Payment Gateways

Popular shopping carts such as Comersus are compatible with a great variety of payment systems widely known as payment gateways. But how can you choose the gateway that's right for you?

Date: August-2004

First, you should draw a line between payment gateways which require a merchant account and those which don't.

Payment gateways requiring a merchant account usually offer attractive commission rates, for example 1.8% of each transaction, a fixed $0.20 from each transaction, and a series of monthly charges grouped under several headings, usually amounting to less than $100. This means that your company keeps a greater share of gross sales. On the other hand, payment gateways requiring a merchant account have several disadvantages: they seldom engage in fraud prevention and rather leave it in the hands of the seller to decide which transactions are safe to accept and which should be rejected. If the company suffers a high rate of fraud, the gateway provider may terminate the service. Moreover, signing up for a merchant account can take around one month, and these are usually only granted to incorporated companies with an existing financial background. Lastly, it can be hard to get authorization for transactions with certain credit cards such as American Express and Diners Club.

In the case of payment gateways not requiring a merchant account, the main advantages are: you will be ready to sell immediately, fraud prevention tools are provided free of charge, and there are usually no fixed charges (only a commission over transactions). Of course the disadvantage is a less attractive commission rate, usually between 5.5% and 12%, with a $0.80 fixed rate per transaction. It is also worth noting that the name on the customer's credit card statement will be the name of the payment company, not yours.

Another factor to bear in mind is that some payment gateways are not available for the sale of intangibles such as software and services, while others are.

From the point of view of technology, you should consider the type of integration and security measures offered by each gateway.

The ideal situation for quick implementation is Web Form integration with the payment gateway: integration simply consists of a web form to send payment information.

If you would rather have a more secure and uniform integration, you can choose a gateway with a more complex integration method. However, first check with your webmaster that you comply with all requirements (SSL certificate, permission to install components, permission to open ports in the firewall, etc.)

Lastly, we should mention the Call Back Response or Silent Response feature. What is this, and how can it help selling with my shopping cart?

Call Back Response is a silent and secure signal sent by the payment gateway to the shopping cart to notify the result of a transaction. This is extremely useful to update the order status from Pending to Paid and trigger other processes related to the approval of a payment, such as:

. Decreasing the stock of the products purchased
. Delivering digital goods
. Increasing sales figures
. Notifying affiliates and suppliers

In the case that your preferred payment system doesn't support Call Back Response, Comersus allows you to update order status and perform other related processes manually, but this extra task may be tedious and lead to mistakes if there is a high level of transactions.

Alternatives to online systems

Comersus supports payments through non-traditional means, for example off-line credit cards. This means that the customer's credit card information is stored to be processed later through the usual procedures (POS, phone payment). In some cases, this can be useful if you wish to start selling right away. It can also serve as a backup method if the main online payment system is temporarily unavailable.

Another payment option is PayPal. This company acts as an intermediary between users and transfers funds from one user to another by discounting the amount of the transaction from the payer's account. This system can be useful in certain cases, although the verification procedure is quite complicated.

In conclusion:

If your store is just starting out you will want to keep fixed costs low. You should choose a gateway which offers its own SSL certificate free of charge, which doesn't require installing components in your server, and which doesn't charge excessive penalties for chargebacks.

If your store is already established, with a clear projection of sales levels, you will want to choose a gateway which allows you to use your own merchant account, your own SSL certificate, and offers all the security measures and uniformity of advanced integration methods.

Of course you should also go with a shopping cart that lets you choose. Comersus supports over forty online payment gateways, off-line credit cards, and non-traditional systems such as PayPal and MoneyBookers.

If you experience trouble with the system you have chosen, simply choose again from the extensive list of compatible systems supported by Comersus.

Need additional help in choosing a payment system? Refer to the following comparison chart:

Item	Details
Name of the payment system
Fixed monthly fees
% discount over each transaction
Fixed discount over each transaction
Chargeback penalty
Number of credit cards accepted
E-checks accepted within the same system
Method of layout integration with your site
SSL provided free of charge
Call back response
Types of product allowed
Security measures