In 2019, there are more choices than ever for processing payments online. There’s really no excuse to offer your eCommerce customers a shady checkout experience. No longer does an online business need to be a giant corporation in order to deliver a slick checkout user experience (UX). Today’s payment gateways are full of bells and whistles and available to all businesses of different shapes and sizes.
If you’re a data nerd, you won’t be disappointed with today’s options for processing payments. Dashboards give online store owners insights into customer data in new and exciting ways. Do you have an idea for a product you’d like to sell or a side-hustle you know would take off? Then you should definitely keep reading for some eCommerce tips and information on processing payments.
Payment Gateway vs Payment Service Provider
When most people think of PayPal, they may not consider how many steps go into a successful online transaction. Many verifications need to take place before money changes hands, and that’s a good thing for everyone. Those who run an online store want to be certain all transactions are secure and encrypted, and that’s where payment gateways come in.
A payment gateway is a service that handles the authorization of payments for online merchants. This is typically done through a third-party company, who specializes in these types of transactions.
In this article, we’ll mostly discuss payment service providers (PSP). PSPs utilize payment gateways, but often add a layer of useful services for the merchant site owner. Services can include fraud protection, credit card processing, label printing, data analytics, invoicing and more.
Stripe, PayPal, and Authorize.net are but a few of the dozens of PSPs to chose from. You’ll really want to dig in and see what fits your company’s business model best. Forms of payment range from credit/debit cards to bank transfers and even Bitcoin.
It goes without saying that when it comes to your company’s reputation, it’s critical that you minimize your exposure to financial liability when processing payments. There’s probably nothing that will enrage a customer more quickly than the loss, or perceived loss, of money. If, for some reason, there are problems in a transaction (and lots of things can go wrong), you can turn to your trusty dashboard and root out the problem. Personally, I believe having that level of control and peace of mind is worth the service fee alone.
How are Payments Accepted Through a Payment Gateway?
This is a general overview, but when a customer is ready to place an order, their data is encrypted and sent. Data is usually sent directly to the PSP, altogether bypassing the merchant’s site. Once the customer’s order data is received, an authorization process is carried out with the relevant credit card company or bank. After the financial institution has authorized the purchase to the payment gateway provider, your online store portal will receive an update letting you know that the payment has been authorized.
The merchant (you in this case), will then complete any remaining requirements including preparation of goods for shipment or delivery of the product if it’s a digital item. After all of this has taken place, your PSP will confirm that the required steps have been verified. You can then mark the transaction for completion. Behind the scenes, final steps are taken to exchange funds, and the whole process is usually completed within three days. Rinse and repeat.
How Much Are Service Fees?
The rates are competitive, but service providers will often charge a percentage and a set transaction fee. At the time of publishing this, Stripe, for example, charges 2.9% plus $0.30 per successful transaction. PayPal’s fee is similar. International rates will vary and may increase considerably in cost.
Do You Have a WordPress site?
There’s a reason why WordPress sites account for 33% of the internet. WordPress has a loyal following, to say the least. It’s easy, powerful, and highly customizable. WordPress plugins are famous because they’re easy to install and they’re usually kept up-to-date by their developers. Updating your plugins is as easy as pressing a button, and can be scheduled for automatic updates. And, if you don’t want to handle updates yourself, you can always turn to our maintenance and support team at Maintainn. Want to get your online store off the ground fast with the payment service provider that’s perfect for you? We think WordPress is the way to go.
Is Your Product Digital or Physical?
Easy Digital Downloads (EDD) is a great way to manage your sales. Whether you’re a writer, musician or videographer, Easy Digital Downloads has you covered. Almost any digital file type or format can be sold through EDD, but generally speaking, if you can upload it to WordPress’ Media Library, you can sell it through this plugin. If WordPress restricts your file type, there are third-party hosting options available via Amazon S3 and Dropbox. Here’s a list of file types that WordPress supports. As you can see, the options are almost limitless.
If you’re offering physical products at your eCommerce, then you may want to consider WooCommerce. “Woo” is the go-to WordPress plugin for physical sales. It integrates with many major players in the payment service provider space and can be quickly configured to your needs. Highly customizable, it will be there for you as you scale up your company and rake in the big bucks.
Let’s Do This Together
Have big eCommerce plans but think you’re going to need some expert help? As you may know, at WebDevStudios, we’re huge fans of WordPress and eCommerce. Our clients love them, too. WebDevStudios provides end-to-end WordPress opportunities from strategy and planning to website design and development, as well as full data migration, extensive API integrations, scalability, performance, and long-term guidance and maintenance. Contact us and let’s discuss your eCommerce project and which payment processing solution is best for your business.