The rise of ecommerce and online shopping is continuing to change the landscape of the economy — the digital economy has taken center stage. In fact, ecommerce statistics show that ecommerce retails sales are projected to reach a staggering $6.5 trillion by 2023. Many companies are scrambling to adapt to the rising tide in ecommerce and the digital economic boom. A few ways they are looking to prioritize ecommerce include:
- Shipping – Customers who have become accustomed to speed in shopping are now expecting speed in shipping — expecting options for the fastest delivery times.
- Customer experience – Companies are learning they must prioritize user experience on digital shopping platforms. Customers are looking for better navigation, suggestions, and tips, and integrated payment gateways, to name a few.
- Mobile friendly – Perhaps the most important feature digital customers expect is a seamless mobile experience. The mobile device is where more than half of consumers say they first discovered a new product or company.
However, the demand for mobile optimization among online consumers also brings with it legitimate concerns. Pew Research states that among mobile users, nearly 30% avoid making mobile payments due to security concerns, preferring the use of debit or credit cards alone.
Even with the rise of ecommerce and online shopping, there are still barriers for some shoppers, such as the use of payment gateways or payment processors and questions of overall payment security. This issue can leave many businesses with abandoned carts as customer concerns arise.
What are Payment Gateways?
Payment gateways are an extremely important component of the online shopping experience. Simply put, payment gateways provide merchants with a means of processing credit card payments and purchases on ecommerce sites; it acts as a digital cash register during electronic transactions between the business and the customer.
Businesses of all shapes and sizes need a means of accepting and processing payments. Payment gateways allow this to be done securely, whether digitally or in person.
Payment Gateways vs. Payment Processors
However, it is important to understand that payment gateway and payment processors are not synonyms. A few entities are involved with every credit card transaction — the business, the customer, the issuing bank (issued the credit card), and the acquiring bank.
Payment processors merely analyze and transmit data from the transaction between involved financial parties (think of “swiping a card”). In contrast, a payment gateway is a tool that does this as well. However, it also authorizes the transfer of funds between the business and the customer—often digitally.
Types of Payment Gateways
Non-hosted, or on-site payment gateways, allows businesses to collect and process payment transactions on-site; no third-party processing. This is convenient for the customer, but this method is usually most popular among large corporations that can handle the extra maintenance of hosting their own payment gateway.
Self-hosted payment gateways do not redirect customers off of a merchant’s website. All payment transaction data is sent to a third-party payment gateway—it is processed off-site.
Redirect or hosted
A hosted payment gateway takes customers off a merchant’s page (redirects them) to a payment gateway page where the payment is made. Once the payment transaction is completed, customers are redirected back to the merchant’s page. Hosted payment gateways are great for small retailers that want the security that comes with big-name payment platforms — like PayPal. Of course, this means multiple steps for the customer.
Top Shopify Payment Gateways
Shopify is a popular website builder devoted to ecommerce and the digital economy. It offers businesses of all stripes the ability to create a scalable online storefront to sell their products or services. Shopify is primed for mobile optimizations, allowing merchants every opportunity to maximize SMS marketing.
Furthermore, Shopify helps merchants navigate the payment process by allowing them to integrate various payment providers. Shopify supports two types of payment providers: direct providers and external providers.
- Direct providers allow customers to complete payment transactions without leaving the merchant’s online store; self-hosted payment gateways with third-party providers.
- External providers will make customers complete their payment transactions off-site, with hosted or redirect payment gateways.
- Shopify also offers its own on-site payment gateway — Shopify Payments.
Now that we have a better understanding of the types of payment gateways let’s take a look at the top Shopify payment gateways for each type: On-site, Self-hosted, and redirect.
Shopify Payments – Top On-site Payment Gateway
Shopify Payments must be mentioned in the talk of top Shopify payment gateways. Merchants will enjoy the simplicity of Shopify’s own on-site payment gateway, as it eliminates the need to integrate and set up third-party payment providers. Shopify Payments are streamlined to automatically set up payment methods with most major providers once a Shopify store is created.
Easily integrates with an online store
Since Shopify Payments is an on-site payment gateway, the setup for online merchants is seamless. Merchants need only:
- Employer Identification Number (EIN)
- Banking information
- Order and shipping information
Available in most regions
Shopify Payments can be used in most countries, including Canada, Australia, United Kingdom, and the United States, to name a few. It also accepts most major payment methods: Visa, MasterCard, AmEx, Discover, Apple Pay, and Google Pay.
Shopify Payment security and costs
Shopify Payments offer fraud analysis on all plans. Cost and rates vary based on the Shopify plan but decrease upon upgraded subscriptions. Online credit card rates are as follows:
- 2.9% + 30¢ for Shopify Basic;
- 2.6% + 30¢ for Shopify;
- And 2.4% + 30¢ for Shopify Advanced.
Authorize.Net – Top Self-Hosted Payment Gateway
Authorize.Net has been around for a long time. It provides payment processing and management and is easily integrated as a self-hosted, third-party payment gateway on Shopify ecommerce business platforms.
Easy set up for merchants
Authorize.Net offers two options for merchants:
- All-in-one for new merchant account setup and payment gateway
- Payment Gateway-only option for those with existing merchant accounts
There are no setup fees, but both require a monthly gateway fee of $25 with varying transaction fees depending on the plan.
Supports digital payment methods
Apple Pay, PayPal, and Visa Checkout are available. In addition, eCheck processing is available with Authorize.Net.
Authorize.Net allows users to create customer profiles with customer management features, recurring payments or billing options, as well as the ability to add shipping locations. Advanced fraud detection filters help protect through monitoring of suspicious transactions and IP address activity.
PayPal – Top Redirect Payment Gateway
PayPal is perhaps the biggest name in the payment gateway world, familiar with most merchants and customers alike. PayPal is already set up as one of Shopify’s default payment providers. Users are automatically set up with a PayPal Express Checkout account upon Shopify setup.
Free to sign up
Merchants can sign up with PayPal for free, only needing an email address. To get paid, businesses need to link the necessary banking information. Credit card rates are comparative to other payment gateway providers; 2.90% + 30¢ for online transactions.
Built for growth
PayPal allows users to utilize customer purchasing data to help make better business decisions in the future —providing important shopper insights to merchants. With its worldwide reach, PayPal allows merchants the opportunity to engage new customers internationally.
The PayPal business resource center allows merchants to join community forums, browse numerous article resources, from growing businesses to case studies, and provide a resolution center to solve transaction disputes.
You have numerous payment gateways options to choose from when looking to get paid for the products or services you sell on Shopify. Some are tailored to benefit the merchant, and others seek to streamline and optimize the customer purchasing experience through checkout. The payment experience should not be a roadblock to the customer.
Unfortunately, one of the biggest reasons for cart abandonment is an experience that leaves the customer with unanswered questions, many of which come as a result of the payment process. Shopify is not immune to this issue. Fortunately, LiveRecover does provide an option for those merchants that are tired of seeing abandoned carts.
Integrating LiveRecover with your Shopify store allows you to recover some of those unrealized sales. LiveRecover uses actual humans to contact those would-be customers with highly personalized SMS messages to win them back for you. Of course, some payment gateways and ecommerce apps provide versions of abandoned cart support, but they rely on automation for generic, impersonal responses from bots.
So, as you work to find a payment gateway that works for your business, don’t forget to maximize your company’s bottom line with SMS tools that seek to recover those sales that did not make it to the finish line. Feel free to get in touch with LiveRecover today if you have more questions about abandoned cart recovery.