How to Automate Your PCI Compliance

Once your subscription business is off the ground, you’d probably like to get paid for the service or product you’re providing. To do that, you’ll need a payment gateway – and choosing which one is one of the most critical decisions you can make. (In fact, we recommend that you set up more than one, but we’ll talk more about that later.)

Or perhaps your current payment gateway isn’t cutting it, and you’re looking for a new solution. What should you look for when selecting a payment gateway? What is a payment gateway, actually? Why are they important? How can you set them up so that you can process payments without any interruption to your business? Read on to find out the answers.

What is a payment gateway?

Payment gateways are the go-between in the online transaction process between the buyer and seller. A payment gateway makes it easy for a customer to securely pay for a product on your website using a debit or credit card.

When someone buys something online, they typically enter their credit card information. The data that’s transmitted gets encrypted by the payment gateway, which communicates with the payment processor, which relays that information to the merchant account.

Aren’t payment gateways and merchant accounts the same thing?

Nope! A merchant account is where from your customer’s account after the transaction has occurred. It’s important to note that merchant accounts aren’t the same thing as your business bank account, either. Payments usually go to the merchant account before they hit your business bank account.

Do I need a payment gateway?

The simple answer is yes. A payment gateway is how you get paid when someone initiates a transaction on your website. Though there are many to choose from, there are a few factors you’ll want to consider when picking the payment gateways you’ll make available to customers on your website.

And actually, you need more than one payment gateway. The reason why is simple: If, for whatever reason, your sole payment gateway stops working, another payment gateway option allows customers to complete their transactions without any hassle. Best of all, you don’t lose a sale due to a technical issue. It’s win-win for everyone. (This is why Rebilly supports 199+ payment gateways and counting — so you have all the options you need to protect yourself and your business.)

What factors do I need to consider when choosing a payment gateway?

Choosing a payment gateway is a decision you’ll want to make carefully. The features of a payment gateway can affect your customers and your profitability. Here are the top 8 questions to ask when evaluating a payment gateway:

Question one: Modern or classic?

Modern gateways, like PayPal and Stripe, make for an easy process to get you up and running – and often don’t require having a merchant account since the modern gateway acts as an all-in-one system. Modern gateways, being more all-inclusive, will typically have higher fees compared to classic gateways.

Classic gateways, like WorldPay, take a bit longer to set up, and require both a separate merchant account and more technical knowledge. They will comparatively lower fees, but you’ll likely have fees associated with a separate merchant account.

Question two: Hosted or integrated?

Do you want customers to be able to complete payment on your website, or get redirected to your hosted gateway website? Hosted gateways offer the opportunity for more security, but it may affect your conversion rate if people have to leave your website to pay.

Question three: Level of security?

With data breaches everywhere you look, payment security is a huge factor. How secure your gateway is could be the difference between making a sale or not. If your website payment method isn’t secure, some customers will avoid it completely because they’ll be nervous about entering their card data.

Question four: Payment methods accepted?

People still pay with credit and debit cards when making online purchases, but you might want to ensure that your payment gateway accepts other forms of payment, like digital wallets or bitcoin. Are you a global company? Then you also need to consider what sort of currencies you’ll accept.

Question five: What fees are involved?

It’s difficult to find a gateway that doesn’t have fees. Some gateways charge a fee per transaction, while others charge a monthly flat fee. You’ll also encounter additional fees for chargebacks or refunds. Depending on what type of service you offer, those fees can add up. Do your research and make sure that you won’t lose money on associated fees.

Question six: What contracts and/or service agreements are required?

If you have a contract or service agreement with your gateway payment provider, be sure to read the fine print. You might need to meet a certain number of transactions to qualify for a payment rate.

Question seven: Can you view customer data?

If you rely on your payment gateway for user data for financial review, this would be a good feature to have. In general, the more customer data you can track, the better.

Question eight: Does the gateway offer fraud detection and prevention?

This added layer of protection helps you as the seller, so you don’t lose money to fraudulent transactions.

Where does subscription billing software come into all of this?

You might think that your billing software and payment gateway are similar mechanisms, but billing software helps you stay organized, automates some of the recurring billing processes, and can offer gateway integrations. Payment gateways are not one-size-fits-all and don’t always do what you need them to do. Using a billing software can help route payments, restrict certain customers, simplify foreign currency transactions, and more.

After you’ve got all the credit card info and want to arrange recurring payments for your subscriptions, subscription billing software allows you to set up payment plans and pricing formulas (flat, tiered, stair-step, etc.). Your customers will be able to check out through the software, and you’ll have options for viewing customer data as you see fit.

Subscription billing software can also help keep your card-data current, which becomes vital in the event that a card expires. If it offers Account Updater features, subscription billing software can automatically try and update the card data for you—before you lose the recurring revenue.

To recap

Payment gateways are an important part of your subscription business. Without them, there’s no way for buyer and seller transactions to occur. When choosing a payment gateway, factors such as security, integration, payment methods, and fees (among others) should be top-of-mind to avoid problems in your billing.

Don’t forget to make sure that you have more than one option available. That way, you can avoid interruptions to your payments and keeps customers happy.

Now that you know what to look for in a payment gateway, find out what you should look for in your subscription billing tool. Download our Six Must Haves guide to get a list of the must-haves (and why they matter), plus a bonus three-page feature checklist. Get it for free below: