April 6, 2020

How to Build Payment Features That Create a Seamless User Experience While Minimizing Expenses

Established tech companies understand that the best products and features are often virtually invisible to the customer, and this is especially true with payment integrations. When you’re dealing with people’s money, you want to be as reliable and discreet as a Swiss banker. But customers also expect transparency and feedback, and a well-integrated payment gateway delivers both in the form of a seamless and reliable payment process. Building payment features into your platform demands that you see them not as mere utilities but as bona fide opportunities for customer experience.

With that end in mind, this post will walk you through four keys for integrating payment gateways into your platform in such a way that it builds customer trust while also streamlining your payment processing infrastructure. Achieving this means choosing payment platforms that are well-suited to your business, minimizing your per-transaction expenses without sacrificing stability and reliability, taking advantage of value-added services available from many payment platforms, and engineering your internal systems and processes to cover potential gaps between the payment feature and your existing platform.

4 Critical Steps for Integrating Pay Features into Your Platform

1. Identify the types of payments best suited to your platform and business objectives.

Not every payment integration will be a good fit for your platform. Especially with mobile payment platforms, you’ll need to sort through a long list of options to find the tool that does exactly what you need. For example, Apple Pay and Apple’s in-app purchases are both potentially powerful tools for streamlining payments and retaining customers, but they process payments much differently, with distinct fee structures and rules for use, and they can’t each be used for every type of product or transaction. International payments are another potential difference-maker because some tools don’t support them (and some businesses don’t need them).

While an “all-of-the-above” approach may seem like a customer-friendly choice, too many payment integrations will mean significantly more administrative and operational complexity. Remember that bugs love needlessly complex systems, and one more redundant payment integration is one more opportunity for a missed payment or double charge.

2. Minimize expenses per transaction (but not at the expense of reliability).

Here again, your best option depends on the nature of your business. At first blush, it may not seem to make a difference whether you charge customers through credit cards, ACH (bank transfers), or both. But these methods charge you differently and process payments in distinct ways that could have big implications for your profits or overhead. ACH will typically charge you a flat fee per transaction instead of a percentage of the charge like a credit card transaction, so ACH is typically preferable for high-dollar transactions. But credit cards can offer immediate payment authorization, whereas ACH payments take several days to fully process. That processing delay may or may not be important to you—if you bill in arrears, for example, you have already built your business model to accommodate it. Ticketmaster, by contrast, is a good example of a business with a clear preference for credit cards (they don’t accept ACH), since they need to able to verify payments immediately or risk outrage from the buyers and sellers in their marketplace who are exchanging goods with very short shelf-lives.

ACH vs. credit cards is just one example of the cost considerations you must make when integrating payment tools. If your business relies on a high volume of microtransactions, neither credits cards (high fee) nor ACH (delayed authorization) is a viable option. Even in-app purchases charge you commissions that can take a big bite out of revenue. Digital wallets can defray some of the costs for frequent small transactions by requiring a minimum contribution to the wallet and deducting purchases from a balance that has already been hit with a credit card fee.

3. Consider value-added services that really do add value.

Payment platforms have been stepping up their game in the realm of security and fraud prevention in particular. We don’t need to be reminded of the long list of companies, including more than one digital security firm, who have lost money and goodwill to data breaches. Even so, not every payment platform that claims to offer payment security has equally robust security. If you can offer your customers CAPTCHA and 2-step verification as part of a smooth, unified payment experience, you may be willing to pay a bit more per transaction to a payment gateway with a proven security track record.

Some payment platforms can also offer strong analytics and reporting capability. Others enable you to process transactions through a variety of merchant accounts, optimizing for lower fees, reduced risk, or increased leverage. Of course, every feature adds a layer of complexity, and some services don’t scale well for smaller businesses. As with everything else in your business, you must judge the value you get from these services against the investment required to extract that value.

4. Build your own infrastructure to maximize uptime.

As good as these payment gateways can be, they will never simply run themselves. An all-too-common mistake is trying to integrate payment tools without adequate internal staff to support them. Remember that sensible architecture assumes failure. As a cultural value, you should think of every fix that requires the Ops Team as a bug. Especially when you’re dealing with payments, resolving discrepancies after the customer reports them is not enough to restore their trust.

Consider a common failure for credit card transactions: the customer pays with their card, and their payment goes through to the processor, but for any number of reasons that may have nothing to do with you, they find themselves at an error screen. Assuming the transaction failed, they pay again. Up to this point, there may be nothing your team could have done to prevent the double payment. If you are relying on customers to see the double charge on their monthly statement three weeks later and call you about it, you may not regain their confidence even if you are able to refund the second charge while you still have them on the phone. But if, instead, you have designed a reporting system to periodically query the payment processor and identify payment errors mere minutes after they happen, you have created an opportunity to gain customer trust by fixing the error before they know it has occurred.

Like every aspect of your business, integrating online payments is an opportunity to improve the experience you provide to your customers. Payment gateways aren’t just utilities to facilitate your sales, they are a critical part of the sale itself. Especially in a digital marketplace where consumers are spoiled for choice, a clumsy or unreliable payment experience is more than enough to drive them into the arms of your competitors. You must be sensitive to costs, of course, but you must also be willing and able to tailor your payment integration to the specific needs of your business by choosing the right types of payments to accept, minimizing per-transaction expenses, taking advantage of additional services that provide good value, and in some cases investing in your own payment processing infrastructure.

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