How can e-commerce make payment simple?

In this article you will learn:

• What a payment gateway is and why it's important for your small business

• What to consider when looking for a payment gateway provider

• How to evaluate payment gateway solutions

• How to find the solution that will best meet your customers' e-commerce needs

The landscape of businesses has permanently changed with an accelerated growth in the e-commerce space. There has been a global shift to enhance digital presence which has placed less reliance on in-store traffic. This shift creates massive opportunities for small business growth as the cost of scaling the business can be reduced significantly. One e-commerce store can service the same number of customers that would shop in several different stores across the country.

Why is a payment gateway important for your business?

Payment is a critical part of the buying journey – you want your customers to be able to pay easily and safely while having the assurance that the payment is legitimate before dispatching orders. There are many payment methods out there, each with different customer adoption rates, fees and refund capabilities.

Some international platforms may have limited South African payment providers that may be used to collect payment. This impacts your small business as if limits the payment options you can offer to your customers and increases ‘cart abandonment’ when they shop on your e-commerce platform.

What should you consider when looking for a payment gateway provider?

Businesses that have been successful on their e-commerce platforms have created an online purchasing journey that matches the physical in-store purchasing experience.

They do this by giving their customers the same terms as they would have in-store – such as:

• Accepted payment methods

• Refund policies

• Returns or exchanges

They also leverage social media platforms and give their customers the opportunity to engage with them by asking questions about the product. Some factors to consider in evaluating an e-commerce platform are:

• Level of complexity in configuring the platform

• Inventory management

• Logistics

• Fees

• Scalability

• Payment capabilities

How can a small business go about evaluating payment gateway solutions?

There is normally a percentage cost per transaction which the payment service provider charges for processing transactions. There may be additional costs such as a flat fee per transaction in addition to the percentage cost, a monthly subscription cost, a fee for integration or setup and possibly a fee for settlement of the funds into your business bank account. All of these fees add up and can impact your cash flow. Another factor is the frequency of settlement into your bank account which also impacts cash flow.

How do you measure what is most suitable for your customers’ e-commerce needs?

It’s important to consider your customer as well as your business model, when designing your e-commerce platform. For instance, depending on your products and services, you may want to accept subscription payments from repeat customers without requiring them to recapture card credentials and approve the transaction each time. For businesses that take telephonic orders or distribute monthly invoices, having the ability to generate a payment link can eliminate time-consuming manual payment reconciliations.

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