Without a doubt, fintech companies are getting more involved with consumers using their services. From one-time payments to recurrent payments and bulk payments, the process implemented by these companies is responding to the changing spending habit of consumers at a rapid pace. Since 2019, over 1.5 million Australians have reportedly used the “Buy now, pay later” apps such as Paypal, Afterpay, and zipPay for their purchases. Although other forms of established online payment services like BPAY and Direct Debit hold the e-commerce market with 59.1% and 43.9% belonging to Visa Checkout, Mastercard, and Union Pay ecommerce payment gateway, these newer systems pose a major challenge to its older competitors.
In 2022, it was estimated that more than 9 million purchases would be accomplished by newer ecommerce gateways. Additionally, in Australia, 15.9 million Australians are aware of the existence of an ecommerce payment gateway. The majority of individuals that benefits from this form of payment are often endorsed by Generation Z and the Millenials, who play an active role in promoting digital payment solutions and replacing traditional payments like cash and credit cards.
Types of Ecommerce Payment Gateway
Hosted Payment Gateway
A hosted payment gateway is a secure payment gateway that directs the customer away from the checkout page. This separate site is where the customer fills out payment details before being redirected back to the business website to complete the purchase.
This payment gateway offers a high level of security and protection against fraud. It’s a popular choice for many businesses and easy to set up. However, because a hosted gateway is external, business owners won’t be able to control the buyer’s checkout process fully.
Self-hosted Ecommerce Payment Gateway
A self-hosted payment gateway may appeal to businesses that prioritize user experience. The primary difference between a hosted and self-hosted gateway is that in the latter, the customer’s payment information is collected directly on the merchant’s website, encrypted, and then sent to a third-party gateway for approval.
Additionally, a self-hosted ecommerce payment gateway can result in a faster checkout process because the transaction process is done exclusively on the merchant’s site and there is no need to redirect to a separate site for payment. Hence, the merchant can have total control over a user payment experience. However, the only disadvantage is that there may be no access to technical support as it would be with the hosted payment gateway.
API-hosted Ecommerce Payment Gateway
An API-hosted payment gateway is best for a merchant who seeking full control over their web design. Using an application programming interface (API), payment details and processing are managed directly on the merchant’s website. This type of gateway allows a highly customizable checkout experience and can be integrated with a variety of setups including mobile devices.
Importantly, when choosing this payment gateway, the merchant is responsible for security. That means the merchant has to pay more for SSL certification and guarantee that the payment process is PCI DSS compliant.
Local Bank Integration Ecommerce Payment Gateway
Local bank integration gateways redirect customers to the website’s ecommerce payment gateway, which is usually the bank’s website. Customer enters their payment and contact details on the site, and after making the payment, they are redirected back to the merchant’s website.
Ecommerce Payment Gateway - How to Choose the Right One?
Choosing an Ecommerce Payment Gateway
When selecting a payment gateway, there are many factors to consider - such as security.
According to a report from Stratica, most ecommerce businesses consider security their pivotal concern, and they want to have more security options in place online.
When choosing ecommerce solutions for your business, consider the following questions:
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What online payments do your customers use?
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Will the payment gateway integration with your company’s system?
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What is the fee from the payment gateway?
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How secure is the encryption?
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How flexible is the merchant account?
At PayChoice, our services support your business by setting up an ecommerce payment gateway for improved sales and cash flows. Enjoy low transaction fees, encrypted security, and professional customer support from our team. For more information about our model, contact us here!
