate.
  • Having an Escrow system: This payment gateway option suits certain businesses, by building a secure escrow system within your platform for withholding funds before the right authority is granted by the admin. For example, if your platform works as an intermediary in trading operations, or serves as another type of online marketplace such as a bidding portal, you might need to create a dedicated on-platform store, where the traded funds of the two parties will be stored safely, and arbitraged while the deal is under improvement.

2. Choosing the correct product

When it comes to selling products and services online, a payment gateway is required on every website. It allows customers to buy the product or service via a common form of payment, such as credit card, debit card, or an electronic check that includes budgetary data. While choosing the right product, you should consider how adaptable your payment solution is, while keeping its security in mind.

3. Make your customers feel safe and secure

As more customers turn to online shopping, it is important that you offer them an experience that balances with what they are familiar with from big sites, even if you are running a small business. For instance, some payment gateways enable you to customize the whole payment experience to reflect your brand’s typeface, logo, and color palette. A few customers are not aware of the fact that they might be redirected to a third-party website temporarily to process their transactions safely. While selecting a payment gateway, make sure your platform provides robust security features, and look for a PCI-DSS certification such as anti-fraud protection.

4. Consider fees and service agreement wants

As pricing for payment processing and payment gateways are commonly based on the type of transactions a business conducts (online or combination of virtual and, in-person), and even business sales, revenue consistency, transaction frequency, and the markets served; it’s crucial to compare how the business model coincides with the payment provider, or gateway’s fee structure. A few services may require setup fees and contracts, or they may build transaction fees if the order and transaction volume that was expected when service was built-up, isn’t met.

5. Ensure effective transactions

According to a survey conducted, more than 25 percent of customers will abandon a buy if they are compelled to register for an account to complete it. If your checkout procedure uses a third-party shopping cart with an enrollment procedure built into the cart, ensure that you can make it an optional factor that allows for “guest” checkout. Likewise, your payment gateway should enable you to remove unwanted form fields for easy checkout. Big eCommerce businesses expect that online retailers are able to boost conversions by 50 percent, by removing redundancies such as wanting the customer to enter both billing and shipping information, even if the postal addresses are the same.

6. Make checkout easy on all devices

According to the estimation of eMarketers, approximately 15 percent of e-commerce sales were conducted on a mobile device in past 2-3 years, and that figure is increasing steadily. As you evaluate your payment gateway options, make sure that you are able to provide an active checkout experience that is receptive to different mobile devices, and changes according to the size and resolution of a device.

7. Multiple features to choose from

Payment gateway service providers offer several features, depending on your business needs. For example, if you need to offer your products and services around the world, your payment gateway should be able to accept several credit cards, debit cards and currencies, based on different countries.

8. Easy integration process

When it comes to performing a financial procedure, it is necessary to integrate payment processing into your website. In many cases, the ideal solution is to choose a provider that will send your customer to the third-party site to enter credit card information. The service provider sends it back to your online shop, once the transaction is complete.

9. Merchant Account

It is crucial to have a merchant account in order to complete the whole payment process channel of a website. What is a merchant account? It’s used when customers make an online payment through a payment gateway; the money is transferred to separate retailer account. This is different from the merchant’s actual bank account. The cash stored in a merchant account has to wait until it gets approved by the customer’s processing bank. After approval, the money is transferred to the merchant’s bank account. Even though it seems to be an extra task, payment gateways that do not require a merchant account, that transfer money directly to the dealer’s account, will probably charge a higher processing fee.

10 .Recurring Billing

This allows you to set up an automatic billing cycle for clients who work on registration. Recurring billing is an absolute necessity for companies with monthly payment plans. Moreover, non-profits have found utility in recurring billing, as this functionality enables organizations to effectively collect funds from regular contributors.

11. Mobile Payments

In the coming years, mobile payments will replace credit card buying, even in point-of-sale environments. Payment gateways, with the help of mobile payments, enables buyers to transfer money using their mobile phones, either with a top branded apps or with a mobile-optimized site. Though this is a feature offered through the assigned payment gateway, it operates similarly and offers the same security measures.

12. 24*7 Customer Support

There are several payment services that do not provide any customer support. In this situation, users need to follow manual instructions to fix a problem. To avoid that situation, check whether the provider offers live technical support, at least within standard working hours, so that you can quickly resolve any technical problems.


Selecting and then executing the right payment gateway isn’t that tough or cost-restrictive if you understand your business needs. By doing it correctly, you can have an immediate and positive impact on your customer’s experience, as well as, your cash flow and profitability. All you need is to do proper research and consider the above-discussed factors, before choosing and implementing the right product for you.

We hope this post will help you pick the right payment gateway. For more clarity on payment gateways or if you require any digital assistance, feel free to email us at [email protected] or drop us a message in the comment section below.

Lalit Singla

About the Author

Lalit Singla is working as Project Manager at Net Solutions since the last 5 years with over 10 years of experience in LAMP Stack. His expertise lies in Enterprise eCommerce and custom database driven development. In his free time, he enjoys listening to classical music.

Leave a Comment

Michelle Celocia

2:45 PM, Nov 07, 2018

Kindly answer me sir.
What are the Factors that Influence the Choice of Payment Methods of Online Shoppers?

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