"Payment gateway" is not a phrase you're likely to hear in everyday conversation. A technical term for something we have all used (probably many, many times) payment gateways are a staple for ecommerce websites.
A payment gateway is the bit of technology that sits between your website and the payment networks. It's what connects the dots between your credit card and the credit card company that's authorizing the sale.
Payment gateways are essential for associations' ecommerce functions. They are used for online stores, event registration fees, and membership dues payments. With the right payment gateway, you'll ensure that your association's online transactions are processed smoothly and your members' information is secure.
If a payment gateway is not included in your current AMS or provided by your website or online community vendor, then you need to choose your own payment gateway.
Not sure what companies or organizations provide payment gateways?
To give you some context, consider PayPal, Bluepay, CardConnect, and Chase Paymentech. These are a few big names in the payment gateway industry that might be options for your associations. There are dozens of possibilities though, so which payment gateway is best for your association's website, AMS, and online community?
10 Questions for Choosing a Payment Gateway
One of the most difficult parts of deciding which gateway is best for your association is taking all the important factors into consideration. To make sure you consider the most crucial aspects, ask these 10 questions when shopping for a new payment gateway.
Question #1) Which payment gateways do your systems support?
This is an excellent question to start with because it could significantly narrow down your choices. Chances are your system (or systems) have a list of payment gateways that they have pre-built integrations with.
Pre-built integrations are often the easiest solutions, but if you would like to explore more options, talk to your system providers. Often, they'll be able to integrate with the payment gateway of your choice for a small fee.
Question #2 How do your management systems take payments?
The payment gateway isn't the only component involved in a transaction, your systems should be taken into account as well. That means your online community, website, and AMS also impact how payment details are taken and processed. From a technical point of view, there are two ways your systems likely take payment details from users.
- Payment form on your site, details posted to your server - This is the smoothest checkout experience for your members. Members will enter their payment details into a form on your website or in your online community, and the payment will be processed. Unfortunately, despite being a seamless user experience, this is the least secure method because there is no extra security to protect your members' information.
- iFrame and redirects (HOSTED) - An alternative to taking payment details directly through your site is to put the checkout form in a secure iFrame (an HTML page embedded into a page on your site) or redirect users to a hosted payment page. It's harder to get the payment form to match the rest of your website with these approaches, but they're the most secure way of performing transactions.
We recommend you use an iFrame or redirect when setting up your payment gateway integration, as that will keep both your members and your organization safe.
Consider whether your provider and payment gateways are PCI compliant as well. PCI, or Payment Card Industry has Data Security Standards (PCI DSS) that set the baseline for secure methods of handling credit and debit card payments. PCI compliant sites help eliminate insecure properties, and will provide a further level of security for your organization and its members.
Question #3 - Do you want a separate payment gateway and merchant account, or an all-in-one payment service provider?
Payment gateways do not stand alone. You also need to think about merchant accounts, or the special bank accounts that money goes into. These accounts are different from your regular business account, and allow you to accept credit card payments.
Some payment gateway providers, such as Sage or PayFlow Link, offer just a payment gateway and require you to have your own merchant account. Other payment providers such as PayPal and Chase Paymentech offer a combined payment gateway and merchant account. With these all-in-one payment service providers, you're set up to automatically use their merchant account. Depending on your organization's needs, you can choose the option that fits best.
Question #4) Do you want to offer PayPal alone?
You don't necessarily need to limit yourself to one payment gateway. Some website, community, and membership management systems allow you to offer multiple payment options to your members.
Additional, or secondary, providers can be a good backup in case of any problems with your primary payment gateway or merchant account. The most popular â€˜secondary' option to offer is PayPal. Many consumers have PayPal accounts and use it to avoid entering credit card details into yet another website, so consider offering PayPal as an alternative even if it's not your main payment gateway.
Question #5 - What are the fees?
Payment gateways and merchant accounts charge various fees that can include monthly fees, fixed fees per transaction, variable fees based on a percentage of transaction amounts, and extra fees for things like chargebacks, payments from international cards, and more.
You can use a comparison website to get an overview of fees and ask to see a full schedule of charges before signing with a provider.
Question #6 - How long is the contract?
Payment providers have been known to lock organizations into lengthy contracts of two years or more. This can be a problem if you find you're not happy with the provider for some reason after signing. Other providers are happy to have merchants using them on a monthly rolling contract. Make sure you understand which sort you're signing up for, and ensure that it fits your organization's needs.
Question #7 - Does the provider have a good reputation?
Payment processing is critical to your business, so you'll want to work with a provider who has a good reputation in the industry. Some payment providers have had problems with outages. Others have a reputation in some circles for blocking merchants' money without due cause. Read reviews and get recommendations from peers who you trust, as those will be some of the most reliable sources of information.
Be extra careful when researching payment providers that you haven't heard of before. If they're not well-known, they could be a new provider just getting on their feet, or there could be dodgy business practices that are keeping them from gaining a wider client base. To protect your organization, be sure to research them thoroughly before signing up.
Question #8 - Can you use the payment gateway for all your needs?
Do you need to do more than just take one-off payments for goods or services that you are providing through your online store? Perhaps you need to take recurring payments from your members? Are you accepting membership dues to allow more users to your site? Make sure your payment gateway provider can fulfill those needs.
For example, BluePay offer recurring payments, while some others do not. If information about recurring payments, one-time payments, or dues collection is not clear on a website or when you first contact a provider, ask them about it specifically. They should be able to provide you with all the information you need.
Question #9 - Does the payment gateway support the payment methods your target market uses?
There is a huge number of online payment methods in use around the world, from the well-known and well-established Visa and MasterCard to very niche payment methods used in just one or two countries. Each payment gateway supports only a few of these payment methods.
Do your research before you start looking at payment gateway providers, and make sure you understand which payment methods people in your target market like to use. Create a list of everything your members use and choose a payment gateway with support for those methods. Keep in mind that if your members use some niche payment forms, you may need to use more than one payment provider to support them.
Question #10 - Is your organization 'high-risk'?
Some businesses are considered by payment providers to be 'high-risk'. This is generally because of the sector they operate in or the longevity of the business itself. For example, financial organizations that handle high dollar amounts on a daily basis are typically considered more high-risk than an established flower shop chain.
If you think your business might be 'high-risk', you may find that many payment providers don't want to work with you. The payment gateway provider may take credit applications that are very detailed in nature to get a better understanding of your business and determine your risk level. Understand that this is normal, and you need to find a payment gateway that fits your organization's type, and can support you.
Choosing a Payment Gateway Takeaway
Selecting the right payment gateway for your organization may take some time. You need to research both your members, as well as your organization's needs, before you can even begin looking for the provider with the best fit.
The most important thing is not to rush this process. Choosing the right payment gateway provider is essential to keeping your organization and its members safe, so keep these questions in mind, and be sure to answer them all thoroughly before signing a contract.