Pros & Cons of Having Multiple Payment Gateway on Your Website


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Not all payment gateways work efficiently in all countries. So, adding multiple payment gateways can route the transactions to the gateway that processes efficiently in that particular region. But what is multiple payment gateway? What are its advantages and disadvantages? If you have the same questions, do not worry; we got you covered. Read on to know the answers to these questions.

What is a Multiple Payment Gateway?

Before talking about the concept of multiple payment gateway, let us understand what a payment gateway is. A payment gateway (PG) is a way through which the consumer connects to merchants’ platforms to process payments. Payment gateways securely transfer money from the consumer bank account to the seller. 

Pro Tip: What Is Payment Gateway

Multiple Payment Gateway

Multiple payment gateways mean one merchant offering various gateways (at the same time or different times) on their payment/checkout page. Some surveys show that offering multiple payment gateways can increase the trust of the customer. It also improves the chances of successful transactions. Now, both the PGs may be offering the same services. (in terms of payment modes, checkout experience etc.)

By adding multiple payment gateways, merchants can route transactions to the gateway that provides the best support for that region. This results in successful transactions across multiple markets.

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Multiple payment gateway definition

Multiple payment gateways can be integrated into a website in two ways:

  1. Integrating multiple payment gateways at once 
  2. Integrating multiple payment gateways but routing them selectively 
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Ways of integrating multiple payment gateways

In the next few sections, we will discover the pros and cons of using multiple PGs at once.

Advantages of Having Multiple Payment Gateways

Improves Customer Trust

When a customer is on the payments page and they see a payment gateway that they have never heard of, then the customer might not feel safe to proceed with the transaction. Since customers need to enter their bank details through the payment gateways, they always prefer the gateway with which they have had a better experience in the past. So, instead of one payment gateway, if merchants offer multiple payment gateways, it increases the chances of customer trust and conversion rates.

For Backup Purpose

We live in a technologically-driven world, and the chances of technical failure in some scenarios are high. Even payment gateways are no exception to this. There might be cases when one gateway fails to process the payment due to sales overload. In such cases, consumers can move to another seller to purchase that product. It is always better to have multiple payment gateways on the merchant website to avoid such scenarios.

Improves International Sales

A research report suggests that 8% of 1,799 respondents said that they abandoned a shopping cart during checkout due to lack of payment options. The key to solving this issue is to enable multiple currency options on the checkout page. 

With an e-commerce website, one can sell to anyone without location restrictions. The currency from country to country changes, and one payment gateway is not enough to process payments from several countries. To collect payments from international customers, merchants need to deploy multiple payment gateways on their platform. Selling internationally not only improves the business but also improves the seller’s geographical coverage.

For Instance, Cashfree supports 30+ currencies. Customers can choose to pay in these currencies provided that the merchant has provided all the appropriate documents and gained approval from the banking partners.

Meets All Customers Needs

Different payment gateways offer different features. It is hard to find all the features in one payment gateway. Some gateways don’t accept a few brand cards, and some don’t offer monthly subscriptions. If customers don’t find the one which has the features they want, it can decrease the conversion rate. Multiple payment gateways offer payment flexibility to the customers.

Provides Analytical Data

Payment gateways offer different kinds of data to the seller. The type of data that is offered by all payment gateway companies is not the same. Each data has its purpose during data analysis. Based on this analytical data, merchants can make informed decisions to improve their business.

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Pros and cons of multiple payment gateway

Disadvantages of Having Multiple Payment Gateways

Integration Issues and More Paperwork

Having multiple payment gateways involves multiple integrations and more contracts that need to be signed. Integrating the step up is not a hassle-free process. It consumes a lot of time, and issues may arise if not integrated properly. Since the merchant is installing multiple payment methods on their website, it involves a lot of paperwork. Merchants need to go through a lot of documentation processes.

Higher Costs 

Installing multiple payment gateways on the website can cost more to the seller. Multiple payment gateways not only costs more, sometimes tracking processing fees of all the payment gateway costs you more time. To avoid this scenario, some business owners adopt combined payment services.

No Volume Pricing Advantage

Gateway companies charge less to sellers if they process more sales through their payment gateway; this is called volume pricing advantage. The chances of achieving a volume pricing advantage are more if the seller has only one payment gateway on their website. This also reduces the charges that are paid to the payment gateway company. Let us assume that there is a seller who installed multiple payment gateways. Because of multiple gateways, payments are distributed amongst them, which reduces the chance of having a volume price advantage.

Complex Failover Logic

Multiple payment gateways need complex failover logic. Let us say payment gateway A failed, then what’s next? Should it redirect to gateway B or C? This involves complex logic, and it is not good for the conversion rates. One needs to be careful while deciding the best redirection method for failed transactions.

Complex Report Analysis

Multiple payment gateways offer different kinds of reports. Analysing all the data in those reports consumes a lot of time. To manage all those reports, the seller has to develop their reporting system to combine all of them.

Operational Challenges

Having multiple payment gateways on the website will cause numerous operational challenges. Let’s say someone had a failed transaction, but the amount was deducted from their bank account. If that customer calls the support to enquire about the refund, it would be harder to track which payment gateway the amount was deducted from. These challenges can be solvable, but it consumes more time and needs additional software products to point out the errors.

More IT Resources Required

If a merchant adopts multiple payment gateways, then they need to allocate more IT development resources to maintain them. These gateways involve complex multiple payment gateway integrations, and in case of high sales volume, there are chances of gateway failures. To solve such scenarios, more IT employees need to be employed to make the gateways run smoothly. In the case of a single payment gateway system, there is no need to allocate more IT resources.

Features to Have in Multiple Payment Gateway

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Features to Have in Multiple Payment Gateway

Able to Integrate With The Book-keeping Program

Above, we already discussed the complexity of consolidating the reports that are generated by multiple payment gateways. If anyone adopts multiple payment gateways, they should choose the ones that can integrate with the book-keeping program to generate auto sales reports.

More Payment Modes

Offering multiple payment modes can improve sales. Payment habits vary among the customers. Some wanted to use internet banking and others may give preference to UPI or debit/credit cards. So, choose a PG that offers more payment modes.

Should Support International Payments

Once your eCommerce store is online, buyers may visit it from all over the world. It is essential to choose a PG that supports international payments.

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How to choose a payment gateway?

Should offer Timely Support

It is important to choose a PG that offers good support service to its customers. Choosing the one with bad customer service can damage the sales.

Should Offer a Good Success Rate

Selecting a gateway with a low success rate can badly affect the conversion rates. So, always choose the one that offers a high success rate.

Should Offer PCI-DSS Compliant Security

PCI-DSS compliance systems securely allow the customers to store their data in the gateway for recurring payments.

Should Be Cost-effective

No one wants to install a payment gateway that costs tons of money in the name of processing fees and transaction costs. So, choose a cost-effective one. But that doesn’t mean choosing a cheap and low-quality one. Moreover, there are substantial MDR differences for the same payment methods across different PA/PGs.

Free Setup and Zero Maintenance Charges

A good payment gateway sets up the system for free and offers zero maintenance charges. Cashfree charges zero setup fee and maintenance charges from merchants. 

Should Offer White-label Wallet

Some payment gateways allow the user to perform transactions from a mobile wallet. Nowadays, most consumers use their mobile wallets to process almost all kinds of payments; so, choose the one that supports a white-label wallet.

Should Accept Recurring Payments

Choose a payment gateway that can accept recurring payments. Many consumers set recurring payments to subscribe to products of certain businesses. If they don’t find this option, they move to another seller.

Cashfree Subscriptions helps in setting up and management of recurring payments for your customers. Using Cashfree Subscriptions, sellers can easily manage subscriptions for the customers and charge them automatically as per the plan.

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Recurring Payments

Should Be Mobile Friendly

Nowadays, most of the payments are made using smartphones; so, choose the payment gateway that is mobile friendly.

Using Multiple Payment Gateway but Routing Selectively

Above, we mentioned many cons about multiple payment gateways but those can be avoided by routing them selectively. Instead of routing payment to a random PG, if the payment is routed to the PG that performs best in that particular region can improve the payment success rate. Moreover, some PG’s work well on mobiles and some don’t. Routing PG’s selectively to web users and mobile users can improve the conversion rates.

Key Factors To Consider While Routing Transactions

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Key Factors To Consider While Routing Transactions

Some of the key factors to consider while routing transactions are as follows.

Cost

There will be differences in merchant discount rates among various payment gateways. Merchant Discount Rate (MDR) is the fee charged to the merchant whenever a customer makes a payment on his website using a credit or debit card. So, merchants should consider these costs while routing transactions.

Payment Success Rate

The success rate of one PG may vary from the other PG. The merchant can choose to route the high volume transactions to the PG that has an accomplished record of successful transactions of a large number of funds.

Downtimes

System downtimes are common and they happen due to server issues. So, the merchant needs payment gateways with dynamic routing capability.

Balancing Load

There will be certain days in a year when merchants offer huge offers on their products. During such events, there is a chance of a high load on the PG. So, it is better to choose the one that can handle such loads while routing transactions.

Business Use Cases

You can route transactions to the PGs on the basis of the business use cases. Some PGs have unique solution fitted to a particular industry and their financial needs. Let’s take an example here. Cashfree payment gateway has customized solutions for many industries. Their eCommerce payment gateway has unique payment products like subscription, partial, full and instant refunds, split commission with vendors and many more.

How To Route Transactions Efficiently?

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How To Route Transactions Efficiently

Success Based Routing

Machine learning algorithms can monitor and get trained from payment failures across the ecosystem and make fully automated routing decisions. All possible combinations of PG errors and payment methods that caused the failures can be taken into account. In fact, the algorithms can identify potential downtimes in near real-time, 

What if the downtimes are not global and specific to the merchant? Well, here the router can make routing decisions using merchant level pattern. Moreover, the merchant can configure thresholds of failures at your merchant account level or payment method level. They can even choose to enable or disable payment methods to be a part of the routing algorithm.

Health-based routing

A mathematical algorithm can evaluate payment gateway health and assign scores keeping the company’s business needs in mind. These scores can be used to filter out poor performing getaways at the time of transactions.

Business rules-based routing

Every business can make some routing rules based on the payment parameters like card brand, issuer, payment method etc. According to their needs, business owners can build their own routing rules. 

Conclusion

No one wants their payment to get rejected and go through customer support to get their refund. Payment gateways are the most important component of the customer’s buying experience. The better the user experience, the higher the conversion rate will be. If the merchant uses a sub-standard or unfamiliar payment gateway, the consumer may not process their transaction and the chance of moving to the competitor’s website increases. 

A good payment gateway improves customer trust and builds your brand. Businesses always need a gateway that is compatible with their website; otherwise, an unsupported payment gateway can cause many issues. In this article, we discussed the advantages and disadvantages of multiple payment systems. It is better to consider all of them and research more before setting up gateways on e-commerce websites.