Small Business 101: How to choose the right payment gateway

For a growing business, it’s crucial to streamline your customer payment process and improve your cash flow. To take digital payments, a payment gateway is a key part of the payment process. A good payment gateway will make it simple for your customers to pay you and you’ll instantly receive the money.

But how do you choose a payment gateway? Here we’ll explore the factors you need to consider.

What is a payment gateway?

Put simply, a payment gateway processes digital payments. It authenticates cardholder data and passes it amongst the parties within the transaction flow. A payment gateway does the following:

  • Validate the customer’s card details securely
  • Make sure there are enough funds to complete the required transaction
  • Approve the transaction and transfer the amount to your account

Crucially, the above is done via encrypted payment gateway servers, so that you don’t need to worry about the liability of holding sensitive customer data.

What are the different types of payment gateways?

There are three main types of payment gateways:

  • On-site payments – On-site payments are handled on your server where the checkout experience and payment processing all work through your system. This allows you to control your on-site shopping experience.
  • Checkout on-site, payment off-site – The front-end checkout occurs on your site, but the payment processing occurs through the payment gateway’s back end. This can simplify the payment process and relies on increased back-end security. The downside is that you can’t control the user’s entire payment experience. You also need to be confident in the security provided.
  • Redirects – This is often an option for alternative payment methods, like PayPal. The gateway will take the customer to a PayPal payment page to handle the complete transaction. Again, you get the security of PayPal, but you have little control over the user experience.

What are the limitations of payment gateways?

Many payment gateways have the following limitations:

  • Often they don’t accept all types of cards or payment methods
  • Some may not be able to handle international transactions
  • There can sometimes be security flaws

Factors to consider when choosing a payment gateway

When choosing the right payment gateway for your business, you should take the following into account:

The types of payment available
This all comes down to how your customers want to pay. Yes, credit and debit cards may be the most obvious, but you might need a special account for regional cards such as the Girocard in Germany or Carte Bancaire in France. Do your customers want to pay by PayPal or other alternative payment methods or do they use crypto?

A flexible payment gateway that accounts for a wide range of alternative payment methods enables your business to grow and scale in line with the needs of your customers.

Multiple currency support
If you currently do business internationally – or plan to in the future – you need to make sure that your payment gateway can handle payments in different currencies across multiple countries and territories. If your customers can’t pay in their currency, you’ll quickly lose them due to your poor customer experience at checkout.

When it comes to processing encrypted financial information, security is essential. When choosing a payment gateway, ensure it is level-1 PCI DSS compliant and also consider fraud detection and screening tools that can protect your business from fraudulent transactions.

Integration with other systems
When you choose our payment gateway, you not only benefit from our consolidated solution utilizing the ISO 20022 open standard but also ensure seamless integration with your current technology platforms. We understand that integration with other systems is crucial for optimizing your payment processes.

By choosing a payment gateway with the ISO 20022 standard, which is globally recognized for financial messaging, you enable end-to-end payments to be nexo-certifiable, where applicable. This not only ensures compliance with industry requirements but also facilitates interoperability and compatibility with diverse payment systems and networks.

On the other hand, if your payment gateway integrates with your invoicing or accounting software, as soon as a payment takes place the corresponding invoice will update automatically in your bookkeeping system.

When selecting the ideal payment gateway, a crucial factor to consider is its support for a sophisticated and configurable reporting system for all transactions.

A robust reporting system allows you to gain valuable insights into your payment activities, providing comprehensive visibility and control over your financial operations. With the ability to configure and customize reports according to your specific needs, you can extract meaningful data and analyze transaction trends, customer behaviour, and key performance indicators. You can make informed business decisions, identify areas for improvement, detect potential issues or anomalies, and optimize your payment processes.

Choosing the right technology provider
Of course, a payment gateway is essential for your business to be able to take payments. But it doesn’t necessarily make sense to take a siloed approach. When you’re investigating the right technology for your business and considering how to choose a payment gateway, you should choose a gateway that is customisable to your exact requirements. That can let you take international payments for example and enable your customers to use any payment method that they want.

Our Aevi payment platform includes an open, cloud-based payment gateway that works with any payment type, anywhere in the world. From cards to phones to crypto – and everything in between – whatever alternative payment system your customers use, our all-in-one payments platform allows you to manage these simply and effectively.

And we’re not just limited to a payment gateway. Our platform is customisable to your precise requirements. It connects the in-person world with digital channels, orchestrates checkout flows, and sets transaction data free.

Put simply, it’s a complete solution to manage every stage of your payment process on behalf of your customers and your business. Discover more about our payment platform.

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