Using multiple payment gateways: the pros and cons explained
If you run an online business, it can be immensely beneficial to integrate multiple payment gateways into your platform. By using multiple gateways, you can accept payments from a wide variety of customers and offer them multiple payment methods. Not only does this make the payment process more streamlined for clients, but it also makes your business more reliable and risk-proof.
This article will explore why it's worth using multiple gateways and how to understand if your business needs to work with multiple or a single main payment gateway. Continue reading to learn if this strategy is worth a shot in your case.
Why use multiple payment gateways?
It could be tricky to rely on a single payment gateway. Unfortunately, no one is immune to outages and downtimes. Only 6% of businesses surveyed didn't experience an unplanned outage, and 61% of companies have faced it more than twice yearly. This issue is especially critical for a rapidly growing business, as every minute of downtime incurs financial and reputational losses. Integrating multiple payment gateways helps you to avoid it and ensure operational continuity no matter what.
Mitigating the risk of payment gateway crashes and downtimes may be a sufficient reason for many businesses to connect multiple gateways. Still, the main reason to consider this approach goes beyond granting the technical ability for customers to pay you. It's providing them with the best possible experience on their payment journey.
Using several payment gateways allows you to offer support for multiple payment methods while enabling customers to pay in their preferred currency. It makes your business flexible and scalable. It is also highly beneficial for growing merchants expanding globally. The more robust your payment stack is, the more local specificities and preferences you can cover. It converts directly into customer satisfaction and later loyalty.
How to determine if your business needs multiple payment gateways?
When deciding if your business needs multiple payment gateways, there are specific characteristics you should consider. If your business processes a high volume of payments, is large in size, or operates internationally, it’s more likely to benefit from multiple payment gateways support.
Small merchants that operate locally and process a low volume of payments might not need to set up multiple payment gateways, as having one preferred payment gateway that offers the best service could suffice. However, having multiple payment gateways allows businesses to offer multiple payment options to customers, making sales easier.
For larger merchants, using multiple payment gateways is usually a must. Statistics show that businesses with more than 500 employees typically have 6-7 payment partners. It is because larger merchants often have international customers and need to be able to accept different payment methods and currencies. Moreover, many large businesses offer subscriptions and recurring payments, which may require specific payment services or features offered by different payment gateways.
Using multiple payment gateways allows merchants to streamline the payment process and optimise transaction processing. Furthermore, offering multiple payment options increases customer satisfaction, resulting in more successful transactions and higher customer retention rates. Therefore, if you want to ensure your business has the best chance of success, it is worth considering integrating multiple payment gateways.
Let's take a closer look at the benefits and pitfalls of connecting multiple payment gateways.
Benefits of multiple payment gateways on board
- Better customer experience. Make the payment process streamlined and frictionless by offering support for the different payment methods and allowing customers to make payments in multiple currencies.
- Facilitated expansion. When expanding your business abroad, you'll have to provide not only primary global payment methods but also local options, which are loved and trusted in a particular region or country. You can do it with just one payment gateway on board. Still, with multiple gateways, you can ensure the best coverage, fees, and stability while providing a variety of payment options at the checkout.
- Increased conversion. Having multiple gateways pays off by boosting your approval rates. It helps avoid customers' frustration when they form orders and proceed to payment to find out there's no suitable payment option for them. Moreover, in case of any glitches on the provider's side, you can reroute the transaction to another vendor instantly and seamlessly. Such flexibility and versatility save your sales.
- Optimised payment flows. Payment routing can do magic, helping you process transactions at the most appealing fees and the highest acceptance rates. Alongside failover management capabilities, it helps to minimise declines and ensure all transactions are processed optimally.
- Access to alternative payment methods. Multiple payment gateways help you enrich the checkout experience for your customers with a range of different payment methods, such as mobile wallets (an increasingly popular payment option), bank transfers, and cryptocurrency. According to Statista, alternative payment methods accounted for more than 40% of all online payments in 2020, demonstrating how important it is for businesses to implement them. It helps create a more diverse customer base as customers can complete the checkout process using the payment method they feel most comfortable with.
- Comprehensive functionality. Various vendors offer various conditions and supporting features, so the more payment partners you have, the more of your specific business needs are covered and the more capabilities you have to process payments.
Drawbacks of using multiple payment gateways
- Integration hassles. The process of integrating one payment gateway can be very complicated, and that complexity is multiplied by the number of payment partners you want to connect. Development and setup can get very resource-draining.
- Cumbersome management. Right after the integration come administration and management. You'll have to stay in contact with every payment partner to solve occurring issues and make amendments to your partnership.
- Larger processing fees. Different payment gateways charge different fees to process payments. On average, payment gateways charge merchants 2-3% of the transaction value plus an additional flat fee per transaction. You may have to pay additional fees for integrations. Some payment gateways may also charge additional fees for recurring payments. The more online payment methods you want to offer, the more payment gateways you need to set up, which can get expensive. All in all, the fees associated with different gateways vary significantly, so examine the pricing before getting started.
- Maintenance issues. Aside from paying maintenance fees, there will be cases when development efforts are needed, i.e. for upgrades or to expand functionality. Besides, you'll have to monitor PSPs' health, which is not a piece of cake as standards vary from vendor to vendor.
- Disparate data sources. Having your transactions processed through multiple payment gateways deprives you of a comprehensive view of your performance. It leads to the need for manual systematisation and analysis of all that data and payment information across payment systems.
- Effort- and time-consuming reconciliation. The more gateways and merchant accounts you have, the more manual work and time you'll need for reconciling, and the more errors can be made.
How to avoid the pitfalls?
Corefy is a payment orchestration platform that helps merchants to integrate multiple payment gateways, avoiding most of the drawbacks mentioned above. We establish connections with APIs of payment providers and acquirers globally and ensure their security, integrity, and stability. A single integration with our platform gets you online with more than 250 providers. We provide you with a scalable technical infrastructure, building connections and maintaining them for you.