Gateways to Success Online

Online Gateways 

Chances are, you're already selling your products or services online. Even if your business isn't doing what you would call ecommerce or running a web based shopping site, if you are requesting customers to pay you with a credit or debit card for transactions when they are not in person, or the card is not present - then the payment should be processed online.


Typical hosted payment screen
Merchant payment gateway admin virtual terminal

Some examples might be:

  • Accepting payments over the phone
  • Sending email invoices with a "Pay Now" link
  • Signing up for online subscriptions, eg. radio, TV, gaming
  • Memberships like gym clubs, golfing or business associations
  • Billing for professional services like Bookkeeping, Accounting
  • Access for premium web content
  • Service Contracts - Home maintenance, Cleaning services
  • Hourly billing - Lawyers, Tax Consultants
  • Recurring billing for any B2B or B2C service
  • Ecommerce shopping carts and web stores.

Payments 101 - What is a payment gateway?

An online payment gateway is the software technology layer that links your customer’s financial institution to yours when processing a payment. Think of it as the smart virtual version of the countertop POS payment terminals used by almost every retail business worldwide. Most gateways are accessed via a web based portal with no sofware download necessary or a simple ecommerce plugin. The best gateways are bank agnostic allowing them to plug into virtually any merchant account and acquiring banks within North America.

"...many popular payment gateways block or limit the ability to connect to an existing business merchant account and instead charge high flat rate fees processed directly by their own banking institution. This maximizes their profit at your expense and limits your choice of solutions as a merchant.

Smarter Payments
The Canadian Bank Interchange Rate costs are set by the credit card issuing banks and card brands (Visa, Mastercard this example). Interchange costs are the same for all payment processors in Canada. Similarly with the assessment charged by Visa and Mastercard as a brand royalty fee - this is the same for all processors. The above chart shows how flat rate processors at 2.9% charge much more than the majority of merchant card service providers in Canada who normally use a cost plus simple processing fee formula.

Choosing an Online Payment Gateway

Here are some of the most common online payment gateways used by merchants:

  • Bambora
  • Paypal
  • Square
  • Amazon Pay
  • Authorize.net
  • Shopify
  • Wave
  • Converge
  • Quickbooks
  • Apple Pay
  • Stripe

Locally, more than 80% of my customers are using an online payment gateway in addition to in store POS systems and smart payment terminals. More than half use an online payment gateway exclusively. A Smarter Payments solution powered by Paystone doesn't limit your choice of gateways. A business doesn't have to be locked into look alike, all-in-one ecommerce shopping cart templates or inflexible invoicing systems that charge high flat rates. All of our plans have affordable interchange cost plus rates with multiple choices of ecommerce integration and virtual invoicing.

With our solutions, your business can have access to multiple gateway billing methods to make transactions easier for your customers - All Major Credit Cards, Interac Debit Online, Electronic Funds Transfer, and custom e-Invoicing.

We recommend only the most reliable and PCI secure payment platforms. Our core offerings include three of the top gateways worldwide: Find out more here.

Bambora Worldline - Authorize.net - Converge

Exposing the Myth About Flat Rate Pricing

In the last two years especially, large corporate all-in-one, ecommerce and online payment platforms have have aggressively pushed the premise that a flat rate credit card payment processing fee of 2.9% + 30 cents per transaction is a cheaper and simpler way of doing business online. Many are bundling in low cost hosted web apps and SaaS services "free" included with that 2.9% flat rate. Well as the old saying goes,

"TANSTAAFL: There Ain't No Such Thing As A Free Lunch".

Robert Heinlein

Why 2.9%?

Here's a list a few of the more popular flat rate platforms: Paypal, Shopify, Square, Stripe, Wave, and Quickbooks. Their flat rates range from 2.7% to 3.5% per transaction, and all charge a 30 cent per transaction fee. Some charge monthly fees ranging from around $10 per month to $79 per month.

The main reason for the 2.9% average flat rate fee is competitive and goes back to bell-weather rates set by pioneers in online payments like Paypal. It has nothing to do with the actual cost of the various credit card brands and premium card categories. These are much lower and, in Canada, rates are public knowledge and published online by the card brands like Visa and Mastercard. Those rates range from 0.80% to 2.5% - See for yourself: check Visa here and Mastercard here. The rates are set by the card issuing banks and card brands. These rates are not set by the merchant service providers or credit card processing companies.

As a matter of fact, all of these rates and the rules for credit and debit cards are federally regulated in Canada by the Financial Consumer Agency and all payment processors must abide by the federal Code of Conduct for the Credit and Debit Card Industry in Canada, including fee transparency. By law, there can be no "hidden fees".

Flate rate "all-in-ones" like Paypal, Shopify, Square and the others bundle all the allowable card fees and some services into a single flat rate like 2.9%. It is a very profitable price point for them because it is tied to your total card sales as a merchant. The more you sell, the more profit they reap from their services. Is a simple web site template or hosted service really worth $500 to $1000 extra per month (or even much more)? That seems like a much different scale of "hidden cost" for merchants to bear.

A typical merchant account processing fee should average 0.40% plus 5 to 10 cents per transaction. (or lower based on transaction volume).Your monthly effective total cost plus rate (EFR) should average 2% or less. See how much this adds up in the chart below - even for quite conservative monthly credit card sales volumes a standard merchant account will save your business significantly and help keep your profit working for you.

A payment gateway solution from SmarterPayments.ca is the best way to reduce credit card processing fees versus all-in-one flat rate plans.

Find out more about the smarter way to accept credit cards online with our popular Online Payment Gateways.

Questions? Reach out to us here anytime - smarterpayments.ca - Talk to you soon!

Top Five Key Features of eCommerce Platforms

What to look for when you choose an eCommerce platform and how to know it’s time to change the one you started with.

Be ready

E-Commerce as a channel represent 25% of the entire retail marketplace. It’s more important than ever for your small business to be engaged in online ecommerce sales to remain competitive. Here’s the top takeaways from the industry leaders at Adobe Commerce – Magento:

#1 Is it Cloud-based and Hosted?

Whether you are just starting out or already have an eCommerce presence, choose an online solution that runs in the cloud to reduce hardware costs and improve data security.
Benefits – Cloud costs less – Scales up easily – Managed IT – Hosted Websites

Optimize your checkout process

#2 Flexible Designs and Order Flow

Don’t get locked into pre-built or canned templates. Customization can be costly or not available at all on some plug-and-play platforms. As your business grows, those canned WYSIWYG solutions will get you left behind. Most won’t let you modify the code. Even hiring local developers to do it for you won’t be an option. Look for flexibility and full scope of features.
Benefits – Save on Do-Over costs – Plan for growth – Be ready for change.

#3 Omni Channel and Hybrid

A good ecommerce solution should support multiple channels. Most Brick-and-Mortar stores have gone digital during the pandemic. And many online brands are teaming up with in person retail. More than 80% of smartphone users check their phones before they buy in store. Omni channel and hybrid solutions give your customers a common experience. Other overlooked channels are orders and payments over the phone, deposits, pre-authorizations, payment plans and e-invoicing.
Benefits – Sync inventory levels – Accept payments anywhere – Customer centric

#4 Integration and inter-operability

The best platform should play nicely with others. Look for integration with solutions you are already using: CMS, CRM, ERP, bookkeeping & accounting, invoicing, merchant payments, loyalty and gift programs. Look for the capability of adding plug-ins, extensions or open access to API’s.
Benefits – Reduce the time spent syncing business systems – make reconciliation a breeze.

#5 How many developers support the ecommerce platform?

Bigger is not always better. Many ecommerce platform providers, quite frankly, only want to profit from a high 2.9% flat rate processing fee. When you make more money, they take a bigger cut. They spend more money on their own social media marketing than product development. The more important question to ask is how open is your platform development? As your business evolves can you transition from do-it-yourself to hiring local expert developers who come highly recommended? Shy away from platforms that lock you into their all-in-one solution.
Benefits – Lower support costs – Local business expert support – Longer product lifecycle.

This blog post was adapted from the Adobe-Magento Commerce article “Six Must-Haves for a Fast, Flexible eCommerce Platform”. You can request a copy of the full article PDF below. About Adobe – Magento Commerce, part of Adobe Experience Cloud, is a leading provider of cloud commerce innovation to merchants and brands across B2C and B2B industries. Magento Commerce is the #1 provider to the internet retailer Top 1000. Visit Adobe Canada.

Contact us today. Smarter Payments can help you with selecting a popular ecommerce platform like Adobe Commerce – Magento. Out of the box, it supports our most widely deployed online payment gateway: Authorize.net (a Visa Company). This gives you access to the lowest possible interchange cost plus processing fees – a huge savings over all-in-ones like Shopify, Stripe or Square.

And here’s to a successful re- opening!


~ Andy - SmarterPayments.ca


Upping the Game on Your Restaurant Online Ordering

Find out how this recommended online ordering platform helped Copper Branch. The 100% plant-based restaurant chain saw a 26% year over year growth.

“Working with UEAT, we’re able to offer a digital, online experience that really makes, the ultimate customer experience.” - Andrew Infantino, Marketing Director at Copper Branch

 

UEAT Presents : Copper Branch from UEAT Technologies on Vimeo.

This platform is not just for large restaurant chains. I have several small local clients who have rolled it out at their single location.


cheers!
~
Andy

Phoneworthy - The Fintech Blog

Welcome back to the Phoneworthy blog. Thanks for your patience. I'll be starting regular posts this week with a focus on fintech in the payments industry as well as other technologies which help small businesses thrive and improve profitability. You can connect with me on Twitter @phoneworthy or the Smarter Payments blog to find out more about my own company which services Canadian small business owners in southern Ontario. 

I welcome your comments and questions about fintech. 

Cheers!

Andy



fin·tech

/ˈfinˌtek/ noun

computer programs and other technology used to support or enable banking and financial services.

"fintech is one of the fastest-growing areas for venture capitalists"

Definitions from Oxford Languages


From Wikipedia - After reviewing more than 200 scientific papers citing the term "fintech," a study on the definition of fintech concluded that "fintech is a new financial industry that applies technology to improve financial activities." Fintech is the new applications, processes, products, or business models in the financial services industry, composed of one or more complementary financial services and provided as an end-to-end process via the Internet. Fintech can also be considered as “any innovative ideas that improve financial service processes by proposing technology solutions according to different business situations, while the ideas could also lead to new business models or even new businesses.

This is Phone Worthy

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You can visit Phoneworthy on Twitter or the Smarter Payments blog for his dayjob to find out what's new.

Gateways to Success Online

Online Gateways  Chances are, you're already selling your products or services online. Even if your business isn't doing what you wo...