Over the past few years, the way of running businesses has transformed completely due to technological advancements. The increased smartphone and internet penetration is pushing more and more businesses to go online, regardless of their type, size, and industry.
A person holding a credit card.
Online payment processing is one of the most crucial aspects of an eCommerce business. In fact, it won’t be wrong to say that the success of an online store depends highly on the payment processing environment it offers its customers. This is where payment gateways come into play. They have become an integral part of eCommerce businesses.
From providing smooth and quick transactions to offering security and enhanced customer experience, payment gateways provide a full range of benefits. Keep reading below, how an eCommerce business can benefit by using a payment gateway.
A payment gateway is a software or system that allows eCommerce merchants to collect payments from their customers in a convenient and secure manner. It basically acts as an intermediary link that connects various financial institutions to your eCommerce site. It has the responsibility of verifying and passing financial information to the bank or any other provider, resulting in quick and easy transactions.
Payment gateway boosts clarity, enhances security, and balances the cash flow of an eCommerce business.
Almost all the eCommerce store owners today are using the capabilities of a reliable payment gateway, regardless of the size and area of their business.
A better checkout experience results in Happy customers.
Following are the reasons behind the increasing popularity of payment gateways in the eCommerce industry.
1. Helps In Increasing Conversion Rate
An inefficient payment processing environment is one of the biggest reasons behind poor sales and conversion rates.
In such a scenario, no matter how high volumes of traffic you gain, declined payments can result in poor conversions.
Using a payment gateway, you can provide a better payment processing environment to your customers and encourage them to revisit your stores. Here, by a better transaction environment we mean a payment environment with multiple payment methods, including the following :
- Secured checkouts,
- Instant payments
- One-click transactions
- Mobile-app checkout optimization
- Dynamic routing
- And More…!
The right payment gateway provides much-needed satisfaction and peace of mind to your customers. As a result, your conversion rates increase and you generate more sales and profits.
2. Enhances Security
No doubt, online businesses are more lucrative than traditional brick-and-mortar businesses. While they are cost-effective and offer better returns and help you target customers across the globe, security is one of the biggest challenges faced by eCommerce site owners. Statistically, nearly 17% of shopping cart abandonment happens when customers are reluctant to provide their card details due to safety concerns.
Cybercriminals, fraudsters, and attackers have found their way to the internet. Online sites with a good customer base are always on the hit-list of these scammers as they get financial information for their illegal benefits.
A payment gateway secures your transaction environment and safeguards it against security breaches. This is another reason why most e-commerce entrepreneurs prefer using a payment gateway instead of any other payment arrangement.
The best gateway providers like Cashfree Payment Gateway come with security features such as PCI-DSS compliance, tokenization, data encryption, SSL certificates, GDPR compliance, and so on. These features allow you and your customers to make payments in a safe and protected manner.
3. Streamline Accounting Reconciliation
Accounting reconciliation is a crucial process for businesses, be it online or traditional. However, this process is highly time-consuming and requires too many resources. In absence of the right reconciliation system, accounting teams have to spend days manually reconciling the transactions made during the entire month. This can become even more challenging for the businesses receiving high volumes of payment.
A reliable payment gateway can help merchants overcome this challenge by automating the reconciliation process. It comes with many inbuilt features like advanced dashboards that offer detailed reports and insights allowing you to keep an eye on your cash flow and perform reconciliation automatically.
4. Gain Loyal Customers
A loyal customer base is a secret to the success of every business, be it an online store or physical store. Repeat purchases from returning customers are always a sign of a healthy business. However, customers only return to the same store when they find a desired shopping experience and convenience at the same time.
Payment comfort and security are some of the most crucial things for the customers. So, if you want to gain loyal customers, provide them with a simple and easy checkout experience with multiple payment options. This can be easily achieved by using a payment gateway as it allows your customers to pay using their favorite online payment methods such as credit/Debit cards, UPI, digital wallets, and so on.
5. Smooth Global Expansion
Perhaps, the biggest advantage of having an eCommerce business is that it allows you to open your business in the global markets. Most eCommerce merchants integrate their websites with well-functional payment gateways that accept payments in multiple currencies and via multiple payment methods. With the right payment gateway, you can :
- Add local payment methods of your global customers, for example: PayPal, local credit / debit cards, etc.
- Show your products in the local currencies preferred by your customers.
- Get your settlements in INR
6. Helps in Managing Chargebacks and Refunds
Chargebacks and refunds are among the biggest challenges faced by eCommerce merchants. Let’s face it, you can’t satisfy everyone regardless of how great quality you offer. There are always some customers who will dislike your products and ask for refunds, which is not entirely wrong. But when you fail to refund their amount within the decided timeframe, these customers can become furious and leave negative reviews, which will degrade your reputation and also result in customer drop-off.
Payment gateways allow you to offer instant refunds and manage chargebacks in a better way.
7. Minimize Shopping Cart Abandonment
Shopping cart abandonment is an e-commerce scenario in which a customer abandons the cart and leaves the website before making the purchase. It is one of the common challenges faced by eCommerce site owners.
Complicated checkout experience, lack of payment options, security issues, are some of the main reasons behind an abandoned shopping cart. Not only does it lower your conversion rate, but it also affects your overall performance.
Ecommerce entrepreneurs use payment gateways to provide their customers with a smooth and laid-back checkout experience, which helps them overcome this challenge.
These are some benefits of using a payment gateway for eCommerce stores. If you still haven’t thought about integrating the best online payment gateway to your eCommerce website, it is the right time to do so.