Ecommerce payment gateways are used to handle payment transaction services through a secured gateway to make a payment for the customer orders.
According to Statista, the preferred payment method of global online shoppers are credit cards at 42%, followed closely by electronic payment at 39% and debit cards at 28%.
To allow the payment between service providers and ecommerce store, ecommerce payment gateways use integration services which help to connect the payment gateways in different types according to your particular need.
You can integrate the payment gateways either internally or externally to your ecommerce store. Based on the way how it is connected, the payment gateways are classified into different types.
Let's take a sneak-peek into each one of these integration methods to analyze which one works perfectly for your business and which are the popular payment gateway providers used by a large number of online shoppers.
Hosted gateway uses third-party services like Payment Services Provider (PSP) to complete the payment services.
Hosted ecommerce payment gateway will take the customers away from your website to complete the payment process and you don't have control over customer during the payment process.
· When the user goes for payment, they are redirected to the PSP page.
· Then the user provides his or her payment details like credit card or e-wallet or bank details.
· Once credit details are verified then payment is made securely through the service providers page.
· After successful payment completion, the user is again redirected to your ecommerce website.
Here payment information from the ecommerce website is collected using inline frame and hosted by the PSP, so when a customer fills the form, the information is collected by the PSP. This type of integration is easy to set up and customizable according to the customers’ needs.
In the self-hosted method, no third-party services are used to provide the payment service. Instead of third-party services, customer details like card details, other payment details are directly collected by the ecommerce store owner itself. Then that details are forwarded to the payment gateway URL.
This type of ecommerce payment gateway integration, allows the ecommerce store to debit the payment from the customer. After payment is made by the customers, notification is sent to both customers and ecommerce website owners.
The customer details need to be protected while transferring from the ecommerce website to the payment gateway URL. So, a special format or secret code is used to transfer the customer details.
Self-hosted service provides good customer experience since they only deal with the ecommerce website and also customers to not navigate from your website.
The major problem over here is that the website owner needs to take full responsibility for security and have a technical support team which sometimes incur huge costs.
Non-hosted gateway uses API or HTTP queries services. Ecommerce website handles the checkout process and controls the transaction during the payment process.
Customers payment details like credit/debit card details are directly entered into the checkout page of the website owner. Then they process the details using APIs/HTTP queries for making the payment.
Here all the details of the customers regarding the payment is stored in the ecommerce website which can be accessed during the payment directly by the APIs.
After payment is made notification is sent to the customers. This method is suitable for all types of ecommerce platform since it can be used with any devices like mobile phones or a tablet.
In this method, ecommerce website owners can access the customers’ payment page interface and they can design their own user interface for the payment transaction.
Enabling payment via local banks is a straightforward payment gateway method. The customers are directly forwarded to the bank website for the payment.
The customer makes payment using their payment details and their identity to the payment gateway website. After the payment is made, they are redirected to the ecommerce website.
Here notification is only sent after successful payment and if there is any cancellation or refunding it has to be done directly by the merchants’ website to the customer. But there will be a continuous update process during the payment.
This is well suited for small scale business since it uses only a simple procedure for making the payment. Also, this method can be easily managed by the ecommerce owner.
Sometimes it is difficult to find an integration ecommerce payment gateway which fulfils all your requirements.
You may not comfortable with the design or theme they provide, else it is costly to be affordable, or it may not support all the currency formats your customer wants to pay.
So, it is best to design your ecommerce payment gateway to meet all your unique needs. The major advantage of using a custom payment gateway is, you need not depend on third-parties to make your customers to pay.
It also allows you to have high security over transactions and any new features that your business needs. For example, Amazon has its own payment processing and wallet system called Amazon Pay.
Stripe is the best software platform for running an internet business that handles billions of transactions every year globally. According to Statista, Stripe is 2nd most popular in payment processing. It is easy to manage and integrate into your website.
Stripe provides powerful and flexible tools ecommerce payment gateway. It's an example of a hosted payment gateway. It provides all type of function which includes: custom user interface, multi-payment options, mobile wallet integration, fraud and dispute recognition along with revenue optimization.
In Stripe, they collect payment for your product from your customers and they will pay back you within a particular time. Usually, it takes around weakly initially but they provide payback immediately if you use Stripe regularly.
PayPal is a simple and seamless payment gateway provider that comes with a standard checkout process which is optimized across all the device. It offers 24-hour fraud monitoring and live support.
In the open digital payment's platform, PayPal has more than 277 million active account holders that are over 200 markets around the world.
PayPal Payments Pro has a feature of customizing the pay via telephone and user interface of the whole checkout experience to fit your brand.
Amazon Pay is the most used ecommerce payment gateway services with more than 310 million users. It offers a streamlined purchasing process, improved conversion rates, A-Z guarantee, and protection plan.
Amazon provides full security over each transaction with no additional charge being collected. Also, it is easy to set up if you are running an online store using an ecommerce platform, where you install it as an extension.
We have discussed the best ecommerce payment gateway integration methods along with some popular payment gateway providers. Now, choose the best ecommerce payment gateway that satisfies your business needs.
Ecommerce payment gateway is not only limited to the methods as mentioned above. Also, the gateway providers, as stated above is customizable to your needs. Purchase commerce offers a customizable service to set up any type of ecommerce payment gateway integration method and connect popular third-party gateway providers in its next-gen ecommerce platform.
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