If you have an e-commerce platform selling high-risk products you may be finding it hard to choose a payment gateway. Here’s how to choose the best payment gateway.
If you want to sell high-risk items online, you might not be able to use some of the common payment gateways. This can initially seem quite disheartening and might stop you from going into business.
But you’ll be happy to know not all hope is lost, as there are some payment gateways which are happy to work with you.
Keep reading to find out how you can find the best payment gateway for your high-risk e-commerce products. By the time you’re finished, you’ll have the knowledge needed to get your store up and running.
Let’s begin!
Define What You Want to Sell
It’s worth noting a wide range of items belong to the high-risk product category.
Odds are you’re not going to be selling items from this entire category. Following this, you should take some time to define exactly which items you are going to sell. Taking this step is important as some payment gateways specialize in specific kinds of products.
If you work with a specialized gateway, it reduces the potential ‘friction’ you might experience during this part of the process. A simple online search should help you find a gateway that’s best suited to your specific product category.
Take into Account Past Customer Experiences
Some of the companies who provide payment gateway services have not been in business for a long time. Some of them may think providing this service is just a fast way to make money because the market isn’t crowded.
Due to this, they might not have the proper infrastructure in place to support clients. They may also lack the staff needed to provide adequate customer service. A lot of the time, you’ll need to work with a payment gateway to determine whether this is the case.
But in some cases, you can read reviews to help you learn more. If you can, try to uncover the experiences of past customers. You can do this by reading some specialist forums dedicated to your product category. You could even visit specialist subreddits.
Is the Pricing Reasonable?
When working with a specialized payment gateway, you’ll find they have higher than usual pricing.
This is sometimes due to the increased costs of working with a specific, high-risk product category. But other times a payment gateway may raise prices because there’s little competition, thus making it easy for them to charge higher amounts.
If there’s no way around these higher costs, you need to consider what you can afford and how it will affect the prices of your products. It might be worth setting up a special spreadsheet to help you work this out.
Make sure you take into account the base fee as well as the percentage you’ll need to pay per item. Review this in line with your profit margin. If you’re left with no profit, you’ll need to raise prices or figure out how you can source your products for less. If you’re struggling to keep track of this, consider hiring an accountant.
What’s the Agreement?
To help secure business, some payment gateways may ask you to sign a contract. The details of this contract are going to vary from case to case.
If you sign up to a contract, you need to ensure you’re aware of all the terms involved. You also want to be certain of any early termination fees. This is important as you might have to pay these if your business no longer needs the services of the payment gateway.
Do You Need Any Special Kind of Hardware?
Some payment gateways will ask you to buy some hardware so you can complete your transactions. This is especially going to be the case if you’re dealing with a physical location that needs a point of sale (POS) setup.
If the hardware isn’t specialized then you should be able to source your own items. If you’re struggling to keep cost low, there’s the option of buying items second hand.
What Are the Payment Terms?
Different payment gateways have different payment terms. This means the time it takes to receive money from your transactions is going to vary. Some companies might take a week and some might take only a day.
Make sure you have a clear understanding of the payment terms before you sign up for a particular offering. If you don’t do this, you may experience some significant problems with your cash flow.
For instance, suppose you sell a significant number of items. So much so, that the items in your store are no longer in stock. If this happens you’ll then need to buy more stock. But if the payment terms are around a week and you have no money, you’ll need to wait.
Until the money arrives in your bank account you won’t be able to rebuild your stock. The time you spend waiting can mean you end up losing out on potential customers. This figure can amount to a lot if a large number of your customers end up being repeat customers.
Will You Have Special Currency Requirements?
It’s also worth noting not all payment providers are able to work with a wide range of currencies. You need to keep this in mind, as this can have a significant impact on your ability to do business.
If you expect you’ll have clients from a wide range of countries, note this down. Then look for payment providers who are able to accept payments from the countries you’re looking to do business with. You may even have special requirements in regards to the way you accept payments.
For instance, some of your customers may use echecks instead of credit cards to complete payments. If you think you’ll need to accept high risk echeck payments, ask payment gateways if they can handle this payment method before using them.
Do You Know How to Choose the Best Payment Gateway?
If you want to start a successful e-commerce store, you’ll need the help of a payment gateway. But if you’re dealing with high-risk products, choosing the right payment gateway can be a bit more challenging.
In this post, we’ve explored how you can find the best payment gateway for your high-risk ecommerce products. You need to first understand what it is you’re going to sell and what category these products belong to. You should also figure out if you have any special currency requirements.
Finding a payment gateway isn’t easy and you’ll likely need to work with many of them before you find the right one for you. As long as you test out the various options on offer, you should eventually find a payment gateway that properly meets your needs.
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