8 Key Factors for eCommerce Payment Processors

The right payment processor can help take your eCommerce business to the next level. A robust payment processor provides a strong customer experience and supports your growth. Choosing the right processor to grow your business can be difficult.

According to Emarketer, eCommerce sales were expected to reach £177.11 billion in 2024. Sales will be at their highest level since 2021. Your store must be able to support higher sales volumes.

Payment processors handle online transactions. They connect your business to the banks of your customers and yourself.

Whether your customers shop online or in-store, payment processors gain bank approval to transfer funds into your account. Without this technology, you will struggle with credit card or ACH payments.

Your payment gateway may be all you need for sales, but there is a difference between a payment processor and a payment gateway. Gateways collect, encrypt, and verify credit card information. Meanwhile, processors are virtual POS terminals that support payments.

Payment processors can work without a gateway, but gateways must work with processors.

How important is a processor that matches your business needs? Here are eight key factors when choosing a payment processor for your eCommerce store:

Fees and Pricing

For most eCommerce store owners, the costs of payment processors are essential.

Different payment processors have different pricing models. These can include flat fees, percentage-based fees, or hybrid pricing. Some services charge monthly fees, and access to some services is locked as a premium feature.

Transaction fees can range from 1.5% to 3.5%. You should also look for setup costs, which may come with some fees for setting up the payment processor in your store.

Hidden fees can be damaging for small businesses. Check small prints and reviews for unexpected costs for international payments or chargebacks.

Payment Methods

Knowing your customers is half the battle, but using the right technology to match their needs is another matter.

Use a payment processor that supports a range of payment options. These include:

Credit and Debit Cards: This is the most popular payment method you’ll receive as an e-commerce store. Your payment processor should support VISA, MasterCard, and Amex. 97.1% of the ecommerce market offers Mastercard and VISA payments, while only 61.5% offers American Express.
Digital Wallets: This payment method is becoming more popular in mobile commerce. Because customers can pay with one tap, many prefer to use digital wallets such as Apple Pay, Google Pay, and PayPal.
Buy Now, Pay Later: Ensure your payment processor allows BNPL payments. BNPL payments enable customers to buy the goods now and defer the payment until later. Known services to include are Klarna and Afterpay.
Bank Transfers: Direct bank transfers are less commonly used in e-commerce. However, investing in a payment processor that allows a customer to send money directly to the merchant is ideal for international transactions and sensitive purchases.

Introducing multiple forms of payment is helpful for international stores. If you sell high-quality products, you could drive more sales using a Klarna buy-now-pay-later (BNPL) service.

Modern payment processors also accept payments with cryptocurrencies and even QR codes.

Tokenisation

The ability to save information for repeat purchases or recurring billing is a big part of a positive customer experience. To keep your customer data safe, your payment processor should support tokenisation.

This process replaces sensitive card information with a unique identifier or token, preventing unauthorised access to the actual card data.

Tokenisation works when your processor turns card information into a token to identify customers. If anybody tries to hack your processor, they’ll be unable to steal the data.

Integration with eCommerce Platforms

The last thing you want is for your payment processor to clash with your eCommerce platform. Your processor should integrate with the platforms such as Shopify, WooCommerce, and Magneto.

This allows for a smooth payment process. Always check with your provider to avoid any expensive mistakes.

The Need for Speed

Quick access to funds can make all the difference between smooth operations and struggling to manage your inventories.

Instant access to your funds enables you to pay suppliers on time. It also allows you to adapt to any inventory changes quickly. This will help you support your ecommerce business in a time of need.

Securing funds is key for your business. Check how long your processor takes to transfer funds to your bank account. If the delays are too long for your needs, look elsewhere.

Compliance

Noncompliance is an expensive error you can make when running an eCommerce store. Make sure your payment processing platform follows security standards.

The payment card industry (PCI) and data security standards (DSS) protect customer data.

These processors offer features like fraud detection, secure payment gateways, and encryption. These are important for a positive customer experience.

Customer Support

Your customer experience model could suffer if payments fail and they cannot find support.

If your eCommerce business offers good customer support, up to 78% of customers are still likely to buy from you again.

Modern payment systems are API-integrated with your order management platform to create a secure connection with your support team. Always check that your payment processor offers customer support.

Scalability

You should have a payment processor that can grow alongside your business.

Business growth is essential as an online seller. As the competition heats up, your store must be ready to adapt.

Check that your processor can support the payments you currently get and those you expect to receive.

Ecommerce businesses must be prepared for seasonal changes. They should also be ready for traffic influxes during busy periods.

International stores should also account for large payment volumes from multiple locations and currencies.

Finding Sustainability

The right payment processor can offer customers flexible payment options. This means that nobody is turned away in the event of a problem.

Good customer service and more choices help you retain customers.

For example, offering customers the chance to pay later opens up your business to more sales.

Allowing access to your online store from international locations is also an easy way to increase sales.

Finding a solution that can meet customer demand with the future in mind can set you on your way to building a successful store. By taking these considerations now, you can create a sustainable business for the future.

About the author

Dmytro is a Founder and CEO at Solvid, a leading inbound marketing agency based in London, UK. Solvid specialises in helping fintech and SaaS companies generate sales and organic traffic.