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As consumer preference for eCommerce increases, thanks to the convenience that shopping online offers, the global digital payment industry is seeing increased growth. This presents eCommerce businesses with ample opportunity, but only if their payment processes and systems are optimised to support changing consumer purchasing habits.
In this blog, we take a look at the eCommerce landscape and the buying behaviours that are shaping it, before unpacking why an effective payment gateway is necessary, and what the top payment gateway functionality must-haves are for eCommerce businesses.
The changing eCommerce landscape
During the pandemic, eCommerce sales increased to over 27% and although normal shopping behaviour can resume now that lockdown restrictions have eased, online shopping is here to stay, with worldwide eCommerce sales expected to reach $6 trillion by 2024.
While this means increased opportunity for eCommerce businesses, this also indicates changing consumer expectations that businesses need to account for. For example, 31% of shoppers stated that a good return policy is the most important attribute when purchasing online, and 23% said an easy-to-use shopping interface is vital to their online purchasing.
Changing payment gateway functionality
As the ways in which we acquire goods and services evolve, so too do the ways in which we actually purchase these goods and services. In the eCommerce landscape, the capabilities of online payment gateways are adapting to not only meet familiar payment preferences, like credit and debit card payments but new, more innovative payment preferences like cryptocurrency.
According to Capgemini, alternative payment methods are set to account for more than 25% of global non-cash transactions by 2025, and APMs themselves are evolving to meet consumer expectations of instant payment settlement, foolproof security, and more convenient CX marked by hyper-personalisation. This means that eCommerce businesses’ payment gateways will need to be able to support next-gen payment methods that are driven by digitally enthusiastic consumers and their disruptive payment preferences.
6 payment gateway functionality must-haves
For optimal payment support, eCommerce businesses need to be confident in their payment processing capabilities. This means having a payment gateway with the required functionality to support effective payment processing regardless of your customers’ payment preferences. Here are the six payment gateway functionality must-haves every eCommerce business should look for when adopting a payment gateway solution.
1. Comprehensive dashboard view
Important not only for tracking payments in your business, but a comprehensive data dashboard is also vital for gaining key data insights that can support your business intelligence and decision making. Your payment service provider should offer you a payment gateway with a dashboard view that can:
2. Recurring billing
Of key importance to subscription businesses specifically, recurring billing is an important payment gateway functionality for combating revenue leakage and minimising time-consuming manual rebilling admin. Recurring billing allows businesses to:
3. Pay by link
As another means to support changing consumer payment behaviours, pay by link lets businesses create secure payment links that enable customers to complete payments easily from their email, via chat, or from another digital channel.
With pay by link payment gateway functionality, eCommerce businesses can automatically generate links, safely and compliantly, and track the payment activity conducted via these links from their payment gateway dashboard. This makes for a convenient payment method for customers, and a flexible, easy-to-monitor payment option for businesses to offer.
4. Virtual terminal
For Mail Order, Telephone Order (MOTO) and card-not-present payment requirements, a virtual terminal is a must-have payment gateway functionality that allows businesses to conduct payments in real-time while engaging with their customers remotely. With virtual terminal payment capabilities, businesses can:
5. Rebilling
Having rebilling capabilities in place is important for avoiding revenue leakage, reputational damage, and card scheme penalties due to failed payments. Effective rebilling can be pre-defined and customised to suit individual business needs and gives businesses greater control over their payment processes. With rebilling functionality in place, eCommerce businesses can:
6. Pre-authorisation capture
In some industries like tourism, being able to pre-authorise payments is important for ensuring payments are completed successfully. With pre-authorisation payment gateway functionality, businesses can reserve funds for a future transaction, and when the transaction is finalised, the reserved funds can be “captured” and converted into a payment charge. The benefits of pre-authorisation include:
For industries considered high-risk, such as hospitality, being able to hold funds via pre-authorisation, and capture the funds once a transaction is complete, helps ensure businesses don’t suffer unnecessary losses or damages due to missteps on the part of the customer, such as friendly fraud. This is particularly true for hotel bookings, where guests cancel reservations without giving the hotel adequate notice, leading to losses on the hotel’s part.
Summary
While this is an exciting time ripe with opportunities for eCommerce businesses across industries, having the right payment systems and processes in place is vital to success, especially when it comes to your payment gateway functionality. As eCommerce and consumer habits evolve, eCommerce businesses need to ensure their payments are optimised for a seamless customer experience and unhindered business growth.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Kathiravan Rajendran Associate Director of Marketing Operations at Macro Global
25 November
Vitaliy Shtyrkin Chief Product Officer at B2BINPAY
22 November
Kunal Jhunjhunwala Founder at airpay payment services
Shiv Nanda Content Strategist at https://www.financialexpress.com/
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