8 factors to consider while choosing a payment gateway

You’re smart enough to identify unfulfilled needs for your next startup idea. You’ve already decided on your target groups. The sales team is ready to spread your gospel. However, have you considered your users’ check-out experience?
Probably not, and word is out, like chum in the water and the payment gateway sales sharks are circling your inbox.
Alternatively, you are already an established retailer/merchant. You see an increase in conversion, and you have a good sales forecast for the coming year. But something is off. You can tell by the percentage of abandoned carts — and you’re not the only one. Chum. Water. Sharks.

Whichever scenario fits you best, you’re in luck. There’s a whole host of payment gateways out there who are eager to integrate their API with you.

But how do you choose the right one for your needs?

What is a payment gateway?

Let’s start here, shall we? Payment gateways are in-between services that process the financial information (bank, card, credit) that user’s put in during check-out, and oversees the authorization and success of payment. In short: they make sure no one gets screwed over when a product or service gets sold.
For you, it removes the hassle of setting up an encrypted payment solution and the constant nightmares surrounding industry standard data security.

Since gateways are solely in the payment business, they can instantly provide a range of payment choices (aggregating payments methods) for your customers. Moreover, they are expanding their geographical reach all the time, potentially opening a path for you to expand to new markets. Does that mean that you could shout ‘YES’ at that first sales character who makes it through your caller ID?

Not really.

Here are the eight criteria you might want to know when evaluating your payment gateway.

1. Safety

This one is a no brainer. If your users feel cheated as a result of your payment gateway, they won’t come near your product even though it is not your fault. Make sure your payment gateway is a tested-out and well-known solution.

2. Payment options

You probably have a diverse user base when it comes to which payment method they prefer. So, to increase your conversion, you’d do well to select a payment solution that supports card, bank, and credit payments. These are the most common alternatives and covers the majority of the users’ needs.

The more, the merrier, of course!

3. Location, location, location

Super important and commonly overlooked. Make sure that your payment gateway works in all areas where your business operates (and plan to operate). Because once you expand, you don’t want to be bothered about integrating with another gateway. As a side benefit payment gateways with better coverage can inspire you to reach places you haven’t thought of before. Besides, familiarity is essential when it comes to good user experience.

4. Your system and their API

During check-out, payment gateways appear to your users in one of two ways; either as a pop-up within your site or directed to the gateways site to finalize their purchase. Your UX team should decide which option makes the most sense for your customers. Still, as a general rule, the decision should take both system’s compatibility to the gateways API and painless user-flow for your customers into consideration.

5. A continuously improving payment gateway

It is a good sign if your choice of a payment gateway has been steadily advancing. It is better to choose a small payment gateway with a history of enhancing payment experience, rather than a big one with no history of improvement. A history of innovation is an indication that they’ll ultimately catch-up with any payment technology that emerges.

6. Close-loop solution

If you happen to be in a business where users not only deposit money but also withdraw (investments, igaming), then you need what is called a closed-loop payment solution. Remember, it is easier for a user to deposit and withdraw money from the same payment service. It’s just good user experience. If customers use the same gateway to deposit and withdraw, they don’t have to verify their identity twice.

7. Conversion rate

This one is as much selective criterion as evaluative. Data shows that customers drop-out rate or cart abandonment can reach as much as 68%, and some of that blame might go to the check-out experience. If possible, try to have at least two gateways to see if one has a better conversion rate than the other.

8. Conscious consumer value-based payment solution

This is the factor that you often don’t hear about, but also happen to be my favourite yardstick. It’s all about your users’ financial well-being. A check-out payment gateway has the potential to be an excellent tool that enables your customers to be conscious consumers. Unfortunately, few payment gateways are up to this challenge, though the number is expected to increase.

There are two main reasons for this presumed uptick. First, research shows that both Gen X:ers and Millennials are more inclined to buy products from companies with strong social values. Conscious consumerism is in vogue and a lifestyle that many of your customers want to associate themselves with. You can benefit from this by providing a payment platform that satisfies this demand. Moreover, as discussed in the next section, it’s a good business model. Financially healthy customers have a significantly higher customer lifetime value.

Our experience as a payment gateway

Here at Zimpler, we would like to think of ourselves as a payment gateway that actively strives to become better. We have been steadily improving for the last four years, and currently, Zimpler is a full-fledged payment gateway that affords the above factors.

In particular, we are proud of the work we’ve done on making sure that our end-users have the means to be conscious consumers. It is the main KPI on which we evaluate our product. Customers who sign-up to use our service can, for example, set-up a budget limit that helps them to think about their spending actively.

And we can tell you that this is also a great business model. When we compare the customer lifetime value for users with a budget limit with the ones without, we can see a longer customer lifetime value among customers with a budget limit. It also means a lesser customer acquisition expense and a happier customer.

Whether you would choose Zimpler or another payment gateway, we hope that you take your users financial well being into consideration.

Happy hunting!