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What a startup and small business should look for when choosing a payment gateway provider
How to choose a payment gateway provider: expert advice.
According to Statista, the number of online shoppers in 2019 reached 1.92 billion, and this figure is projected to grow to 2.05 and 2.14 billion in 2020 and 2021. Due to the increased number of online purchases, online stores are increasingly faced with the need to simplify and automate the process of accepting online payments. For these purposes, Payment Gateways have been developed - a technical solution that allows online business owners to accept payments on the website using bank cards. Payment providers supply such solutions.
The editors of PaySpace Magazin e learned from the business developer of the international payment provider and direct acquirer of ECOMMPAY Vladimir Polyakov, what a start-up company and small business should pay attention to when choosing such a provider.
It should be borne in mind that with the development of business, previous decisions may become irrelevant. For example, there is a good company called Stripe, which is geared towards startups. If a business has reached a certain benchmark and wants to go further, such a provider will not be ready for this. Each provider is needed at different stages of the company's existence
In addition, large businesses should work with multiple providers to diversify their risks.
If you have a large business and at the same time one provider is bad. You need at least two to diversify risks and further withdraw funds
Each payment provider has a financial license for each country where they are represented. In Cyprus - CySEC, in the UK - FCA, in Germany - BaFin, etc.
Vladimir Polyakov
ECOMMPAY
Local is suitable, for example, for a hotel in Scotland, which mainly receives guests from the UK. For a business that offers products and services to residents of different countries, it is better to opt for an international payment solution provider.
When choosing a payment gateway provider, you should consider:
The choice of IPSP should be approached the way the business determines which country to go to. In such cases, the company conducts a large analysis by country, taking into account various factors (language, difficulties in opening a legal entity, crime index, GDP level, etc.). It's the same here. It is necessary to develop filters and factors that will allow us to evaluate potential providers and choose the most suitable one.
The 5 best providers of payment gateways on the international market, according to Vladimir Polyakov:
“If you are a startup or, for example, a retail company that also needs POS terminals, then Adyen is for you. Checkout.com might be a good option if you don't need POS terminals. Worldpay is a massive machine, and the bigger it gets, the harder it gets to drive. In addition to these players, we can also highlight Mollie - a relatively new payment solution in the Netherlands, the development of which can be monitored. Also CyberSource, but this is a slightly different category of providers. They have a direct connection with Visa, and they are engaged in complex unique solutions that are tied to payment cards. ECOMMPAY should be chosen by medium and large international businesses that want flexible payment solutions and an individual approach."
PAYSPACE MAGAZINE HELP
A payment provider or IPSP (Internet Payment Service Provider) is a financially licensed company that provides Internet payment services, representing the interests of merchants to the bank. In essence, such a provider is an aggregator, registering its own bank account, and then renting it out to online merchants. All payments that customers make online are processed through this account before being credited to the accounts of the business. The peculiarity of a payment provider is that, unlike a bank, it offers customers an individual approach with the ability to connect several payment methods. For example, dozens of payment methods can be connected with the international payment provider Ikajo: from Visa, Mastercard and American Express to UnionPay and iDEAL.
How to choose a payment gateway provider: expert advice.
According to Statista, the number of online shoppers in 2019 reached 1.92 billion, and this figure is projected to grow to 2.05 and 2.14 billion in 2020 and 2021. Due to the increased number of online purchases, online stores are increasingly faced with the need to simplify and automate the process of accepting online payments. For these purposes, Payment Gateways have been developed - a technical solution that allows online business owners to accept payments on the website using bank cards. Payment providers supply such solutions.
The editors of PaySpace Magazin e learned from the business developer of the international payment provider and direct acquirer of ECOMMPAY Vladimir Polyakov, what a start-up company and small business should pay attention to when choosing such a provider.
Choose a provider based on the stage of your business development
Determine what stage of development your company is in and which payment provider specializes in your particular type of business.It should be borne in mind that with the development of business, previous decisions may become irrelevant. For example, there is a good company called Stripe, which is geared towards startups. If a business has reached a certain benchmark and wants to go further, such a provider will not be ready for this. Each provider is needed at different stages of the company's existence
In addition, large businesses should work with multiple providers to diversify their risks.
If you have a large business and at the same time one provider is bad. You need at least two to diversify risks and further withdraw funds
Pay attention to payment provider licenses
Having a payment service provider license allows the company to provide merchant accounts for its customers. To do this, the company must register and obtain a license in the jurisdiction with the most suitable conditions for its business models, which include the requirements of the financial regulator and the specifics of taxation. Some licenses allow you to work in several markets at once. So, before Brexit, the British FCA allowed companies to go out on the terms of an almost domestic presence in any region of Europe. Under these conditions, business representatives will be able to work in the EU until the end of the transition period, which will end on December 31, 2020.Each payment provider has a financial license for each country where they are represented. In Cyprus - CySEC, in the UK - FCA, in Germany - BaFin, etc.
Vladimir Polyakov
ECOMMPAY
Choose a provider depending on the audience of your business
When choosing an IPSP, it is also worth deciding whether you need to partner with a local or international provider of payment solutions.Local is suitable, for example, for a hotel in Scotland, which mainly receives guests from the UK. For a business that offers products and services to residents of different countries, it is better to opt for an international payment solution provider.
Explore open sources
As Vladimir noted, there are open sources on the Internet where you can see the profiles of almost all payment providers in all regions of the world.When choosing a payment gateway provider, you should consider:
- Geography (local or international provider)
- The solution that is right for your needs
- Diversification of risks
- Reputation
- License
The choice of IPSP should be approached the way the business determines which country to go to. In such cases, the company conducts a large analysis by country, taking into account various factors (language, difficulties in opening a legal entity, crime index, GDP level, etc.). It's the same here. It is necessary to develop filters and factors that will allow us to evaluate potential providers and choose the most suitable one.
The 5 best providers of payment gateways on the international market, according to Vladimir Polyakov:
- Adyen
- Checkout.com
- Mollie
- CyberSource
- ECOMMPAY
“If you are a startup or, for example, a retail company that also needs POS terminals, then Adyen is for you. Checkout.com might be a good option if you don't need POS terminals. Worldpay is a massive machine, and the bigger it gets, the harder it gets to drive. In addition to these players, we can also highlight Mollie - a relatively new payment solution in the Netherlands, the development of which can be monitored. Also CyberSource, but this is a slightly different category of providers. They have a direct connection with Visa, and they are engaged in complex unique solutions that are tied to payment cards. ECOMMPAY should be chosen by medium and large international businesses that want flexible payment solutions and an individual approach."
PAYSPACE MAGAZINE HELP
A payment provider or IPSP (Internet Payment Service Provider) is a financially licensed company that provides Internet payment services, representing the interests of merchants to the bank. In essence, such a provider is an aggregator, registering its own bank account, and then renting it out to online merchants. All payments that customers make online are processed through this account before being credited to the accounts of the business. The peculiarity of a payment provider is that, unlike a bank, it offers customers an individual approach with the ability to connect several payment methods. For example, dozens of payment methods can be connected with the international payment provider Ikajo: from Visa, Mastercard and American Express to UnionPay and iDEAL.
