Ultimate Guide On Choosing A Payment Gateway

Did you know that 50% of online shoppers would cancel their purchase if their preferred method of payment wasn’t available? Since the checkout can make or break your customer’s experience, it’s important to choose the best payment gateway possible for your store and your checkout UX.

To be sure you’re making the right choice, ask yourself these 10 questions:

Budget

1. How much do I want to spend on a payment gateway?

Cost is obviously a concern for every business. Before committing to any payment gateway provider make sure you are aware of their fee structure. The most important thing to think about is fully-loaded costs: setup costs + transaction costs + yearly costs.

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A payment gateway will typically cost around RM400 in setup costs, 3% per transaction and a RM499 fee. You will usually also be charged extra fees for any chargebacks. If you are a startup company or only take a relatively low volume of online payments, then you should try to avoid yearly fees and a high setup cost. You may want to look at a Starter Plan which is quick and cheap to set up. You might also want to consider only Internet Banking and cash payment which is typically cheaper than card payments.

Ease of Integration

2. Is the payment gateway supported on my ecommerce platform?

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Which ecommerce platform are you going to be using? Something SaaS-based like Shopify or BigCommerce, perhaps? Or a self-hosted platform like WooCommerce or Magento? Whichever platform you’ve chosen, there will be a range of off-the-shelf plugins or extensions to help you integrate with major payment gateways.

Where possible, choose a payment gateway that already has a plugin for your platform.

Security

3. How secure is the payment gateway?

Security is obviously a key concern when taking payments. You should make sure you only use a provider which is level 1 compliant with the Payment Card Industry Data Security Standard (PCI DSS) and that offers built in security capabilities (such as tokenization).

You should also consider the fraud protection and screening tools offered. Most payment gateways offer a number of tools to help you guard against fraud, such as filters to define who or where you receive payments from. These tools are particularly important if you will be accepting payments from people who you don't have an existing relationship with.

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4. Does the provider have a good reputation?

Payment processing is critical to your business, so you’ll want to work with a provider who has a good reputation in the industry. Some payment providers have had problems with outages. Others have a reputation in some circles for blocking merchants’ money without due cause. If you haven’t heard of a particular payment provider before, be a little extra careful before signing up with them.

Support

5. What level of support does the payment gateway offer?

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Customer experience is one of those under-valued areas which can really hurt your business down the line and as such is worth taking seriously from the off.

You should look for a payment gateway which offers support when you need it and in a way you can get it. Questions you might want to ask are:

  • Does the provider only offer email support or do they offer a range of support?
  • How responsive is the support?
  • Where is the customer support based? Do they work the same hours as you?
  • Do you need to pay extra for customer support?

A good place to start is contacting them to see how the initial experience goes as well as doing a research online into other customers’ experiences.

Features

6. Does the payment gateway support the payment methods my target market uses?

Payment gateways typically provide:

  • credit card channel (VISA, Mastercard, Amex),
  • internet banking (Maybank2u, CimbClick, HongLeong connect),
  • e-wallet (Alipay, Wechat Pay, MOL-Wallet) and
  • payment over the counter (MOLPay Cash).

If you’re collecting international payments you may want to check that the gateway supports local currencies and payment methods. Make sure you understand which payment methods people in your target market like to use and choose a payment gateway with support for those methods. If your website doesn’t accept your customer’s preferred payment method, you will lose sales.

7. How does this gateway enhance my checkout user experience (UX)?

Believe it or not, your payment gateway choice can actually improve your checkout process by eliminating some steps and speeding up the process. Furthermore, researchers from Bain & Co have confirmed that a poor user interface (colour, layout, design) will affect user experience which directly leads to payment abandonment. If your payment gateway offers tokenization, you can auto-populate some of your customer’s information through the gateway’s API, making it closer to a one-click checkout.

And since the checkout is what determines if the sale actually goes through or not, making it seamless and easy is key. Making the checkout easy and painless makes customers not only more likely to buy, but more likely to return. And, increasing your customer retention rates by just 5% can increases profits up to 95%!

8. How soon do I need to receive funds from the sales?

While you will usually know that a payment has been approved straight away it typically takes a few days for a payment to be settled. Payment timings vary significantly from provider to provider. In Malaysia, the settlement period normally will be 7 days.

9. Does the payment gateway offer automatic recurring payments?

If you want to take recurring payments you may want to look for a system that will store your clients’ credit card numbers and let you automatically charge them on a recurring basis. Many gateways now have this feature, but in almost all cases they also require your business to have an online merchant account.

Self Check

10. Am I in a ‘high-risk’ business?

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Some businesses are considered by payment providers to be ‘high-risk’. This is generally because of the sector they operate in. Some high-risk sectors include:

  • gambling
  • adult content
  • travel
  • tobacco
  • debt collection
  • e-books
  • electronic cigarettes
  • credit repair

If your business is in one of these sectors, you may find many payment providers don’t want to work with you. In such cases you’ll need to work with a provider that specialises in so-called ‘high-risk’ payment processing.


Once you have all the answers, do this.

Review the purchasing process in full detail
As you continue to narrow down your choices, try to be conscious of how each gateway will appear on your store, and what kind of experience it will offer your customers.

Think about the number of steps a shopper will have to take to get from their cart to a confirmation screen. If you’re asking too much of them, they might abandon their purchase.

Most payment gateway providers either have a demo on their website, or will be happy to show you a demo if you ask. This is a good way to get an idea of how the process will actually function on a store like yours, what screens customers will see, and what information will be requested.

Integrated gateways often offer you more flexibility than hosted ones, since you can opt for a one-page checkout, multi-page checkout, style form fields as you prefer, and so on — essentially eliminating any potential barriers to purchase, either now or in the future.

Don’t be afraid to start small

If you’re reading this guide, you’re likely setting up a brand new store or already have one. You probably don’t have a lot of time or a large budget to put toward the process of accepting payments. And that’s perfectly fine.
Don’t be afraid to start with a starter plan like MOLPay’s Startup Plan or ipay88’s Soho Plan — you can always upgrade later if you need to. MOLPay’s Startup Plan is one popular option among startups in Malaysia because it offers necessary payment methods and features with minimal price, and the easy integration allow store owners without much technical background to kickstart quickly.