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What Is a Payment Gateway?

Businesses navigating the online marketplace have a responsibility to their customers: to make online payments as easy as possible. Thankfully, ever-evolving payment gateway technologies continue to make easy and frictionless online transactions a reality, much to the delight of merchants and customers alike.

Payment gateways such as Airwallex, Paypal and Stripe are online payment platforms that let your customers pay you with card, eWallets or even local bank transfer methods digitally. These gateways are the last thing your customers interact with before they complete their transaction. Hence, it is crucial to choose the right gateway for your eCommerce store. Choosing the right gateway can maximise customer confidence, reduce cart abandonment and boost your overall conversion rate. 

This article explores how to choose a payment gateway that makes sense for your online business. 

Choosing the Best Payment Gateway: Why It Matters

Before narrowing down your search for the right online payment platform, you should note some key considerations when choosing the best payment gateway. Such considerations include goals to:

  • increase eCommerce sales;
  • maximise your margins; and
  • prioritise compatibility and ease of setup.

Making the right decision can be valuable for your business and improve your customers’ buying experience. 

Increase eCommerce Sales With a Better Customer Experience and Less Friction

The better your eCommerce purchasing experience is, the lower your potential abandoned cart rate. This is because surprise costs, complicated checkout or missing payment methods contribute up to 28% of checkout abandonments.

Scalability is essential for your eCommerce store. This is because your store should aim to provide multi-currency pricing and a range of payment methods. You also want the option to price products like a local. 

Great payment gateways make it easy for your customers to see your product’s total cost in their local currency. Most importantly, great payment gateways minimise surprise fees. The total transaction cost is clearer for customers when currency conversion is not required. Likewise, you want your customers to have confidence in your checkout process, helping turn more shoppers into buyers. These multi-currency features are critical as you expand your customer base globally.

Additionally, your customers’ preferred payment method will also vary by country. For example, in Europe, Klarna is the leading ‘buy now pay later’ (BNPL) platform. In Australia, Afterpay is the leading BNPL provider. Therefore, ensure that your payment gateway gives your customers the flexibility to pay how they want, with who they want, wherever they are in the world.

Maximize Your Margins With Lower Fees

Part of choosing the best payment gateway is maximizing margins while minimizing the fees you pay. It is not uncommon for additional fees to impact your gross revenue, as is evidenced by popular payments platform PayPal. PayPal applies a 3-4% currency conversion fee that undermines eCommerce shops interested in international business. 

With global payments solutions like Airwallex, you can spend less time worrying about conversion fees and more time scaling your eCommerce store. Airwallex allows businesses to accept and settle like-for-like in USD, GBP, EUR, and other major currencies with no additional conversion fees. This has the additional benefit of eliminating unnecessary conversions when you are also paying your international suppliers in different currencies. 

Compatibility and Ease of Setup

Compatibility and ease of setup are also important considerations. You want reassurance that your chosen payment gateway is easy to install, maintain and alter, if required.

The most popular payment gateways to set up are ‘plug-and-play’ extensions on leading eCommerce platforms like Shopify, WooCommerce, and Magento. They have a large marketplace with various payment gateway options to explore and test, to determine if their features suit your evolving business needs.

Another consideration is a simple ‘pay by link’ solution. Simply generate an invoice and a link for your customer to pay, and they will be redirected to a website hosted by your payment gateway. This is a great option for B2B eCommerce businesses with custom product quotes and invoices.

Finally, for eCommerce businesses wanting to have complete control over their checkout experience, the standalone Application Programming Interface (API) integration method provides the most customisation. With this method, businesses can customise their checkout experience and integrate with other systems like their enterprise resource planning (ERP), pricing, and product catalogue. 

Note that with a standalone integration method, you may need developer support to set up and maintain your checkout experience.

Key Takeaways

When choosing a payment gateway that makes sense for your online business, bear in mind these tips:

  • choose a gateway that can scale with your business;
  • ensure your payments platform supports multi-currency features for selling in new countries; and
  • do not be shy to explore other, better payment gateway options as your needs change.

About Airwallex

This article is bJoe Romeo, Content Lead, Airwallex.

Airwallex empowers businesses to operate anywhere, anytime. Australia eCommerce brands like Orbitkey, The Sheet Society and Deliciou have accelerated their global expansion with a truly global business account. Seize the power of Airwallex to make fast, easy, and low-fee international payments with multiple currencies to start growing your eCommerce store today.

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