Implement multiple gateways for a competitive advantage.
Maximize your gateway setup to improve business results.
Digital payments are on the rise, with nine in ten Americans now using some form of digital payments. Your organization must provide customers with their preferred payment method – because if you don’t, your competitors will. Organizations that make strategic investments in payment technology will be in the best position to stay nimble and better engage buyers.
Your payment gateway is an essential component to offering digital payments. However, there are so many payment gateway services on the market today that you may find it challenging to choose one. Even with the myriad options available, a single gateway may not provide all of the features or specific payment methods that your business requires. As a result, some organizations choose to leverage two or more gateways to effectively operate their business and serve their customers. Keep reading to make sure you’re leveraging payment gateways effectively, and not paying too much for them.
What are payment gateways and what do they do?
A payment gateway is an interface that provides a secure, encrypted connection between a merchant’s online website or hosted payments software, or point-of-sale (POS) terminal for in-person payments, and major credit card processing companies.
Payment gateways fulfill a number of functions, such as fraud screening and compliance tools, and securely storing and tokenizing sensitive cardholder data.
For online payments, a payment gateway is like a virtual Point of Sale terminal, tasked with the duty of authenticating a digital payment request by the customer. Instead of inserting a physical card into a physical terminal, the customer must enter credit card details including a security code and billing address as proof of authenticity into the payment gateway’s virtual terminal. If the credentials are correct, the gateway will forward the payment information to the payment processor.
From this point onwards, the transaction works just like in an offline, in-person card transaction – the payment processor securely transmits the transaction data to the two banks. Upon successful completion of the fund transfer, the processor shares the details with the customer via the gateway.
How does my payment gateway impact security and compliance?
Payment Gateways offer merchants configurable fraud screening tools, such as address verification (AVS) and newer velocity and IP-based tools. Using these tools, a merchant can hold certain transactions for review, or choose to have the transactions declined, even if the payment processor might have approved them, providing an additional level of protection against fraud.
Additionally, to better protect customers and avoid security threats, secure authentication is a major focus for payment gateways. Regulations like Secure Customer Authentication (SCA) and the European Payment Services Directive (PSD2) require payment service providers to implement more robust mechanisms like two-factor authentication. Choosing a payment gateway or gateways that allow your organization to tailor payment processes to meet your security needs is critical.
Is it time to add another payment gateway to your payment processes?
Multiple payment gateway accounts are a popular choice when organizations accept multiple currencies or when they need to keep finances separate across different business divisions.
For the enterprise, multiple gateways and processors may be required to ensure maximum coverage in terms of credit cards, payment methods, currencies, and foreign markets.
Additionally, many organizations are opting for multiple gateways to better balance compliance requirements with digital customer experience; for example, designing multiple processes for SCA compliance, with one gateway handling low-risk payments, and higher-risk payments sent to a gateway with SCA enabled.
How can you minimize your payment gateway costs?
There are a number of factors that contribute to the overall cost of working with your preferred payment gateway, including:
- Setup fees
- Flat monthly fees
- Per-transaction fees, which can include flat fees, a percentage of payment volume, or both
- Equipment and installation fees
Using multiple gateways and processors, while it may make business sense, can increase fees and other ancillary costs. In general, having an in-house gateway platform gives you more control, but requires extra maintenance. With a more affordable all-in-one platform, you get limited coverage and less control over data.
Historically, changing payment gateways has been a burdensome and expensive undertaking – so unlike some services which get revisited and renegotiated every year, most merchants tend not to change their payment gateway. However, these merchants may be missing out on savings.
However, technology solutions like Chargent Payment Methods are bringing increased portability and making it easier and more affordable to leverage multiple gateways. With Payment Methods, you can tokenize multiple gateways and easily move between payment gateways. This not only improves business continuity, but allows you to tailor payment processes to maximize security and cost savings.
Choosing the right payment gateway is key to maintaining security standards and delivering the digital payment offerings that your customers expect. Are you making the most of yours? We’re happy to help you evaluate your payment gateway service and identify opportunities to save money and streamline compliance. Connect with our sales team to get started.
Additional Helpful Resources
Whether you’re ready to implement new AR software today, or are not quite yet ready to make the investment, below are resources that can help you decide the next steps to take. When the time comes, you’ll enjoy increased revenue and improved operational efficiencies.
