For a long period of time, cash has dominated the transaction activities. Payments were always preferable in cash and for some transactions, it’s only either by cash or no transaction at all.
However, as history reveals, everything gradually shifts and evolves into something new or better. For small retailers, especially those focusing on online business, getting their customers a quick and efficient payment process is the evolution they need. With the raises of online payment technology, they have a number of choices at their disposal.
What are the advantages?
It’s the dream for every entrepreneur to expand their business whether domestically or globally. Expanding means creating more business potentials by exploiting more markets, attracting new customers and welcoming more co-operations. If a company choose to expand globally, hence, establishing a relationship with payment gateways is a step forward.
By including multi-currency capability into the company, it tends to grow internationally and connect to a lot more customers. Most payment gateway companies offer multi-currency acceptance service. This is good for e-commerce entrepreneur as they can avoid extra fees charged by currency changer on their credit card statement.
Happy customers could form a good economy since they are the backbone of the commerce world. Thus, keeping them happy will maintain the good economy of the company. This is where payment gateway comes handy. Emma Law, a marketing assistant said “We have introduced these gradually over the past few years as our customers have become more security sensitive and also have more demands placed on their time. If we can optimise the time they do spend on our site, by offering a choice of payment methods they already use and by encouraging trust in our brand, we aim to capitalise on sales.”
Aside from keeping up with the needs of customers, payment gateway also helps improving your cash flows as they are quicker to transfer fund than the traditional card purchases.
Security has always been the main priority and concern for the gateway payment companies and customers. Due to this, many security features with multiple advantages are developed and introduced. One of it being that any unauthorised transaction will not go through and will be either cancel or blocked. The safety mechanism and security system of most payment gateway company are top notch.
They make sure that customer would not have any worries when using their services. Another feature or advantages in using payment gateway is customer’s details and data are secured. Data are valued more than money and if it falls to the wrong hand, it could mean a disaster. Thus, a payment gateway company makes sure that customer’s data are always their highest priority.
What are the disadvantages?
Can you imagine in the old days when you ordered a product, the merchant itself will deliver the product and you can inspect it or check the quality of it right on the spot before paying the merchant? In this 21st century, you have to pay first in order for you to get the product only to know when the product arrived, you have been deceived or tricked. The product you bought is not the same colour, size or even worst not the product you ordered.
Now you have a merchandise that you can’t either use or is some cases return back to the merchant. If you can return it, more time are now need to return it and wait for the right product.
The dependency on internet connectivity
Payment gateway highly depends on internet, without it, it’s either cash-on-delivery (COD) method, cheque or even postage payment. While in this 21st century, internet is a necessity and often considered as basic thing. However, in India, only 21% of Indians have or use internet. A research done compares the accessibilities of internet and ownership of smartphones between China and India. While China is leading the internet usage with 65%.
As one of the highest populated country, internet is considered a privilege in India. Most of the transactions there prefer to be done by cash-on-delivery (COD). Even so, Amazon still recorded a $437.7 million (US Dollars) of e-commerce sales according to Statista.
Risk of technical glitch
Any technical glitch can take considerable amount of troubleshooting time and in e-commerce, time is money. A payment gateway is basically a software that enable payment to be made more conveniently. Like any other computer softwares, it has a chance to go awry. Even the highest quality of software can experience failure. The differences between one payment gateway software to another is how the IT engineer going to handle the system failure. Nonetheless when it happens, the customer, e-commerce merchant and not to mention, the payment gateway company, all of them will get affected heavily. Not only it’s a costly risk of losing transactions, e-commerce merchant could lose their customers and so does a payment gateway.