Ask every online payment provider these questions

What should merchants look for when it comes to selecting a payment provider for e-commerce?

The ability to accept and optimize online payments has become a critical capability for merchants in every e-commerce sector. 


Merchants today can choose from a wide range of providers offering payment solutions to address the key needs of e-commerce businesses.


But what should merchants look for when selecting a payment provider? Which basic capabilities are most essential when it comes to online payments – and which advanced features can help merchants to capture hidden payment value while maximizing e-commerce revenue?


Here’s a comprehensive list of questions online merchants should consider asking prospective payment providers to see whether they’re a good match for your business.



Table of contents:

22 Questions Merchants Should Ask Every Online Payment Provider

I. Company

II. Platform capabilities

III. Payment security

IV. Service

V. Pricing

VI. Future growth


The most important questions to ask a payment solution provider PayU

22 Questions Merchants Should Ask Every Online Payment Provider

I. Company

1. How long has the payment provider been in business?

The payment landscape is constantly evolving – but don’t get lured by low fees from a newbie without doing your homework.  With each attempted payment representing a potential customer and real revenue for your online business, merchants should avoid making compromises when it comes to the quality of payments service you will offer to customers. If the provider has been around for less than two years, consider waiting until they prove themselves before making a leap of faith.



2. Does the company operate internationally and support the countries and currencies where you do business?

Some payment gateways only support transactions in specific countries or currencies. That’s why it’s a good idea to choose a provider that supports the locations and currencies where you expect to do business – or better yet, one that has the capability to scale with your business by supporting payments in any country. A payments platform with access to multiple acquirers and providers gives you an operational advantage and also allows for the opportunity to route transactions based on geo-location. You can even carry out A/B split tests to determine which has higher acceptance rates based on key criteria relevant to your business.



3. Can the provider share references from actual customers?

Talking to a few existing customers is a smart move before signing with a new payment provider on the dotted line. Checking a new payment provider’s customer references helps to ensure that the provider can be expected to deliver on the payment solutions they promise and that they will be responsive if any incidents occur.

II. Platform capabilities  

4. Which payment methods does the provider support?

Payment methods coverage is a key aspect to consider when choosing the right payment provider for your business. Today the capability to offer a wide range of global and local online payment methods has become a key aspect of localization and meeting customers where they are. The right payment provider should ideally be able to offer a broad scope of payment methods to suit the needs and preferences of customers in any market.



5. Which payment optimization features does the provider offer?

Check if the company has any features that help merchants achieve higher approval rates and optimize payment traffic. While the topic of payment approval rates may seem mundane, a small change in the percentage of accepted payments can represent tens or even hundreds of thousands of dollars worth of revenue depending on the size of your business.


Here are a few examples of payment optimization features to look out for, which can help you get more out of your payments:


  • Smart payment routing. This feature allows merchants to optimize payment traffic by creating custom rules that direct payments via different processing providers depending on a set of pre-determined criteria. A good routing engine will allow you to optimize for a variety of criteria, such as minimizing fees, maximizing approval rates, or limiting false declines.


  • Instant retry. With this feature, merchants can automatically “retry” declined payments using another provider, in order to recover lost revenue.


  • Advanced analytics. Having a centralized dashboard allows merchants to track KPIs and get a better idea of the opportunities for optimizing payments, as well as the impact of payment traffic on the bottom line.


6. How granular is the provider’s error fidelity?

​​Error fidelity is a measure of how precise transaction decline messages are. Transactions can fail for many different reasons, so it’s important that when your payment gateway declines a transaction, the decline message offers enough detail that you can fix it in the future (or in the best case scenario, that the customer can try again using another payment method). You can increase the likelihood of successful payment collection by customizing the collection attempts based on the exact decline reason.




7. Does the payment provider’s platform process chargebacks smoothly?

Chargebacks are a common element in the life of every retail business. Make sure that the provider can process them automatically for the smallest possible fee. 




8. How advanced are the provider’s reporting and reconciliation capabilities?

A good payment platform should be able to provide a combination of standardized and customized reporting options that can help you to gain a real-time overview of your payments and their impact on your business.


Here are a few examples of how good payment reporting can make a difference:


  • If you’re a subscription business, you ​​depend on information from multiple sources, including external parties like payment gateways, banks, and credit card companies. To run your business smoothly or tell a compelling story to investors, you need to understand how this information is generated. 


  • Some businesses rely on reports from payment gateways, while others hire specialized internal staff who prepare reports using raw data from the gateway. If you know that you need more advanced reporting tools, ensure that the platform you pick can provide you with that – and be sure to ask at what cost.


  • Do your payment reports allow for non-standard or customized reporting? Are there any additional fees or other considerations for creating or receiving non-standard reports? The ability to run custom reports is an important part of any payment platform’s reporting capability.


  • How are the reports accessed – via download or on-demand? And how often can you generate them? If reports are difficult to generate, your reporting processes will be affected.


  • Does the provider offer tools to search and find items? For example, duplicate or missing transactions? Straightforward methods for finding data improve the reconciliation process.


9. What does the payment provider offer in terms of credit card portability?

You may want or need to switch to a different payment gateway provider at some point in the future. 


To help prepare for this change, find out what tools or support the provider offers to import and export customer and credit card information. You should also determine if there are fees involved in this process and how long it will take. 


Whenever a business decides to change gateways, they’ll need to export their credit card data from their old gateway. Since this information is sensitive, payment gateways can be resistant to exporting the data. It can take months to schedule and cost a lot in professional services fees. You may lose access to legacy data and you might need to reconfigure your subscriber data.


10. Can the provider help with tax compliance?

Tax compliance is another important area to consider when picking the payment gateway. Tax rules and regulations can be very complicated and may differ by jurisdiction. Some countries also charge taxes on sales or purchases that other countries may not. Be sure to find a payment gateway that has local expertise and is familiar with the tax rules in all the areas in which you plan to do business. 



11. How does the provider improve customer experience?

While payment approval rates refer to the percentage of accepted payments after the point of conversion, a good payment provider can also help to shepherd customers through the checkout experience. Many payment gateways include features to help merchants boost the customer experience and increase checkout conversion rates.


Merchants looking for ways to reduce cart abandonments can start with optimizing their checkout experience. According to the Baymard Institute’s yearly report on cart abandonments, nearly 20% of consumers abandon their shopping carts because of an overly long or complicated checkout process.


Find out whether your prospective payment provider can support a checkout experience that suits your business and most importantly the needs of your customers. A high-quality platform may offer out-of-the-box templates for the payment page and should constantly be improving them from a UX perspective to provide the best customer experience.


Don’t forget to ask about mobile optimization. Is the payment provider flexible enough to support the solutions you are looking for? The company may not allow full customization, but if it requires you to have software developers writing code, that might not suit you.



12. Does the provider offer a payment switch option?

One payment feature which can help to improve the checkout experience and enhance conversions is the ability for the payment gateway to “switch” payment providers depending on the transaction.


Payment switch functionality facilitates the communication between different payment providers at both the front and back end of a transaction. It can be used to offer customers a larger selection of local payment methods in different regions, while at the same time allowing for more efficient routing and transaction processing after the customer has already completed checkout.


A payment gateway offering payment switch allows for merchants to connect to a wide range of payment providers and payment methods using one global integration. 

Graphic showing payment switch functionality available through PayU payment solution

III. Payment Security

13. Is the payment platform secure and compliant with PCI and other standards?

An ideal payment platform should always support security features such as authentication, authorization, tokenization, and SSL. The payment provider should also be compliant with PCI DSS and other relevant industry standards. The best payment solution providers also offer the capability to reduce your PCI scope as a merchant, by encrypting user payment data and transferring the task of safeguarding it away from the merchant.



14. What risk management tools does the provider offer?

Learn how your potential payment service provider monitors and manages risk. Check what measures they take to help you avoid financial and reputational damage when dealing with payment transactions such as fraudulent activity or payment errors. Take a look at how they handle user data and what their commitments are regarding data privacy and security.



15. Does the provider offer fraud management features?

Fighting fraud is a constant challenge for merchants. While the right payment gateway should provide you with payment security tools to help prevent fraud, merchants should be on the lookout for a handful of key features:


  • What tools does the provider offer to identify and prevent fraud? These may be third-party or in-house tools.


  • Does the payment gateway provide benchmarks for industry, company size, and company type? This data lets you check your incidence of fraud against similar companies to know if your fraud levels should be of concern.


  • How closely will the provider work with you to implement best practices for preventing fraud? The more assistance and expertise a payment gateway can provide, the more valuable their service.

IV. Service

16. Does the payment provider support new payment methods?

The world of payments is fast-moving, with new payment methods continually emerging and changing the status quo. When selecting a payment gateway, consider if the gateway supports all the payment methods you need, while keeping an eye on the latest industry trends (such as the emergence of Buy Now, Pay Later and other alternative payment methods).



17. Does the provider’s platform integrate with popular e-commerce software?

Most payment providers have plugins for different e-commerce platforms like Shopify, Magento, Wix, and others. Check this to make sure that the payment gateway works with your shopping cart and can even provide custom integrations if needed.



18. What is the onboarding experience like?

Look for a provider that has quick onboarding and offers sufficient support during the entire process – for example, a dedicated representative who can oversee the integration process and help to train your team. A good payment platform can differentiate itself with the quality of its onboarding.



19. Does the provider provide good customer support?

Payment problems will inevitably arise sometimes – from duplicate transactions to unusually high transaction decline rates. These issues can slow down a business, but skilled customer support can help. Support staff can work together with your team to help rectify any problems before they escalate.


Some issues that prevent payments from going through can be addressed by the business, while others can only be fixed by the payment gateway. An ideal payment gateway should be willing and able to work together with your business to address any payment issues and ensure that problems do not spiral out of control.


Payment gateway providers can vary in the level of support they offer, so be sure to take your specific requirements into account when selecting the best payment partner. Try to ascertain how quickly the payment gateway’s customer service team can be expected to respond to inquiries, and what their processes are for resolving issues.



20. Can the provider guarantee availability and performance?

E-commerce is always on, which means your payments platform also needs to be. One of the worst things for any online business to imagine is a payment platform that cannot accept payments.


At the same time, slow performance of your payment software can be expected to increase the cart abandonment rate and lower customer satisfaction.


Make sure that none of these scenarios occur with your payment provider by asking the company about performance, uptime, and disaster recovery plans in the event of any outages.

V. Pricing

21. What does the service cost? What additional fees does the provider impose?

Ask various payment providers for a quote based on the fees they’d charge you for using their services.


Price is an important factor, but don’t forget about the quality of service. Note that different payment providers have different fee structures, so pay attention to how they’ll be applied to your business and its transaction volume. Consider factors like the payment gateway’s transaction fees and currency conversion rates, as well as customer support and transaction authorization speeds.


Make sure any provider you’re considering offers clear and understandable pricing models in order to avoid hidden costs. Find out if providers offer special terms or discounts for certain industries. Lastly, consider your business goals and, most importantly, find out how quickly you’ll be paid out after a sale is made.


Here are a handful of fees to keep an eye out for:

  • ​​Set-up fees
  • Transactional fees
  • Minimum/maximum transaction thresholds
  • Chargebacks
  • Dispute management fees
  • Currency conversion rates
  • Early termination of contract charges
  • POS terminals (if you have a brick-and-mortar store)



VI. Future growth

22. How well can the payment provider support your growth?

One thing to note about choosing a payment gateway is what your relationship with the payment provider will look like over the long term.


Learn what guidance the company may offer around expanding into new countries, accepting new types of payment methods, support with navigating the local business and regulatory environment, and other important payment issues or opportunities.


As your business grows, you’re likely to see more transactions. If you’re expecting huge increases to your processing volume, check how this might impact your fees and if the payment gateway offers different fee structures for higher volumes.

How PayU payment solutions can help your business grow


Today’s e-commerce landscape is full of more global opportunities than ever before. In order to capitalize, merchants must manage global payment transactions in a way that accounts for local preferences and complexity while at the same time maintaining high security standards and maximizing efficiency.


With a maze of interconnected players characterizing the payment landscape at both the global and local level, staying on top of local payment relationships, requirements, and customer preferences can be challenging. That’s where having the right payment provider can make a big difference.


In searching for a global payment solution, online merchants should be aware of all of the ways that payments can impact the bottom line – while looking for a trusted partner who can simplify the complexity of global payments, and help to deliver success.