Picking a Payment Gateway

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Here at WP EasyCart we deal with payment gateway companies on a daily basis and understand all the pros and cons to each. We consider payment collection as a 3 step decision:

  1. Sales Volume – Will you be selling enough to make the lower transaction fee pay?
  2. Location – Where is your business located? Not all payment gateways server all areas of the world.
  3. Pricing – Do you know all of the added costs for live payment gateways?

Sales Volume

The first thing to think about is sales volume and average transaction amounts. most live payment gateways charge you a setup fee, a monthly fee, a transaction fee, a batch fee, and an additional fee to process cards like discover and american express. We know that most business want to make payment as easy as possible and is why most look towards live payment processing, but if you are not making enough money in a month or per transaction then you will be losing money over a third party option like PayPal Standard! We have seen many companies pay the fees for months on end while they are getting started and all the while they could have just gone with a simple solution like PayPal.

Location

This is a really important factor to think about before starting your e-commerce site. Do your research and ask around before locking yourself into a payment company. The WP EasyCart is setup to have an option for all countries and more information can be found by clicking here.

Pricing

The other important factor, as all business owners know, is the bottom line. It seems simple, but many do not think about how a payment company can effect the business’s bottom line. Issues like setting up an SSL certificate and the yearly cost to keep this current on your site, charge backs and the risk your business takes selling from your own site, and unexplained transaction fees and the reason they are incurred. The following are a few things to keep in mind with pricing:

  • PayPal Standard is a flat rate with no fees and a very low chance of charge backs.
  • Live payment gateways require an SSL certificate which is about $100/year.
  • Additional fees typically apply for Discover and American Express when using a live payment gateway.
  • The more security you implement in your live payment gateway account, the lower the fees.
  • Using a gateway with 3D secure implemented will lower your fees and prevent charge backs.

What is a Charge Back

Many people who have not dealt with a credit card company do not realize that charge backs exist. A charge back is when the merchant is required to return the amount of money made on a transaction that is found to be fraudulent and to protect the credit card owner. In addition to returning the total of the order, the company typically charges a flat rate on top to pay for their “costs”. Also, do not forget, as a business you also lose the product!! This is one of the worst things that can happen as an online store owner and is important to avoid. To do this, try the following tips:

  • Require the AVS/CVV2 value to match in your merchant account.
  • Require the zip/postal code to match from the customer’s billing account (this is also set in your merchant account).
  • If available, require 3D secure checkout on your site.
  • If an order seems out of place or fishy, contact the customer and have them verify their info. If something still doesn’t seem right, simply refund the order and contact the customer. It is always better to be safe than lose the sale and product later and be charged for it.