What You Should Know about Magento Payment Gateways
How well do you understand Magento payment gateways? This article goes beyond the basics, to reveal tips that all Magento merchants can benefit from.
Just like POS terminals used in physical outlets, payment gateways let Magento web stores accept customers’ payments. The primary goal of gateways is to transmit requests to the payment processor and return approval or denial responses to customers. In addition, payment gateways make online payments highly secure as all data gets encrypted before passing through the link between your web store and the payment processor.
Critical for order processing per se, payment gateways can also enhance your web store’s credibility—provided you choose a well-known gateway with a reputation for reliability and data security.
How to Select a Magento Payment Gateway
Payment gateways play a very sensitive role in ecommerce business as they deal with customers’ financial data. A single flaw in the payment process can spell disaster for a merchant, especially if financial or personal data leaks out. If you want Magento payment processing to be as smooth as possible, keep the following considerations in mind when evaluating alternatives:
1. Do you sell products or services internationally? If so, your payment gateway has to serve your customers’ countries and support their currencies.
2. Are out-of-the-box Magento payment gateways enough for your business? For different reasons, shoppers prefer various payment gateways. So, the more popular options you provide, the more convenient payment processing will be for customers in general.
3. How appealing is the gateway’s user interface? Inconvenient payment gateways can make shoppers drop their purchases at the very last step.
4. Does it support mobile Magento payment processing? The number of mobile payment users is growing fast and is predicted to reach 1.1 billion users by 2021. So, only mobile-ready payment gateways are worth choosing now.
5. Does it comply with the PCI standards? Picking only those payment gateways that adhere to the industry requirements, you ensure that your customers’ sensitive data is securely processed and stored.
Take your time to answer the above questions, and you will find the right set of Magento payment gateways that suits your target markets and customers. To simplify the choice, let’s look at the most popular picks.
Top Magento Payment Gateways to Consider
PayPal and Braintree are two well-known and trusted payment gateways, which also happen to be the two that Magento recommends by default. PayPal has a huge share of the payment processing market (as illustrated in the chart below), handling more than $161 billion worth of ecommerce payments in the Q1’ 19, according to Statista.
Incidentally, PayPal also owns Braintree, but there are differences in the two gateways, so it is worth evaluating each of them, or you might choose to set them both up as Magento payment gateways.
Braintree and Authorize.Net are available in fewer countries and support fewer currencies than PayPal. Though these payment gateways offer more limited packs of features and services, they guarantee seamless and secure transactions, yet at a lower cost.
Along with Braintree, PayPal, and Authorize.Net, the following payment gateways can integrate well with Magento, and are all associated with high performance, robust security, and positive consumer sentiment—hence their high rates of adoption among ecommerce businesses:
- Amazon Payments
- Sage Pay
- Google Checkout
The out-of-the-box Magento supports transactions via PayPal, Braintree, and Authorize.Net. However, merchants using default features are limited in configuring relevant Magento payment methods.
To integrate additional payment gateways into your Magento store, you need to download appropriate extensions from the Magento Marketplace or turn to ecommerce developers. Though there are free extensions, those with advanced security features come with a price tag.
Even when running a high-quality extension, mind the necessary precautions to avoid Magento compatibility issues. No matter how well-coded an extension is, a fragile Magento environment can still fail to accept it without additional configurations.
The Pros and Cons of Having Multiple Magento Payment Gateways
If you decide—as many enterprises do—that a single payment gateway is not enough for your web store, you can enable multiple options. This decision makes sense for at least three reasons: 1. You can cover international markets. If your business expands into foreign countries, you can face the need to offer the payment gateways popular on your new target markets. You will also have to configure Magento payment methods to process transactions in relevant currencies and according to local regulations. 2. You ensure continuous payment availability. If one of the payment gateways is out of service, you won’t lose shoppers as they will be able to check out using an alternative payment method integrated into your Magento web store.
3. You increase customer satisfaction. Amid mounting concern about cybercrime and data security, shoppers are increasingly growing to understand payment gateways and finding their favorites. With multiple options available in your Magento web store, you reduce the risk of losing shoppers loyal to particular payment options. People do care enough to shop elsewhere if they don’t see the payment gateways they trust.
Given the above reasons and the flexibility of Magento, integrating multiple payment gateways seems reasonable. Still, this approach has its drawbacks, which encourage some merchants to stick to a single payment gateway.
In particular, you will face:
1. Fewer opportunities to cut transaction costs. Some payment platforms, such as Braintree, Stripe, or Amazon Pay, offer reduced transaction fees if a merchant exceeds a certain volume of monthly payments. Dividing the payment volume among multiple service providers makes it harder to qualify for such discounts. While this might not be an issue for larger enterprises, it may be something to consider if your ecommerce business is new or just moving into a growth phase.
2. More administrative work. To provide multiple payment gateways, your team will have to increase efforts proportionally. You will have to:
- configure several Magento payment methods and their application rules
- negotiate and manage contracts with several service providers
- check cash flows into the web store banking account from each gateway.
Fortifying Your Magento Payment Gateway
Merchants and customers alike are concerned about the level of security of Magento payment methods. Even if you choose only the gateways that are PCI-compliant and have high security scores, there are still some extra measures to take to ensure the safety of customer data.
Magento Secure Payment Bridge
If you switch to Magento Enterprise Edition, you can go with the out-the-box Secure Payment Bridge. The payment bridge is a separate server between your online store and payment gateways. It ensures that credit card data never enters your Magento web store, hence minimizing the risk of a data breach.
As the security of the separate server is managed by Magento itself, the level of data protection is very high. Still, integrating with the Secure Payment Bridge is not an easy task but the one that requires Magento experts’ involvement.
As an alternative to Secure Payment Bridge, you can choose an option offered by some payment gateways and known as Hosted Order Post, or HOP for short. HOP allows collecting credit card data via a special form on the payment gateway server. This means your customers deal with an iframe on your checkout page while all sensitive data is technically processed, stored and protected by the payment gateway. When a payment is complete, Magento receives a transaction key and links it to a relevant order.
Though this measure ensures a higher security level of financial transactions, it is often impossible to customize the hosted checkout page in your brand’s style. So in this case extra security comes at a price.
In addition, HOP integration will require hiring an in-house Magento developer or consulting an ecommerce development company.
Silent Order Post
Conclusion: Payment Gateways and Magento Ecommerce Success
We have explored some of the elements that make payment gateways so important to Magento users. Ultimately though, all these elements (security, shoppers’ preferences, and payment process performance) boil down to one critical factor in ecommerce success—consumers’ confidence. That one factor matters a lot, and nothing shakes a consumer’s confidence more than online shopping security fears. But security concerns aside, your customers also care about countries and currencies, their favorite payment methods, and how well your payment processes perform on their chosen devices. All of these factors ride on your knowledge of Magento payment gateways, and how well you use that knowledge to make the right decisions and choices.
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