6 MUST-HAVE PAYMENT GATEWAY FEATURES FOR E-COMMERCE BUSINESSES

As consumer preference for e-commerce increases, thanks to the convenience offered by online shopping, the global digital payment industry is experiencing increased growth. This presents many opportunities for e-commerce businesses, but only if their payment processes and systems are optimized to support changing consumer shopping habits.

In this blog, we take a look at the e-commerce landscape and the shopping behaviors that shape it, before finding out why an effective payment gateway is needed and what are the top payment gateway features that e-commerce businesses need.

The changing landscape of e-commerce

During the pandemic, e-commerce sales have increased by more than 27% and although normal shopping behavior may resume now that lockdown restrictions have eased, online shopping is here to stay, with global sales e-commerce businesses that are expected to reach $6 trillion by 2024.

While this means increased opportunities for e-commerce businesses, it also points to changing consumer expectations that businesses need to consider. For example, 31% of shoppers said a good returns policy is the most important attribute when buying online, and 23% said an easy-to-use shopping interface was essential to their online shopping.

Change in payment gateway functionality

As the ways we acquire goods and services evolve, so do the ways we actually buy those goods and services. In the e-commerce landscape, the capabilities of online payment gateways are adapting not only to accommodate familiar payment preferences, like credit and debit card payments, but also to new, more innovative payment preferences like cryptocurrency.

According to Capgemini, alternative payment methods are expected to account for more than 25% of global non-cash transactions by 2025, and APMs themselves are evolving to meet consumer expectations for instant payment settlement, security heavy-duty and more practical CX marked by hyper-customization. This means that e-commerce business payment gateways will need to be able to support next-generation payment methods that are driven by digitally-enthusiastic consumers and their disruptive payment preferences.

6 Must-Have Payment Gateway Features

For optimal payment support, e-commerce businesses need to be confident in their payment processing capabilities. This means having a payment gateway with the features required to support efficient payment processing, regardless of your customers’ payment preferences. Here are six must-have payment gateway features every e-commerce business should look for when adopting a payment gateway solution.

1. Full dashboard view

Important not only for tracking payments in your business, but a comprehensive data dashboard is also essential for gaining key data insights that can support your business intelligence and decision making. Your payment service provider should offer you a payment gateway with a dashboard view that can:

  • Be modular or customizable, according to your preferences and needs
  • Provide detailed information about your payment activity, along with analytics features to identify insights from that payment data
  • Provide intelligent traffic management capabilities
  • Helping you improve payment visibility and control

2. Regular payment

Of critical importance to subscription businesses in particular, recurring billing is an important payment gateway feature to combat revenue leakage and minimize tedious manual chargeback management. Recurring billing allows businesses to:

  • Automatically renew payment contracts and adjust prices
  • Easily meet compliance requirements
  • Monitor and report transactions through a single user interface

3. Pay by link

As another way to support changing consumer payment behaviors, pay-by-link allows businesses to create secure payment links that allow customers to easily make payments from their email, chat or from another digital channel.

With the pay-per-link functionality, e-commerce businesses can automatically generate links, securely and compliantly, and track payment activity made through those links from their payment gateway dashboard. . This provides a convenient payment method for customers and a flexible, easy-to-monitor payment option for businesses.

4. Virtual terminal

For mail orders, phone orders (MOTO), and cardless payment requirements, a virtual terminal is a must-have payment gateway feature that allows businesses to make real-time payments while interacting with their customers. from a distance. With Virtual Terminal payment capabilities, businesses can:

  • Receive payments worldwide
  • Supports major card brands, even if the card itself is not available for payment
  • Process payments in full compliance
  • Monitor and report transactions as easily and efficiently as normal card payments
  • Gain valuable business insights into their customers and preferences
  • Be more flexible in how payments are received

5. Chargeback

Having chargeback capabilities in place is important to avoid revenue leakage, reputational damage, and card scheme penalties due to failed payments. Effective chargeback can be predefined and customized to meet each business’s needs and gives businesses greater control over their payment processes. With chargeback functionality in place, e-commerce businesses can:

  • Simplify the customer checkout experience by automatically resetting failed transactions
  • Be flexible in how customer card details are stored and processed (e.g. through the use of tokenization)
  • Optimize conversions and payment acceptance rates
  • Ensure PCI-DSS Compliance

6. Pre-authorization capture

In certain industries such as tourism, it is important to be able to pre-authorize payments to ensure that payments are made successfully. With the pre-authorization payment gateway functionality, businesses can reserve funds for a future transaction, and when the transaction is finalized, the reserved funds can be “captured” and converted into a payment fee. The benefits of prior authorization include:

  • Guaranteed payment even if a customer fails to honor their payment agreement
  • Avoid chargebacks and refund fees
  • Improved customer satisfaction, because if the transaction is canceled before the purchase, the funds are not lost and the reserve is simply canceled

For industries considered high-risk, such as hospitality, the ability to hold funds via pre-authorization and retrieve the funds once a transaction is complete helps ensure that businesses do not incur losses or unnecessary damages due to errors on the part of the customer, such as friendly fraud. This is especially true for hotel reservations, where guests cancel reservations without giving the hotel sufficient notice, resulting in losses for the hotel.

Summary

While this is an exciting time full of opportunity for e-commerce businesses across all industries, having the right payment systems and processes in place is critical to success, especially when it comes to payment. functionality of your payment gateway. As e-commerce and consumer habits evolve, e-commerce businesses need to ensure their payments are optimized for a seamless customer experience and unhindered business growth.


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Elaine R. Knight