Written by Jon Bergan on the 17/03/2009
To most people, payment gateways are quite a mystery. We're not quite sure what they do or why we need them yet every web designer developing an online store will rattle the term off at us at one point or another. Given that these "gateway" things seem to be so important, I think its best that we spend a moment getting to understand what it is they do, why they are so important and which providers you should be using. After all, if you are planning on starting a business online, you're going to need to use one of these little beauties at some point in time.
Let's get right into the thick of things. Payment gateways essentially provide a means for online transactions to take place between an online store or other internet based e-commerce service and a person's bank account. In other words, they are the gateway for funds to be transferred from a user-submitted credit card on an online shop through to the store owner's bank account. They may also offer a wide range of other services and features but at their core, this is their main function.
As an owner of an online store, you should provide your customers with the ability of processing their payments online. This not only streamlines things at your end as you no longer have to worry about actually making the transaction but also allows the customer to feel confident that their order is placed and paid for on the spot.
There are many different types of payment gateways out there. Some are offered by the banks we're with (such as Westpac or ANZ) and others are offered by third party companies such as eWay, PayPal, WorldPay and others. From a store owner's point of view, it is often best to go with the option that streamlines things for your customer. Forget about what your bank says and don't worry too much about things at your end – you need to focus on your customers needs and expectations.
As a customer, you don't want to be sent to another site during checkout to make your payment nor do you want any third party logos appearing that may confuse you. Customers are purchasing an item from your store because they feel safe and secure about doing so and sending them to third party sites or displaying logos that aren't your own will usually raise concerns with your customer base. With this in mind, it is best to use a payment gateway that can work and operate completely behind the scenes. Most gateways will provide this service but some, such as many bank gateways, will not.
When it comes to choosing a payment gateway, there are a number of factors to take into consideration. Fees are obviously a big one as many will charge yearly fees plus fees on a per transaction basis. While this is alright, it's important that you're not paying too much either. Secondly you need to ensure that the gateway will operate behind the scenes as previously mentioned. Finally it may be worth your while to see what other services the company can offer as you may need these down the track, such as recurring payments.
Below are some payment gateways we would recommend you consider trying.
First on our list is an Australian-based payment gateway named eWay. They offer a wide range of services from standard payment processing to ongoing payments by installments. eWay's payment gateway also works entirely behind the scenes should you choose to use that option. They also provide a front-end interface if you'd like your customers to visit their site to enter their credit card details. Every facet of online payment processing has been covered by eWay and their staff are more than happy to assist developers in incorporating their solution into any type of online store. For more information, please visit eWay.com.au.
PayPal is a great way to allow your customers to pay via credit card or direct deposit. Although it does offer some behind-the-scenes functionality, most users usually send their customers across to PayPal's site to process their payment. This probably isn't so bad with PayPal as it is a highly recognized name and most people feel safe using this service, but it's still not as good as a streamlined option as mentioned above. For more information, please visit PayPal.com.au.
Finally, if you're after a payment gateway at a bank level, Westpac's PayWay is quite a good option. It provides both front-end transactions (similar to eWay) and also offers a behind-the-scenes solution for more advanced customers. Westpac also offer a wide range of services that coincide with their e-commerce solutions which may assist in the way you run your online store. For more information, visit PayWay.
At the end of the day, your customers need to feel confident in purchasing from you. Selecting a payment gateway that strips them of this confidence will not only result in lower sales but will also cause people to talk. Choose a payment gateway that works for your customers, for your business and has the additional services to allow your organisation to grow because changing payment gateways down the track can be a right pain.
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