The Best Payment Gateway for Your E-commerce Business
4 min read
In recent years, the e-commerce industry has witnessed significant growth in India. With approximately 350 million online users actively engaging in transactions, e-commerce is only growing. It is expected to reach USD 60 billion by the year 2030.
Therefore, it is crucial for e-commerce businesses to select a payment gateway that can support various payment modes, address security challenges, and enhance customer experience.
There are various payment gateway options to choose from. Before deciding which one is best for your e-commerce business, it is essential to understand how they work and their key features and to research which option best suits your needs.
How Does a Payment Gateway Work?
The entire process of accepting payments via payment gateways only takes a few steps:
1. A customer decides to purchase a product
After customers decide which product they wish to buy, they proceed with the purchase. They are then asked to choose their preferred payment method and enter their payment details. Depending on the chosen method, this step may involve safety measures like a one-time password (OTP) or CVV.
2. The payment gateway begins encryption
After navigating to the payment page to finish the transaction, customers enter their details on the payment gateway‘s page. The gateway encrypts the details, conducts checks for fraud, and then transfers the transaction details to the acquiring bank. The acquiring bank ensures that the transaction is authentic. This could include the customer’s identity, bank details, and more.
After this, the acquiring bank forwards the information to the card provider (like Rupay or Mastercard) and the issuing bank to request authorisation.
3. Authorisation
After the payment gateway receives a response from the issuing bank, it notifies the acquiring bank whether the transaction has been declined or approved. If approved, the customer will receive a confirmation message with their order details. If it was declined, they will have to retry with a different payment.
4. Settlement
After the payment has been approved, the acquiring bank can begin the settlement process. The gateway receives the funds from the issuing bank and settles the payment with the seller, typically within a few days.
Key Features of Online Payments for E-Commerce Platforms
When looking for an online payment system for your e-commerce platform, there are some key considerations to look for:
1. Customer security
One of the most essential features on the list is security. Selecting a payment gateway with advanced safety measures is important. These measures include data encryption, 3D secure authentication, and fraud detection features, among many others. They ensure that customers’ sensitive financial and personal information is protected against theft and money laundering, safeguarding both the customers and your business.
2. Compliance with government regulations
To protect businesses and customers, the RBI has set up specific regulations. These ensure security, integrity, and transparency and benefit customers and businesses. They include KYC norms, anti-money laundering standards, monitoring transactions, and customer-identification procedures (CIP).
3. Payment methods
With the plethora of internet users who like to shop online, your e-commerce store should integrate a payment gateway that can accommodate various payment methods. These could include credit or debit cards, UPI, digital wallets, net banking, bank transfers, and more.
4. Quick transaction processing
The right payment gateway can minimise any delays in the process of transferring funds from the customer’s bank to the business’s bank, increasing the payment success rates. It is essential to look for gateways that provide end-to-end solutions and can be used across multiple devices. Faster payments also lead to better user experiences.
How Payment Gateways Help E-Commerce
All in all, e-commerce businesses must have the right payment gateway that aligns with their vision and requirements. The right one brings a plethora of benefits, including:
They allow customers and merchants to authorise payments quickly via the Internet.
They are intermediaries and securely facilitate transactions.
Payment gateways enhance customer experience by streamlining the payment process, making the e-commerce platform more attractive to users.
Services are typically provided by banks and other authorised third-party providers, making the process safe and trustworthy.
Wrapping Up
The right E-commerce payment gateway can take your business to new heights. However, while there are many options, not all of them will be the right match for your needs. It is essential to conduct detailed research into what your business is looking for and which gateways can provide it.
