Small businesses need to stay current with the rise in online shopping. To stay competitive, they need a reliable payment gateway that makes it convenient to accept payments online and ensures that transactions are secure. With digital payments expected to grow by 10.73% each year from 2024 to 2028, a payment gateway is a significant feature for making transactions smooth for businesses and customers.
If you’re setting up or running an online business, understanding payment gateways will help you stay ahead and make things easier for you and your customers. This blog discusses why small businesses need to integrate a payment gateway for smooth business operations.
What is a Payment Gateway?
A payment gateway is software designed to facilitate online payments securely. It allows your business to accept payments through your website or online store. When a customer purchases anything, the payment gateway securely sends their payment information to your bank or payment processor. This technology ensures that the data is encrypted and protected throughout the transaction.
A recent survey showed that 62% of small businesses in India use their websites or online stores as their main way to sell products, with a big chunk of their revenue coming from online sales. With India’s e-commerce market expected to hit $111 billion by 2024, having a payment gateway is necessary for online sales success.
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Why Small Businesses Need a Payment Gateway
A payment gateway is an effective tool for small businesses that want to grow. It makes handling online payments easier and helps increase the conversion rate. Here’s how it can help:
- Reach More Customers
A payment gateway allows your business to accept online payments, which means you can sell products or services beyond your local area. This broader reach helps you tap into new markets and attract customers from different regions or countries.
- Make More Sales
With a payment gateway, your business can operate around the clock. This 24/7 availability enables customers to make purchases anytime, not just during business hours. The convenience of shopping and paying online at any time of day or night can lead to more sales and higher revenue, as customers are not limited by traditional business hours.
- Better Shopping Experience
A smooth and efficient payment process improves your customers’ shopping experience. When payments are quick and easy, customers are less likely to abandon their carts. Payment gateways offer features like UPI intent flow and convenient settlements to ensure a seamless checkout process.
- Build Trust
Using a payment gateway builds customer trust by ensuring their payment information is handled securely. Payment gateways provide high security, third-party validation (TPV), and industry-best commercials, which help reassure customers that their transactions are safe.
- Keep Payments Safe
Payment gateways are designed to protect your customers’ information with advanced security features. They offer high levels of encryption, late authorisation, and fraud prevention measures to keep your business and customers safe from potential threats.
- Simplify Money Management
Managing payments becomes much easier with a payment gateway. Features like instant tracking and reconciliation help you keep track of your finances efficiently. Automated reports and convenient settlements allow for better financial oversight and easier cash flow management.
How Payment Gateways Work
Here’s a simple breakdown of the way payment gateways operate:
- A customer decides to buy something and begins the checkout process on your website.
- They enter their payment information, like the credit card details.
- The payment gateway checks for any signs of fraud and encrypts the payment details to keep them secure.
- The encrypted information is sent to the bank to confirm that there is enough money in the customer’s account.
- The bank responds by indicating whether the payment has been approved or denied.
- The payment gateway informs the customer and your business about the payment status, whether successful or not.
Choosing the Right Payment Gateway
When selecting a payment gateway for your business, consider these key points:
- Integration: Check if the payment gateway fits well with your website. It should work effortlessly with your current setup to avoid extra headaches.
- Fees: Look at the costs involved. Ensure you understand transaction fees, setup charges, and other potential costs. Choosing a gateway with clear fees can save you money in the long run.
- Features: Ensure the gateway offers good security and is easy to use. It should protect your customers’ data and provide a simple, straightforward checkout process.
- Customer Support: Choose a gateway that offers reliable customer service to help tackle any issues quickly and efficiently.
Best Practices for Payment Gateway Security
While running your online store, the last thing you want is for your customers to worry about their payment details being at risk. To keep your transactions safe and build trust, follow these simple security practices:
- Use SSL Certificates: Make sure your website has SSL certificates. This helps encrypt data between your site and your customers, making transactions safer and giving them peace of mind.
- Update Software Regularly: Keep your payment gateway and related software up to date. These updates usually include security fixes that protect against new threats.
- Monitor for Suspicious Activity: Keep an eye out for unusual transactions. Setting up alerts can help you spot potential fraud early and take action before it becomes a bigger issue.
- Implement Strong Authentication: Use strong authentication methods, like multi-factor authentication or tokenisation. This adds additional security to keep sensitive information safe.
- Train Your Team: Educate your staff about best practices for handling payments and recognising potential security threats. The more they know, the better they can protect your business and customers.
Ready to Simplify Payments?
Using a payment gateway can really help your business by making online payments easier and reaching more customers. If you’re looking for a great solution, consider brands such as Plural. It offers many payment options and quick settlements, making payment management simple. With easy setup and integration with popular platforms like Shopify Plus and Woocommerce, Plural takes the hassle out of handling payments. Choosing a reliable gateway like Plural allows you to focus more on growing your business. For more details, check out Plural.