Use Of Multiple Payment Gateways – The Benefits

By Author: Sahil Verma
Total Articles: 160
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Everyone wishes to increase their revenue. However, driving ever-faster growth necessitates continuous business and technological innovation. Innovative businesses are constantly pushing the limits of their infrastructure, including online payment gateways, in order to expand into new geographies, markets, and business lines. However, the demands they place on their businesses are frequently limited by the limitations of their technical infrastructures.

One area of constraint for merchants is the payment acceptance solutions they use. In these payment and e-commerce infrastructures, flexibility is essential for innovators. Many payment solutions may not be well suited or adaptable to the unique needs of merchants and marketplaces. As a result, an e-commerce company's ambitions to expand into new markets will be limited or delayed.

As a result, innovators frequently encounter limitations in their ability to adapt siloed solutions to meet their specific business and technical requirements. This paper investigates how innovative, fast-growing businesses rely on multiple payment gateways ...
... to meet their unique and changing payment needs.

Payments Support a Great Customer Experience

Simultaneously, fast-growing businesses thrive by providing an exceptional customer experience. Customers who return and recommend a service expect more than just a fair price. Accepting payments is an important part of the customer experience. Transactions that are declined and approvals that take too long can harm goodwill and reduce customer lifetime value.

Furthermore, the inability to accept payments in the manner that customers demand "or in the markets that customers are in" can result in long approval latency times, or even the inability to accept payments in the manner that customers demand, all of which contribute to a harmed customer experience.

To provide a great customer experience, it is necessary to reduce false declines, reduce latency, and ensure that customers can pay in the way that they prefer. That isn't always easy with a single gateway, as we'll see in this post.

Using Multiple Payment Gateways - Primary Business Advantages
As a result of these challenges, fast-growing businesses connect their applications to multiple gateways to enable both business and technical innovation. Let's take a closer look at some of the main reasons for using multiple payment gateways.

1. Multiple Payment Gateways Support Business Innovation
E-commerce is expanding at a breakneck pace. As this growth continues, more businesses will expand into new markets and develop new business models.

E-commerce services that support more than one payment gateway can introduce new and dynamic business models. A delivery service, for example, aims to bring on thousands of restaurants and corner stores. However, each of these merchants has their own payment provider. The delivery company would rather differentiate itself by making it easy for new merchants to onboard by offering easy connections to whatever gateway the merchant uses, rather than integrating with each provider.

2. Multiple Payment Gateways Increase Geographic Coverage

When your company grows, especially when it expands internationally, the need for more than one gateway becomes obvious. As you sell in different countries, you'll notice that the level of support varies. Some gateways may claim to support a specific country, but in reality, their support may be limited to specific payment methods and currencies. Alternatively, their ability to complete transactions successfully and quickly is less appealing. This is especially true when comparing domestic versus international payments.

An e-commerce service can route transactions to the best online payment gateway that provides the best support for a specific region by adding support for multiple payment gateways. As a result, more transactions are completed successfully across multiple markets.

3. Multiple Payment Gateways Support Business Flexibility

When you consider the flexibility it provides your team, using multiple gateways makes excellent business sense. Working with a gateway in a specific region may reveal that fees, contract requirements, and other business issues reduce the value you receive from your relationship. You can easily shift your transactions to another partner if you work with multiple gateways.

Merchants can use a variety of payment gateways. And, unfortunately, some of them will not be around in the long run. Storing card data outside of the gateway, or in a backup vault outside of the gateway, provides tremendous security and flexibility for your team to switch gateways if necessary.

More commonly, the gateway may simply go down or become unresponsive. When this occurs, you risk losing a significant amount of customer goodwill, not to mention revenue. However, if you have multiple gateways available, you can efficiently re-route transactions through an alternate gateway with minimal disruption.

Another scenario is when a merchant has an unusually high volume of transactions.

4. Use Multiple Payment Gateways to Support Merchant Account Flexibility
There were two types of providers as the payments industry evolved. One that provided both a gateway and a merchant account. And others that were only accessible through a gateway. Despite the higher transaction costs, merchants who desired simplicity frequently chose the combined approach. While higher volume merchants who were comfortable managing the process would frequently use their own merchant account and choose the less expensive transaction fees. While both are valid options, the merchant chooses a middle ground in which both are used.

5. Connecting to Multiple Gateways to Support Payment Options

Offering payment options that your customers require is part of providing a great customer experience. PayPal is an example of this. Many consumers have PayPal accounts and prefer to use PayPal rather than entering credit card information into yet another website because PayPal is one of the world's largest internet payment companies. This same advantage can also be a disadvantage. Having to navigate away from your checkout page to the PayPal site is a bad user experience that can hurt sales.

This problem can be avoided by using multiple gateways. At the same time, this approach serves as an excellent backup in the event that your primary online payment gateway or merchant account fails.

6. Access to Additional Payments Functionality

A merchant may have a preferred payment gateway with which they want to work due to preferential rates or other business benefits. However, that gateway may not provide all of the services that they require. They may, for example, not support Level 2 or Level 3 metadata. Alternatively, they may not support the 3DS.

As a result, connecting to the gateways that cover the required use cases makes sense for business reasons. When Level 2 or 3DS support is required, the merchant can simply redirect transactions to the gateway that meets their requirements.