How Does a Payment Gateway Affect Your Conversion Rates

Reaching the final stage of a customer journey must be a satisfying experience, especially if you come across a simple checkout and a sturdy payment gateway. If you recall the last time you were making an online purchase, how smooth was that process? Also, did you feel secure leaving your personal and financial data in cyberspace?

It’s only when we approach payment processing from a customer’s point of view that we actually see how they perceive the entire payment operation.

Hence, the checkout experience – i.e., the part when you’re supposed to enter your credit card data – must be the parmigiano you scatter around the delicious pasta you’ve just made. 

And yet, some merchants keep suffering from terminal cart abandonment and don’t even get to the parmigiano-scattering part.

This article analyzes the correlation between the checkout and conversion or bounce rates. 

Checkout vs. Payment Gateway

Let’s first see the difference between checkout and payment gateway. 

What Is a Checkout?

Checkout is the last stage of a customer journey, when the buyer submits their billing and shipping data, picks the payment method, and confirms the purchase. This landing page must be visually well-organized and textually plain, so that the buyer isn’t even 1% confused or suspicious about the checkout form, security, and the entire procedure. If you’re in two minds over your checkout page, always sacrifice the visual appeal for the sake of functionality. A neat and straightforward checkout page is more likely to bring high conversions and revenue. 

What Is a Payment Gateway?

A payment gateway is software that securely streamlines online transactions from customers to merchants. Picture it as a controlling tool that enables the transfer of sensitive payment data, such as credit card numbers, CVVs, etc., between buyer, seller, and financial institutions. 

Fully functional and properly secure payment gateways use complex encryption and tokenization features to keep the data intact. 

Shady Checkout Boosts Cart Abandonment

Designers, developers, and UX writers know that the checkout needs to be simple, for sure. So, why does a certain number of merchants stir things up at the exit instead of keeping them plain?

The first reason is the intention to be unique, visuals-wise. For instance, you’ve seen that your competitor has a simple checkout page, and you know they’re doing well. However, you opt for a visually attractive checkout that turns out to be less intuitive, leading to a lower conversion rate. Hence, don’t try to stand out where being different causes confusion. 

The second reason is that payers might not perceive your checkout section as secure. This more often happens to small and mid-sized businesses (SMBs) than to big business players. From a payer’s point of view, we can understand this concern; we expect that a renowned brand has protected all their online features, payment included. 

As opposed to that, we might not feel the same when buying from a small, recently updated SMB. 

Enhanced Security for Payment Gateways

Here’s what new or SMB-merchants can do to boost payers’ trust in their checkout page:

  • Use HTTPS (hypertext transfer protocol secure). This extension of the regular HTTP uses an encryption protocol named Transport Layer Security (TLS), which is a guarantee of secure and encrypted communication – in this case, between the payer’s computer or smartphone and the payment gateway. When your customers see the https padlock symbol, they’ll already feel relieved. 
  • PCI Compliant symbol. Make sure to include a PCI icon somewhere on the checkout page. When a payer knows that your business follows the PCI SSD regulations, you’ll leave an impression of a serious and trustworthy company. 
  • Website credibility seals. In addition to the PCI icon above, place additional seals that prove your website is secure and trustworthy (antivirus, antimalware, certificates of relevant business associations, etc.)
  • Terms and Conditions. A checkout page that has no terms and conditions or privacy statements is a red flag. Include a link to Terms and Conditions that the payer must mark as read to complete the purchase. 

TPP Intel: From our own website to our clients’ payment gateways and processing procedures, ThePayPortal adheres to all the international payment compliance standards, security and encryption requirements, anti-money laundering (AML) regulations, and fraud-prevention policies. 

Speed and Credibility Yield Trust

Imagine a software development company with a slow or unintuitive website. When you, as a digital merchant, visit such a page, you might think it’s a bit odd. Of course, if there are credible testimonials and positive online reviews, you can put that aspect behind and start doing business with such an entity. 

But when, say, an ecommerce website has slow load time, it will lead to a high bounce rate. 

Even if your pages load in no time, the payment gateway must operate equally quickly to ensure and retain high conversion rates.

So, when the developers in charge have finished your website development, having successfully integrated the payment gateway behind the checkout, be the first to try how the entire payment system works. 

If possible, ask some other people from your environment to test how intuitive the entire customer journey is, especially the payment experience. Whenever necessary, adapt the checkout page and let the payment gateway implement the necessary changes to user requirements. 

Fees – Measure Thrice, Check Twice, Cut Once

Depending on the number and scope of online billing services, every provider incurs different fees and commissions for their work. 

When a merchant is thinking about the payment gateway that will carry out all the necessary operations, comparing different fees is a wise thing to do. Shopping around a bit is another smart move to obtain the best gateway services out there at the most optimal price. 

What’s not clever is to decide on a payment gateway only by the affordability of their offer. Bear in mind that payment gateway providers are commercial businesses that base their sustainability on profits. As many of them operate in the high-risk payments niche, oftentimes they charge high commissions for their services. So, if you come across a payment gateway deal that looks too good to be true, double- and triple-check it. Too cheap a payment gateway might lead to issues in checkout and gateway speed and credibility, causing low or no conversion.

This is even more obvious when a payment gateway and payment processor are the same entity. If someone carries out all the legal, financial, and technical operations on your behalf, they won’t make it at a flea-market rate. 

For all the above, when you’re choosing your payment gateway and/or payment processor, measure thrice, cut once. 

The Final Word

A slow, too expensive, or outdated payment gateway is not something that any merchant should look for. Even if it’s more affordable than its updated and pricier counterpart, it will most probably cause issues in functionality and conversion rates. Therefore, always go for a reliable payment gateway that keeps implementing new tech and compliance features 24/7. It will let you stay in the game and increase your conversion rates. Reach out to us to learn more about all our merchant services.