THE SWITCH KIT. Your Ultimate Guide to Switching Payment Gateway Providers

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1 THE SWITCH KIT Your Ultimate Guide to Switching Payment Gateway Providers

2 Table of Contents Introduction 3 The Switching Process 4 The Contracting Phase 5 Technical Integration Phase 7 Common Concerns and Myths 11 How Other Merchants Have Benefited from Making the Switch 17 Conclusion 21

3 Do you ever feel like your business is outgrowing your payment gateway provider? Perhaps your sales are not improving and you suspect your payment gateway may have something to do with it. Or maybe you re just ready for better service, greater value and more robust features. Whatever the case may be, it looks like it s time to switch payment providers. Whether you re a small startup or a Fortune 500, switching payment providers can seem like a daunting task. This ebook will walk through the steps of the switching process and explain some of the misconceptions related to switching payment gateway providers. Change can be hard, but when it comes to switching payment gateways there really isn t anything to fear, just a whole lot to gain. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 3

4 The Switching Process The switching process, although it might sound complicated, is actually quite simple. While the process will be slightly different for each business, it generally breaks down into two phases that occur simultaneously: the Contracting Phase and the Technical Integration Phase The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 4

5 The Contracting Phase WHAT YOU WILL NEED TO PROVIDE Three months of processing statements 1 Prove Your Business is in Good Standing If you are switching from another payment gateway you will need to provide three months of processing statements. This information is generally required in order to prove to the gateway provider that your business is in good standing. The new gateway will use the statements to validate your business by looking at your sales volumes, chargebacks, refunds, etc. Payment companies are required to validate this due to the nature of card payments. Because card charges can be reversed, the networks require that businesses are in a financial position to handle these fluctuations in order to approve them for processing. 2 Document Your Business Beneficiary WHAT YOU WILL NEED TO PROVIDE Proof of business beneficiary Payment gateways need to know who owns your business and who the ultimate beneficiary of that business is. While this may sound like a minor detail it is actually a crucial piece of information for most gateway providers. Payment gateways are required to ensure that the money they process will not be used for illegal activities. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 5

6 The Contracting Phase WHAT YOU WILL NEED TO PROVIDE Contract Approval 3 Sign Contract and Begin Underwriting At this stage the contract will be drawn up and signed and the underwriting process will begin. If you want the process to go quickly make sure you use a gateway that does in-house underwriting. Some gateways farm out their underwriting to large banks that often move at a snail s pace. Others use a hybrid approach, doing their own underwriting for domestic business and farming out the underwriting for international business. By choosing a provider that does it all in-house you ensure a timely turnaround and a streamlined process. It is important to note that not all gateways require that underwriting happen during the contracting phase. Some providers will auto-approve you right away and skip the underwriting process, but this doesn t mean it s forgotten. With these providers, once you hit a certain sales threshold they will freeze your payouts (and possibly your ability to process) until you provide documentation and are approved. Getting approved up front ensures you will not run into any roadblocks down the line. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 6

7 Technical Integration Phase Keep in mind that this phase occurs simultaneously to the Contracting Phase. 1. Sandbox and Developer Testing You will be invited into the sandbox, a replica of the production environment, where you can get a hands-on feel for the capabilities of the payment platform, start building out concepts, and test and preview the new checkout process with stakeholders. Some payment gateways also offer a developer hub where you can simulate code before you have access to the sandbox. This will allow you to send real API calls and get a thorough understanding of how the API (Application Program Interface) works. This can be extremely helpful when vetting providers, as you will be able to see exactly how your code will translate into a final product. Look for a provider that offers full development support, thorough documentation and will be able to help you code if needed. A developer hub combined with strong guidance and support from the payment gateway provider will put you at ease as you move forward with the switching process and get sign-off from stakeholders. 2. Set-Up Production Once you re happy with the checkout flow in sandbox, you will move it along to production. The production environment should be completely separate from the sandbox environment for security purposes. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 7

8 Technical Integration Phase 3. Data Integration During the data integration phase your data will be ported over from your previous provider and you will set up any additional features you have decided to take advantage of such as an account updater service. During this phase you will also decide if you are going to leverage subscription management capabilities and set up your reporting dashboards. PORTING DATA Perhaps you have a third-party provider that is storing your shopper or subscriber information or maybe you are storing this information in your own system. Whatever the case, you are likely wondering how that data is going to be migrated into the new gateway. Your payment gateway provider should be able to seamlessly port over your current data, no matter where it is stored, by extracting that data and breaking it up into smaller pieces. It is important that you ask any potential payment gateway provider you are considering how they handle the porting over of data. Some have more experience than others and you want to ensure you are working with a provider that has a proven track record and secure process for porting this all-important customer information. TOKENIZED BILLING If your current provider uses tokenized billing then that data will be imported into the new system, where new tokens will be created to represent each shopper. If you are not porting over customer data, you can still opt to tokenize future customer data. The tokenization of customer payment data eliminates the need for you, the merchant, to store customer account data, which reduces the PCI compliance burden and benefits the customer who doesn t have to re-enter their payment information every time they shop on your site. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 8

9 Technical Integration Phase ACCOUNT UPDATER SERVICE Some providers will offer merchants the option to use an account updater service because cards expire, get stolen or lost, and are occasionally upgraded. The account updater service helps merchants like you stay in front of these changes that could otherwise cause declines at checkout. This is an extremely valuable feature, especially for those customers in a subscription or recurring billing model. Account updater services also help to: Prevent interruption of customer service due to missed payments Reduce customer cancellation by maintaining the payment relationship Minimize costs associated with collections and with updating accounts manually Keep the updating process transparent to customers INSTANT PAYMENT NOTIFICATIONS (IPN) IPNs are offered by most providers and are set up during the integration phase. These are notifications to you, the merchant, that a purchase has been made, a refund has been requested or a dispute has been issued. By default a CHARGE IPN is sent with each successful sale and a CHARGEBACK IPN is sent when a cardholder disputes a charge with their bank. Most gateways will maintain a broad set of IPNs; be sure to identify the IPNs that your business process requires. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 9

10 Technical Integration Phase SET UP OF PROCESSING AND CURRENCY PAY OUT If you re selling internationally (which is highly recommended in today s global market!) you will want to switch to a payment provider with robust global capabilities. This includes access to multiple acquiring banks, the ability to process payments in multiple currencies, and the ability to pay out in multiple currencies. With the right payment provider all you have to do is choose which countries you want to sell in. The payment gateway provider will take care of the rest, ensuring that you are offering a local experience to shoppers no matter where in the world they are located. QA TESTING AND LAUNCH This phase will vary depending on your preferences. If you want to spend a few weeks QA testing the capabilities, providers should have support teams to help you along the way. If you think an afternoon of QA testing is all you need, your site can be up and running in a few days. If you re selling internationally, you will want to switch to a payment provider with robust global capabilities. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 1 0

11 Common Concerns and Myths If you re like the majority of merchants, you have some apprehension when it comes to switching payment gateways. Often these apprehensions are due to misconceptions about the process. With the right gateway provider, the switching process is simple and can be completed in less than a week. Here are the most common concerns among merchants and what you need to know to dispel your fears. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 11

12 MYTH: There Will be Hidden Fees That Will Impact Profit Margins The cost of switching providers is typically at the forefront of merchants minds. Rightly so, many merchants like you are worried about hidden fees that could eat into margins. This is a valid concern as many providers, possibly even the one you are currently using, charge a variety of fees that are typically buried in your billing statement. Fortunately, not all payment gateway providers believe in charging fees. Some gateway providers today use an all-inclusive pricing model that removes fees, making the bottom line more transparent and forecasting much easier for merchants. Besides asking a potential provider about their billing structure and how they handle fees, you can ask them to take a look at your current statement to see what types of fees you might be currently paying without even realizing it. The providers that take the time to go through your current statement with you, acting as consultants and not just vendors, will be the most likely to offer you full support throughout the extent of your relationship. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 12

13 MYTH: Development Time Will Take Too Long When it comes to switching payment gateways, merchant IT teams typically worry about time to market and how long the transition will take. They want to be sure development cycles will align and the integration will run smoothly. Fortunately, when you switch payment gateways and are using a trusted provider, IT teams need not worry. A good payment gateway provider will work with you to establish a timeline and a go live date from which they will work backwards in order to meet deadlines. The payment gateway provider should be able to move as quickly, or as slowly, as your team desires. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 13

14 404 MYTH: The New Platform Won t Be Stable This is a huge concern for most merchants and it should be. An unstable platform means you are at risk of experiencing downtime and a host of other issues, which could severely impact your business. But there are plenty of payment gateway providers out there today that have put security measures in place to ensure a stable platform. Look for a provider that offers failover protection and uses a hot-hot technology stack. This means that a gateway provider has two simultaneously running servers or data centers so that if one crashes, the other can immediately take over so you will never lose any business. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 14

15 MYTH: We Won t Receive the Robust Reporting Needed to Support Our Business and to Reconcile Payments A few payment gateway providers have developed extensive and user-friendly reporting capabilities for their merchants while others simply offer dashboards with summary level information, making the reconciliation process a difficult one. And then there are some who partner with third-party software providers who, at an additional cost, assist with reporting. Robust analytics give merchants the ability to slice and dice data every which way, and create custom reports for every different department and business need. For example, a robust analytical platform can provide data relating to sales trends, active subscribers, orders by country, currency, payment type, fees deducted for each transaction, deposit dates, currency and payment methods used, etc. Based on the data collected, you can build customized reports to share with sales and marketing teams, finance teams, and investors to analyze the data relevant to their efforts. Creating custom reports for each department can help not only reconcile funds but increase revenue by identifying trends and spotting problem areas. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 15

16 MYTH: Merchant Support Will be Poor Some of the most well-known payment gateway providers offer minimal live support. This can be an issue if your site goes down or you have some other major event with your gateway and you need immediate assistance, not to mention if you would just like some guidance working through specific functionality related to your gateway. The best advice is to find a provider who will be fully available to you and your business needs not only during the switch-over process but throughout your entire relationship. Make sure you understand how you will receive support throughout the entire process to ensure everything runs as smoothly as possible and all your questions are answered. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 16

17 How Other Merchants Like You Have Benefited from Making the Switch You aren t alone in considering a new payment gateway provider. Merchants like you are making the switch every day and realizing tremendous benefits as a result. So, if you are thinking of switching payment gateway providers consider these merchant stories. Because while hearing how easy the switching process can be and reading about all the benefits a really robust gateway provider can offer is great, actually seeing how other ecommerce companies like yours made the switch, and with what degree of success, is often the best form of reassurance and proof you will find. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 17

18 WHO THEY ARE Autodesk is a multinational corporation that is a software business leader for a vast array of industries. Their consumer services are mostly sold online, where the focus is on their 3D cloud based design, engineering and entertainment software. THE PROBLEM As a fast-growing global company with a multitude of products and subscriptions plus single-use payment options, Autodesk was facing a problem when it came to frictionless checkout for international consumers. They needed a payment processor that could consolidate all their online businesses into one place in one MID. Not only did they want one processor, they also wanted: To build their own checkout with more control over their checkout flow A scalable architecture that made it easy to integrate checkout pages into their new businesses Ability to process subscriptions Global reach to expand beyond the United States and allow global shoppers to check out in their own language and currency to increase conversions The ability to accept alternative payment types A single connection to one gateway THE OUTCOME After switching to a gateway provider that allowed for all of these capabilities, offering full global support, flexible integration, a subscription billing engine and a robust API, Autodesk was able to, among other things: Increase conversions by 20% Reach shoppers in 131 countries Achieve a substantial increase in recurring revenue The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 18

19 WHO THEY ARE Disruptor Beam is a gaming company focused on creating community and story-driven games. THE PROBLEM As games so often tell a story, Disruptor Beam was looking for a partner that could help them facilitate frictionless in-game transactions for their web-based players without interruption. User experience was the highest priority, as they wanted their players to be able to have an easy, frictionless experience when buying upgrades, items and quests in the game. They also wanted to make sure they were converting their customers appropriately with a global player base, which meant making sure that customers were comfortable checking out and that payments were not being declined. THE OUTCOME Disruptor Beam chose a gateway provider that offered hosted checkout pages, meaning they were able to reduce the development time needed and be up and running in under a week. As a result of the switch they were able to: Reduce the amount of fields needed at checkout Allow customers to check out in their local language and currency Connect to more than one bank, ensuring that their global customers payments would be routed to a local bank to increase payment success rates As a result they witnessed: Increased profitability on each transaction by more than 20% An expanded reach into over 100 countries Repeat in-game purchases enabled by turning on relevant currencies and localized payment options The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 19

20 Remember switching providers can offer up a host of benefits for your business. By choosing a provider that offers robust global support you will be able to expand your international reach and increase revenue. Furthermore, a strong payment gateway provider will be able to identify and eliminate the friction within your checkout and payment process whether you sell internationally or not. The result of this can be huge and create as much as a 40% increase in sales. You read that correctly. By eliminating the checkout abandonment you might not even realize you have, you could increase your online sales by almost half. Now that s a reason to switch payment processing providers! Finally, a strong payment gateway provider will be able to implement best practices across the board, extensive and user-friendly reporting, and offer robust merchant and customer features. Need more reasons to switch? Contact One of Our Conversion Consultants Today We can discuss any other concerns you may have and access your current billing statements and sales record to determine if a switch is the right move for you. The Switch Kit: The Ultimate Guide to Switching Payment Gateway Providers / 2 0

21 BlueSnap is a global payments company that looks at ecommerce a little differently. We believe every customer has the right to a seamless online experience and the ability to purchase easily, quickly and securely. And because merchants spend countless hours bringing their products to market, they deserve the technology, tools and support to create an exceptional buying experience one that is simple, powerful and dramatically elevates shopper conversion. That s the standard we hold for ourselves and deliver to our merchants. Today, with so many options, market expectations are too high to settle for less. Which is why our merchant success is truly our success. Contact us to learn more about how BlueSnap can help move your ecommerce to the next level. Get Started Today