I can’t emphasise how important it is to choose a good payment gateway for your online store from day one. These days, it’s easier than ever before to sign up for a payment gateway, which also means you need to make sure you’re not signing up with the wrong one. There are a lot of payment gateways, locally and internationally, out there so I’ll be helping you understand how to choose a payment gateway in South Africa.
When looking for a payment gateway, especially in South Africa, there is a range of important items that you need to make sure that they do not compromise on.
Payment Gateway NBs
Most South African gateways are PCI (Payment Card Industry) compliant but it’s good to understand what that means. To become PCI compliant, a gateway has to invest a large amount of time and money into setting up infrastructure and security that protects everyone in the payment process. This includes them, you and most importantly the end-user.
When you’re looking for a payment gateway, you definitely need to look into their security features and make sure that they’re able to protect very sensitive data from getting into the wrong hands. To find out more about PCI compliance, click here.
It’s one thing having a reliable ecommerce platform that is able to handle a large amount of traffic but if your payment gateway can’t handle the amount of people that get sent to it, you’re going to bleed sales which could potentially hurt your bottom line.
Look at some of the online stores that use the payment gateway you’re interested in to see if they have a good reputation for handling transactions at scale.
Fraud is a very hot topic in South Africa especially with so many issues such as card skimming. The risk of this is heightened online as you don’t physically do a transaction at a location.
Most payment gateways have substantial fraud protection and use a series of algorithms to check if a transaction is potentially fraudulent. On top of that, a requirement for a service known as 3D Secure was set in 2015 meaning that banks would have to add another layer of verification to credit card transactions.
3D Secure has had some negative effects as it needs to be activated by the credit card holder before being able to make a transaction online. Although, it may seem like a potential loss in customers, the reduction in risk greatly outweighs that.
When it comes to actually making payment, every person has their preference with how they like to pay. Understanding how your audience would like to pay is a vital part of choosing a payment gateway – doing research into their payment behaviours will help you understand this.
To list just a few of the different payment methods available in South Africa:
- Credit and cheque cards
- Debit cards
- Mobile payments
- Credit facilities
- Debit orders
I’ve left off a few that could work in South Africa but that don’t see large volumes of transactions in the online store space.
When choosing a payment gateway, having one that could cover a range of methods makes integration a breeze and also means you give more options for customers to choose from.
It’s not easy setting up a payment gateway nevermind integrating it into your system. However, depending on the platform you choose, chances are that someone has already created an integration for you – most likely an extension or plugin. Selecting a gateway that can easily be integrated with your platform can save you both time and money.
If you decide to develop your own integration or use an extension, I would highly recommend that you test it thoroughly before putting your store into a live environment. You also need to make sure you test it for every possible outcome of a transaction such as completed, denied, failed, unknown or user cancelled.
This is probably the feature that will affect your bottom line the most. Pretty much every payment gateway in South Africa has a different fee arrangement depending on the services they offer and how aggressively they want your business.
Some payment gateways will take a percentage whilst some will take a percentage on top of a flat rate. There are also a number of payment gateways that charge a monthly account fee.
You really need to decide if what they offer is worth the fees they are charging especially if you’re just starting up.
This topic can be the thorn in the side of many businesses launching an online store. The benefit of becoming a merchant (this is required by certain payment gateways) is that the money will be passed directly from the customer into your account.
As great as this is, becoming a merchant is generally quite a tedious process and can often delay you in getting your online store going. It also means that you will incur an additional monthly charge from the bank which can be a problem for a startup’s cash flow.
If your transaction volume is high and having the money reflect into your account straight away is important to you, then you will have to find a payment gateway that lets you set up a merchant account with a bank (most of the time, it isn’t necessarily the bank that you bank with).
Like I said in the previous section, if you have a merchant account, the money will go straight into your account. If you don’t have a merchant account, you will most likely find that you need to either request payout, set a payout schedule or set a payout threshold (when your account reaches a certain amount of money).
This could sometimes see delays as the transfer is done via EFT but the benefit is that you’re probably saving from hefty monthly and transaction fees.
I really hope this helps you make an informed decision about how to look for and choose a payment gateway for your online store.