Payment speed is as important as price for many e-retailers.
When choosing a payment gateway to handle online credit and debit card transactions, many e-retailers focus on the cost to process each transaction. But, another factor, how quickly the e-retailer receives its money from those transactions, is often just as important, say experts.
Payment gateways send online credit and debit card transactions made on an e-commerce site to multiple payment processors. A merchant receives its money following the payment processing in a step known as settlement.
Transaction pricing and settlement speed were top considerations for Eddie Shomer, chief financial officer at Blu Sand LLC, when he had to choose a new payment gateway. Blu Sand operates BleachSafe.com, a site that sells bleach-resistant towels to hotels.
Shomer recognized that speed was important for BleachSafe.com after he saw one of the retailer’s previous gateways taking as long as seven days to settle transactions. And that, he says, put a dent in the company’s cash flow. While the gateway eventually improved, it still took 48 to 72 hours to put the money in the company’s bank account.
Now Blu Sand works with HSBC, which offers a payment gateway service through its relationship with Global Payments Inc., a payment processor. Blu Sand now gets its money the next day, Shomer says.
Service also counts when evaluating a payment gateway service. Global Payments sends Shomer reports on authorized and declined transactions. Information on declined transactions helps Shomer understand why those sales did not go through; a common reason is a consumer’s shipping and billing addresses not matching up, he says.
Shomer’s advice for other e-retailers is simple. “Don’t be afraid to talk to your bank—as long as the price is right.”