The Pros and Cons of Having Multiple Payment Gateways for Your Online Store
What is a Payment Gateway?
A payment gateway is a third party or merchant service that processes online payments for or from any of the available options - credit card, online banking, etc. - for ecommerce platforms, in a secure manner. Among the popular payment gateways used worldwide are PayPal, Amazon Pay, Stripe, Alipay, and Payoneer.
With more payment gateways available for ecommerce transactions today, it is only advisable for business owners to incorporate multiple payment gateways to enhance their customers’ user experience when shopping online. Here are the pros and cons of integrating multiple payment gateways to your online store.
Research shows that the incorporation of multiple payment methods can boost the conversion rate of your online store by up to 30 percent. Offering a wider selection of payment alternatives enables customers to choose their preferred option, resulting in a lesser cart abandonment problem. Customers may have their preference due to security concerns or familiarity, and as sellers, it is our job to ensure that our customers feel secure and comfortable about making purchases on our site.
Selling online gives you the opportunity to reach new markets around the globe every day. Assuming that you have international customers browsing through your store, it is a smart choice to give them the liberty of choosing their preferred payment option based on what is most familiar to them in their region. For instance, Alipay is the preferred payment gateway for customers from China, while PayPal is more popular in the United States and Europe. Assisting them by making their transaction more convenient will also boost your brand’s credibility.
Having potentially diverse customers from around the world paying for your products is something that you should capitalize on. It can be a good way for you to collect data on their demographics and currencies to better analyze the opportunity for you to upscale your business globally, while gaining new information to create more accurate buyer personas for your business, and subsequently making your targeting more effective.
Integrating a payment partner onto your site is not as easy as it seems. There are multiple steps to successfully integrate a payment gateway, and the steps and requirements may differ by merchant. So, that means you will need to integrate each gateway individually, and don’t be surprised if it takes more than one try. On top of that, you will need to monitor developments of each merchant as there may be upgrades and such to incorporate or reintegrate.
Each merchant charges differently. Some may have a fixed monthly fee, while others charge a percentage of sales. Either way, the payments will accumulate and there could be a significant increase in your budget allocation for payment gateways. Do your own research to identify which payment gateways work best for your target audience.
Some merchants offer plans based on volume of payment. When you have multiple gateways, the payment volume is spread out across multiple merchants, so it may be more difficult to gather volume of payment.
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