Benefits of using an online payment gateway

September 26, 2019

Benefits of using an online payment gateway

The benefits of using an online payment gateway
By now you know HOW to start accepting card payments online, and WHAT an online payment gateway is. Let’s now tackle WHY payment gateways deliver an array of commercial advantages…

The fundamentals of a Payment Service Provider
When weighing up your options of online payment gateway provider, there are four core essentials that even an entry-level PSP will (or at least should) offer:
1. Advanced security measures to prevent fraud
2. Technical support
3. Acceptance of payments from a wide range of cards
4. Transaction reporting

With the basics established, the benefits of a PSP can be neatly categorised as advantages for shoppers, and separate advantages for the business owner. Let’s dive into these now…

The modern, massively improved alternative to cheques
Old-school payments are all but dead – with cheques falling from 40% of all worldwide transactions in 2005, to just 8% in 2014. With the rise of card payments in bricks and mortar stores, and an ever-expanding choice of Payment Service Providers, businesses have finally said goodbye to the daily treks to the bank, piles of cheques in hand.

The ability to meet surging consumer demands
Ecommerce growth is advancing at an unstoppable rate, accounting for $2.3 trillion in worldwide sales in 2017, with experts predicting this to grow to $4.5 trillion by 2021. For consumers, ecommerce offers convenient shopping on the go, from anywhere; it fits into the busiest of lives and sidesteps the need to pay a visit to a store in person.
But these consumers now expect more – 40% say that they feel more comfortable when purchasing from a retailer that offers multiple payment options – something that a PSP provides.

Support for opening a merchant account
To trade online businesses can use a third-party platform such as PayPal, but they might rapidly find that the associated fees are inhibitive. The next step up is to open a merchant account in order to use an online payment gateway with an acquiring bank. However, this application can be sluggish, with businesses having to wait for acceptance.
Select PSPs can and do assist with this process, applying on the merchant’s behalf and saving their customer time in the process (need more guidance on merchant accounts? Read our blog: How to start accepting card payments online).

Payment Service Providers are mobile-money ready
We recently blogged about mobile payments topping £975m in 2017 (representing a mammoth 328% increase year on year). The main and most commonly touted advantages behind this rise includes enhanced security, speed and convenience. Yet beyond this there’s another factor at play, particularly in certain parts of the world – and that’s the fact that mobile payments are a solution to the ‘unbanked’ – that is, those without access to a bank account. Worldwide, the ‘unbanked’ populous accounts for 2 billion globally, something that isn’t confined only to undeveloped countries. Even in the UK, vast swathes of consumers face running their lives without access to a bank account (6 million Brits were found to have been refused bank accounts in 2014 and 2015 alone).

Going global? Do so with ease
The more advanced of Payment Service Providers will provide support for multiple currencies, allowing you to trade with the world – easily and quickly accepting cross-border payments.
Cardstream pro tip – Invest plenty of time in the process of choosing a PSP. Each provider has differing lists as to the currencies they accept. Without research, you may end up with a cumbersome solution of using more than one payment provider or, minimally, will need to switch providers.

Support (but not all PSPs are created equal)
All PSPs offer some level of support – however this greatly differs from provider to provider. While some will offer technical support as a chargeable service, others include exceptional 24/7 service as standard. Again, our top tip is to spend time on thoroughly researching your options.

Last but by no means least – Payment Service Providers create consumer trust
Despite modern day lives being lived online, shoppers are increasingly wary about where they purchase from. Mass-data breaches by retail giants haven’t helped matters – leading to almost 2/3 of shoppers who don’t trust businesses with their payment information.
PSPs offer robust security known as PCI DSS (Payment Card Industry Security Standards Council) certification, driving down the chance of a data-breach and bolstering consumer confidence in the online shop they’re browsing.