Impact of Payment Gateway on Online Shopping

Why Online Shopping Needs A Secure Payment Gateway?

One of the main reasons customers hesitate to shop online is the fear of their payment and personal details getting compromised. In the initial days of online shopping, many customers fell prey to credit card fraud while making payments on websites, which created distrust among people about the security of online transactions. 

A secure payment gateway acts as a bridge between the merchant’s website and the bank/payment processor. It ensures all payment information passes through encrypted protocols to keep customer data safe from theft or misuse. 

A reliable payment gateway for online shopping gives customers peace of mind while making purchases from online stores. It builds confidence that their financial and personal details are protected during the transaction process.

What is a Payment Gateway?

A payment gateway is a technology service that authorises internet transactions for online and offline businesses. It essentially acts as the intermediary between the merchant and the bank to facilitate secure financial transactions.

Impact of Payment Gateway on Online Shopping

Here are some ways in which payment gateways boost online shopping:

1. Enabling Secure Payments 

One of the main concerns for customers shopping online was the security of their financial and personal information, such as credit/debit card numbers, bank account details, etc. Early on, people hesitated to provide such sensitive data online for fear of fraud and theft. That’s where payment gateways came in, providing a secure interface for processing online transactions.

Payment gateways ensure sensitive payment information is encrypted using protocols like SSL/TLS before transmission. They also verify transactions and protect against risks like chargebacks. 

This gave customers the confidence to shop online without worries about the security of their payments. The availability of secure payment options through payment gateways helped overcome one of the major barriers holding people back from online shopping.

2. Accepting Multiple Payment Methods

Another advantage of payment gateways for online shopping is that they support a wide range of popular payment methods, such as credit cards, debit cards, net banking, UPI, wallets, etc. This allows merchants to accept payments from a large customer base. 

Early online stores could only accept a limited number of payment modes, like credit cards. However, with payment gateways, merchants can offer their customers flexibility in choosing the most convenient payment option. 

This expanded the potential customer pool and drove more sales. Customers also appreciate having a choice in payment methods as they suit their preferences and needs. For example, many prefer using UPI or wallets for small-ticket purchases due to lower fees. 

The ability of payment gateways to integrate multiple payment options has, therefore, helped increase the adoption of online shopping.

3. Enhanced Checkout Experience

A good checkout experience plays a big role in converting browsers to buyers. Payment gateways optimise this process by offering seamless, one-click payments. Features like saved cards, auto-fill, and express checkout reduce friction. Customers can check out with just a few clicks without re-entering lengthy billing or card details each time. 

This significantly boosts merchants’ conversion rates. Shoppers are also more likely to complete a purchase when the payment process is quick and hassle-free. Payment gateways have streamlined checkout, making online transactions as smooth as possible. 

Their efforts to enhance user experience at checkout have contributed to higher sales volumes for e-commerce businesses.

4. Global Acceptance and Reach 

Another key benefit of using a payment gateway is allowing merchants to accept payments from customers worldwide. Gateways integrate with the local payment infrastructure of different countries/regions to securely process domestic and international transactions. 

This global reach and acceptance help merchants sell to a broader international customer base and expand their market, opening up cross-border e-commerce opportunities. 

Customers can also shop from international stores using familiar local payment methods supported through gateways. The universal acceptance of major payment gateways breaks geographical barriers and fuels the growth of global e-commerce, transforming online shopping into a truly global phenomenon.

6. Analytics and Insights 

Payment gateways also deliver valuable analytics and insights to merchants. They provide data on key metrics like sales volume, average order value, payment method preferences, conversion rates, abandoned carts, etc. 

Merchants can use this data to gain useful customer insights and optimise their marketing, pricing, and product strategies. It helps identify trends, customer behaviour, and pain points during checkout. 

With these actionable insights, merchants can enhance the overall shopping experience and boost sales. Payment gateways’ analytical capabilities empower e-commerce businesses to make data-driven decisions and grow their online presence.

8. Reduced Costs and Fees 

Traditionally, online merchants had to maintain separate payment integrations with each bank or processor. This involved high setup and maintenance costs. Payment gateways consolidate all payment services onto a single platform, eliminating the need for multiple integrations. 

Their standardised application programming interfaces (APIs) make it simple to add new payment options. Gateways also negotiate lower transaction fees on behalf of merchants due to their large volumes. 

All these factors help significantly reduce the total cost of accepting online payments. Affordable payment processing has been key in encouraging more small businesses to sell online and explore e-commerce.

Access the Best Payment Gateway for your Business With NTT Data Payment Services

NTT DATA Payment Services offers secure, reliable and fully-compliant payment solutions to help businesses accept digital payments. Businesses of all sizes can sign up for our payment gateway solution in minutes and start accepting online payments worldwide. 

NTT DATA Payment Services offers a complete payment solution to advance both your offline and online businesses. From online payment gateway and POS machines to IVR payments and Bharat QR Scan and Pay, we ensure convenience and safety for all your payments.

Conclusion

A reliable payment gateway for online shopping plays a pivotal role in building customer trust and driving sales for e-commerce businesses. It addresses the major pain point of payment security that hinders online transactions. 

By offering secure, flexible, and optimised payment processing, payment gateways have become indispensable in online commerce. They are one of the major contributors to the rapid growth of the online shopping industry globally.

FAQs

1. What is a payment gateway?

A payment gateway is a technology service that authorises internet transactions for online and offline businesses. It acts as an intermediary between the merchant and the bank to facilitate secure financial transactions.

2. Why do online stores need a payment gateway?  

Online stores need a payment gateway to process online payments and build customer trust securely. It encrypts sensitive payment data and protects against fraud, overcoming security concerns that were hindering online shopping adoption.

3. How does a payment gateway work?

A payment gateway encrypts card and bank details during transaction processing. It verifies payments and transfers funds securely between the merchant and the acquiring bank after authorisation. Gateways also support multiple payment options and optimise the checkout experience.

4. What are the benefits of using a payment gateway?

Key benefits include enabling secure payments, accepting multiple payment methods, enhanced checkout, global reach, valuable analytics and insights, and reduced overall costs of payment processing.

5. Which payment methods do gateways support? 

Popular payment gateways support credit/debit cards, net banking, UPI, wallets, cash on delivery and other domestic and international payment options. This allows merchants to cater to diverse customer payment preferences.