INSIGHTS - December 2018

CONNECT KND: Ep.2: Collect the Cash, Best Payment Gateways


For those of us that run an e-commerce store the most important thing of all obviously is to collect the cash you get paid. So let’s have a look at what are some of the most efficient ways to receive money through your site if you’re thinking about setting up a store or a donation system or a enrollment system or whatever system it is to collect the coin you need the most efficient way to do that.

We’ve been involved in lots of different projects over the years and it’s not necessarily one-size-fits-all there’s a whole bunch of options there.

Let’s start with one of the first and most popular ways to pay online and that’s with PayPal everyone knows that that’s fairly straightforward and easy to switch on in fact my wife best friend she will not pay for anything online unless there’s a ability to pay with PayPal. Do you know why? Because of convenience! She doesn’t have to open her purse to get a credit card out to put type the numbers in the credit card detail it’s just click click click. yeah I’m in my PayPal account I’m paying and I’m back on the site and happy days! I’ve got my product in the mail ready to go.

So it’s really critical that to think about that but not everyone wants to use PayPal and the reason why is because if a user is on the site they choose PayPal and you’re on your shopping cart page on your website now we are about to hit “pay with PayPal” and you get directed across to the PayPal web page so they actually leave your website do some stuff over here related to the payment and then end up back on like a Thank You page.

So there’s lots of steps to this process and those steps can actually go wrong we don’t want to go wrong we want a nice smooth process the whole user experience needs to flow PayPal doesn’t necessarily allow to flow although it’s very convenient for a lot of people some people also think there’s a security risk with PayPal albeit it’s been in the market now for so long it’s actually really quite solid and a lot of people use it so it’s a it’s a trusted brand and very usable.

So what are the next options so for those businesses that want to take it to the next level? Say you’re not entry and you’re doing a lot of transactions PayPal can actually be quite expensive the transaction costs are quite high so the next option is to partner get a merchant ID with a bank your bank remains in calm bank where whoever that might be Westpac to apply for a merchant ID and use a payment gateway. So what is a payment gateway?

The user is on your site they’re on your shopping cart page and they’re about to pay in that page there’s credit card entry fields here the user fills in the fields and instantaneously it goes to a hidden system that sits at the back that no one really ever sees it just looks like the page is loading or going somewhere else to process it’ll go again I hate processing your your payment it’s actually going to a gateway so the job of the Gateway is to check the validity of the credit card details to ensure that the payment so it’s fraud detection it does a whole bunch of really serious things they’re all PCI compliant. There’s a whole bunch of stuff that they are responsible for that you don’t really need to know all you need to know is that the money goes into passes through the gateway. The Gateway with checks and balances and the next day usually deposits that money in the bank account. So the money is not directly to your bank but it might as well be some banks offer a gateway service this may be and banks want to control this because there’s a transaction cost related to that as well so why is this why is this good because the user experience is smooth. They don’t leave the page there’s less risk for our transactions to go awry it’s efficient the costs are lower than your other third-party PayPal solutions but you have to go through the process to get a merchant ID merchant IDs you may need to hold some security for the bank and they might want to actually do that in a project I did recently for a not-for-profit they actually we’re doing an event there was going to be a couple hundred grand flow through the account just for a period of time a short period of time you know to pay registration fees and that sort of thing so the bank wanted the Secretary of the organization to put his house up as a guarantee as a risk control!

So we really didn’t want to go down that process so what do we do we used within a day we switched on a new service called Stripe so Stripe is like a mix of PayPal and a payment gateway it is a third-party tool sits in between so same same thing applies you’re on your cart page on your site there might be a little hey pay with processing via Stripe and it acts as a gateway or a gateway style of transaction in the background so the users don’t leave your site so the user experience is actually really smooth and next day or two days later the cash lands in your bank. It’s actually really efficient, stripe is awesome it was very very quick especially if you’re using standard tools like Magento or WooCommerce kind of tools there’s a plugin for stripe that are actually real easy to use and we were processing transactions within 15 minutes of turning it on absolutely brilliant and worth having a look at so that’s an overview of the three different styles of payment processes.

Some people prefer some for others and it’s a you know it’s a cost benefit of transaction fees volume how comfortable you feel the security and just usability and user flow on the site that’s payment gateways.