How to Choose a Payment Gateway

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1 This white paper is one of many articles prepared by Skipjack to help merchants and developers get the most out of payment processing. To view others, please visit How to Choose a Payment Gateway Comparing s and Services

2 If you want to accept credit or debit cards online, you will need a means to connect to the banking network to process transactions. This role can be performed by your bank, a processor or a third party payment gateway (such as Skipjack). The payment gateway connects your payment application to the financial network, enabling you to authorize, settle and otherwise manage your transactions. In addition, the payment gateway may provide a wide range of addition features to help improve the way that you manage your business. But what features should you look for, and what value are they to your business? This article provides an overview of some of the features that you may find important, and provides a checklist to make your payment gateway search easier. s Wading through the features offered by payment gateways can be a real challenge. Understanding what the features will enable you to do and which ones are important is a prerequisite to making a decision on which gateway to choose. The following highlights some of the key features to look for and a quick description of each: Must Have Fast processing speed Multi-currency support Application transparency Full, partial and blind credits notification options Customizable AVS Support CVV2/CVC2 Support Web-based Reporting Multi-processor connectivity Transaction Management Multiple settlement options Support availability Data redundancy Nice to Have Multi-cart support User definable fields Get Status Change Status Downloadable reports Recurring payments PIN-based debit support Provides authorization responses in 5 seconds or less in real time. This eliminates frustrating delays for paying customers. Offers support for US and at least one other currency. This gives you flexibility should you choose to target other countries in your sales efforts. Enables you to control the look and feel of the order form once the customer clicks pay. Keeps the domain name (URL) pointed to your site to avoid customer concerns over security. Allows you to issue refunds for the full amount, part of the original amount, and in the absence of an original transaction (blind) through a secure web interface. Enables customers and/or merchants to receive an once a payment has been made. Allows merchants to define the content of the s that will be sent to customers for successful or denied transactions. Configurable settings that let merchants define the degree to which billing address info needs to match that on file with the cardholder s bank prior to approving the transaction. Additional fraud support enabled by entering codes on the back of VISA and MasterCard credit cards into the payment form for verification. Reduces the risk of fraud. Access to standard and customized reports via a standard web browser. Connection to multiple financial processors (e.g. TSYS, Global Payments, etc.) to maximize the number of merchant banks that can be used. Eliminates the need for merchants to switch banks to use the gateway. Provides you with a browser-accessible method of voiding, crediting, reauthorizing and setting transactions, as well as viewing transaction level detail. Enables you to automatically settle transactions on a schedule of your choosing, or select specific transactions for settlement on a manual basis. Available technical resources to answer your questions with respect to transaction processing. Robust technical infrastructure, including redundant servers, connectivity and redundant data center. Eliminates risk of data loss. Connectivity to multiple popular shopping carts so that you can choose one that best meets your needs. The ability to send and store data above and beyond the basic credit card/cardholder data. Excellent for capturing such things as demographic information, employee identification info, etc. A means whereby the gateway can query its database to determine the state or existence of a specific transaction. Ideal for instances where connectivity loss resulted in a transaction whose status is unknown. The ability to change the status of an existing transaction from an external application (e.g. credit, void, settle, etc.). Enables developer to create more powerful and functional applications. Provides a means of downloading reporting data in a format that is acceptable to third party applications (e.g. database, spreadsheet, billing systems, etc.) or for simple viewing and printing. A mechanism to automatically charge a customer s credit card on a predefined schedule without having to resubmit the credit card information. Support for PIN-based debit card payments.

3 Applications Virtual Point of Sale Online forms Batch Wireless Specialized Provides a means of processing and managing payments that arrive by phone, fax or through an easy to use web interface. Customizable online order forms that can be used to facilitate payment for products or services. Enables the upload of multiple transactions for authorization, credit or settlement in a single file. The ability to process credit card orders via a digital cellular phone, PDA or other wireless device. Range of specialized applications targeted at specific types of merchants (e.g. universities, retailers, etc.). Services Development Support Merchant Account Services If you need assistance in connecting your application to the payment gateway, companies that have in-house development expertise may reduce your development cost and time to market. Companies that will advise you in obtaining a merchant account are valuable. In addition, those that offer merchant accounts directly may have some value to merchants that aren t able to get them through traditional banks. Watch that you re not spending more than you have to on merchant account fees. Other Track Record Commitment to Customer Service Gateways that have been in existence for several years and clearly have a significant customer base offer a reduced risk of failing. This reduces your risk of having to incur the cost and time of migrating to another payment gateway. Although difficult to assess ahead of time, the gateway s responsiveness to your questions early on are a good predictor of their future behavior. When searching for a payment gateway, don t be afraid to ask lots of questions. How accurate and responsive they are to your questions is probably a good indicator of whether you want to do business with them. The payment gateway is an important component of your business, and you want to make sure that you re making an informed decision. Also, while price will clearly be a factor in your decision making, don t be blinded by ridiculous pricing offers. You often get what you pay for, and payment gateways without sustainable business models are likely in the business for the short-term rather than the long. Look for well balanced companies with the right mix of features and value for your business. You don t want to have to change gateway providers if it is avoidable, since it can be costly, cause disruptions in your business and affect your customer service levels. 2

4 Payment Gateway Comparison Checklist The following checklist is provided as a convenience to merchants wishing to compare features and other items among various payment gateways: Item s Fast processing speed Multi-currency support Application transparency Full, partial and blind credits notification options Customizable AVS Support CVV2/CVC2 Support Web-based Reporting Multi-processor connectivity Transaction Management Multiple settlement options Support availability Data redundancy Multi-cart support User definable fields Get Status Change Status Downloadable reports Recurring payments Applications Virtual Point of Sale Batch Wireless Custom Services Development Support Merchant Account Services Other Track Record Commitment to Service Other s Price Setup fee Monthly fee Transaction fee Support fees Other monthly fees Other per transaction fees Skipjack Gateway 2 Gateway 3 Gateway 4 Gateway 5 3

5 Summary Your choice of payment gateway is an important component of your online business. Appropriate research should be conducted in order to determine the provider that best meets your needs at an acceptable price. Defining what is important to you prior to starting your search will help in the comparison process. Ask lots of questions, and use the checklist provided above to help guide your search. If you want to find out more about what Skipjack has to offer, please give us a call toll-free at We re here to help. About Skipjack Financial Services Skipjack Financial Services, a private company headquartered in Cincinnati, OH, provides electronic payment processing and management solutions to thousands of merchants in the United States and Canada. Skipjack s products and services are used by small businesses and Fortune 500 corporations alike, in support of their mission critical processing needs. Today, Skipjack provides highly flexible, secure and reliable solutions to merchants in traditional bricks and mortar retail, mail order/telephone order (MOTO), and/or Internet-based environments to improve their process of accepting payments. For further information about Skipjack, please visit or call (888)