15 Important Factors To Consider When Evaluating Payment Gateways

As all businesses are built differently, they will naturally have different requirements. Ask yourself this question: How will my chosen payment gateway benefit my business?

ultimate guide to evaluate payment gateway - xanpay blog

Did you know that in 2020, a whopping 44.5% of all online transactions were made with digital and mobile wallet payments?

But wait, there's more!

Another study revealed that this number is set to rise to 50% by 2024 - meaning that if you're looking to go cashless, there's no better time than now.

With a fast-growing market for e-commerce businesses and rising internet penetration, it's clear that there are plenty of growth opportunities.

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What Is A Payment Gateway, and Why Does It Matter?

Simply put, payment gateways facilitate the payment process between a merchant and their customer; this, in turn, allows customers to transfer funds via credit/debit cards, bank transfers, or digital wallets.

Hence, making it possible to perform transactions without cash or remotely over the internet. And due to the rise of COVID and e-commerce businesses, payment gateways have only become more popular.

But of course, choosing the right payment gateway can be tricky even under the best of times. And that's why we're going to show you how you can choose the best payment gateway for your business, beginning with:

15 factors to consider when evaluating payment gateways
XanPay - 15 factors you need to evaluate payment gateway
1. Time-to-Market

Remember: the faster you get your payment gateway up and running, the faster you can start serving customers.

Ideally, your payment gateway of choice should be up-and-running out of the box and quickly integrated into your business. That way, you’re up and ready within just a few days with minimal delays and ready to accept payments.

And in today’s fast-paced world, such agility is probably the only way businesses can stay ahead of their competitors.

2. Setup Costs, Service Charges, and Hidden Charges

Hidden costs are one of the most important things you should consider when choosing a payment gateway. Payment gateways utilize various methods to profit off their customers, from setup costs to service charges.

But this doesn't mean you should forget about using a payment gateway.

Far from it, in fact. Given the competitive nature of the fintech sector, there are plenty of platforms that offer different benefits.

For example, where credit cards usually charge fixed setup and annual fees, a system like XanPay does not incur such expenses. And better yet, with XanPay, users are only charged with only one fee.

3. Watch My Back: Is Your Chosen Payment Gateway Secure?

Naturally, security had become a significant concern given the popularity of cashless payments and e-commerce businesses.

While e-commerce has been a boon for businesses everywhere, it has also led to a rise in cybercrime and data theft. Hence, as a business owner, you'll want to ensure that you protect your customers at all times.

In Malaysia, for example, scammers have begun targeting online shoppers to steal personal information and credit card details. This is why your payment gateway must be secure with solid safety measures such as secure encryption and two-factor authentication with email and phone verification.

Should your payment gateway suffer a security breach, the financial and legal consequences could be devastating. All the more reason why compliance with auditor-approved security policies, processes, and procedures is essential for ensuring data and end-point security.

4. Are There Any Currency Conversion Fees?

If your business regularly deals with overseas customers, chances are you regularly deal in large quantities of foreign currency. While this is all fine and dandy, the trouble starts when it's time to convert your forex holdings back to your home currency.

Frequently, payment gateways charge significantly higher exchange rates than which is quoted on the market - meaning that you'll end up receiving less than what you should get. Meanwhile, other gateways may provide favorable rates at the cost of pricey conversion fees.

In the long-term, all of this will erode your profit margin and cause you to lose the competitive advantage. When you're on the lookout for the right payment gateway, always compare exchange rates and conversion fees.

5. What Type of Currencies Are Supported?

Building on our previous point, it's also important to know what type of currencies your payment gateway supports.

While the US Dollar (USD) is the medium of exchange for most international transactions, it's good to provide your customers with as many payment options as possible.

After all, your customer may live in a country where access to foreign currency is limited or be subject to steep exchange rates.

6. Ask About Chargebacks

While many regard chargebacks as the cost of business, did you know that payment gateways have different policies?

That's right, and the way your payment gateway handles chargebacks can hurt your business.

If you're in a sector such as adult entertainment, you may find yourself subject to some somewhat discriminatory regulations. For example, adult entertainment and gaming sites are usually more prone to chargebacks than other businesses.

Not only are unfair chargebacks annoying, but they also incur unneeded costs for your business.

So, what if we removed credit cards from the transaction entirely? Wouldn't that solve the problem of chargebacks and eliminate the risk of credit card fraud?

The answer is a definite yes.

With XanPay, your customers now have the freedom to use popular alternative payment methods in their home country. From DuitNow in Malaysia to PayID in Australia, XanPay allows you to tap into various new and exciting markets across Asia.

7. Refund Process

While refunds can be disheartening, they are also an excellent opportunity to build customer loyalty.

And here's why: a 2021 study by Klarna revealed that 84% of customers would "turn their back on a retailer after a bad returns experience."

Thus, businesses need to upgrade their existing payment infrastructures to provide customers with a more streamlined refund experience. Failing to do so will only lead to businesses losing out on repeat customers.

And given how profitable repeat business can be, a good refund process will only benefit the enterprise as a whole.

To make this a reality, business owners should invest in a payment system that allows them to offer customers a full range of refund options - from complete to partial requests.

At the same time, the system must also quickly complete refund requests to ensure that customers are not left hanging.

In that same Klarna study, it was highlighted how 36% of customers felt frustrated by slow refund requests. And as a result, this often translated into lost business and a decrease in revenues.

8. What Is the UX Like?

17% of customers surveyed admitted to abandoning a purchase because the checkout process took too long or was overly complicated - which shows us that payment checkout is often the last stumbling block to a sale.

Keep this in mind: customers can always choose to close the window and cancel the transaction at any time.

Hence, your payment gateway should minimize the number of steps required to complete a transaction. That way, you can keep things moving smoothly and minimize the chance of customers changing their minds at the last minute.

Make sure that your payment gateway features a straightforward, easily-understood design that guides customers along. And because customers are more likely to purchase from a trusted source, ensure that your checkout page features the same layout as your website.

9. Is Your Method of Payments Local Enough?

How localized is your payment gateway of choice? And, how easy is it for customers to make payments to you?

These are questions that every entrepreneur needs to have at the back of their minds if they intend to expand into new markets.

XanPay - 34% of payments in SEA are made with QR codes

And here’s why: did you know that 34% of transactions performed in South East Asia were made with QR codes?

QR codes or quick reaction codes allow users to transfer funds digitally within a matter of seconds with just a mobile device and a bank account.

In the wake of the COVID pandemic, governments worldwide are encouraging customers to go digital. And despite the current economic turmoil, QR payments in China are set to hit $2.7 trillion by 2025.

Meanwhile, top-up game platform Elitedias saw a fivefold increase in users in the months following their partnership with XanPay, a digital alternative payment gateway.

XanPay's user-friendly interface and extensive support allow it to function as an extension to local payment service providers - thus, enabling Elitedias to bring its offerings over to a large target market.

10. Cross-Border Complexities

While there are plenty of benefits to conducting business overseas, the complexities of cross-border transactions often discourage entrepreneurs from taking the next step forward.

Business owners intending to expand overseas will have to contend with a variety of issues that range from complex and tedious paperwork to strict government restrictions on local businesses.

Also, let’s not forget that local business entities need to be formed in the country that you’ll be operating in.

But what if you could make all of this go away by making XanPay a part of your business?

That’s right.

With XanPay, you don’t need to worry about setting up a local business entity or worry about regulatory policies on foreign businesses.

Supported in more than 10 countries across Asia and compatible with a variety of APMs, XanPay is specially designed to bridge the gap between merchants and their customers.

That way, you can focus on growing your business and expanding your presence into new and exciting markets.

11. How Customizable is Your Chosen Payment Gateway?

If you're in the e-commerce sector, you probably already know that payment gateways are essential to processing transactions.

You may not know this, but not all payment gateways are the same. Some are relatively rigid with limited customization options, whereas others allow greater flexibility.

Thus, this is why you should always opt for a payment gateway that provides you with plenty of customization options. Keep in mind: it's always best to keep your options open, from widgets to web plugins and even full-page checkouts.

12. Different Businesses, Different Needs

As all businesses are built differently, they will naturally have different requirements. Hence, this is why you need to ask yourself: How will my chosen payment gateway benefit my business?

For example, if your business model is subscription-based, your payment platform must support repeat payments from customers. And also, be capable of receiving payments from multiple sources while supporting local platforms - thus allowing you to support your customers from as many payment avenues as possible.

And what if you're operating a niche or high-risk business? Did you also know that high-risk merchants are subject to higher fees from payment gateways?

xanpay serves high risk merchants

That's right, and businesses in adult entertainment industries are usually the first to feel the pinch.

But this doesn't mean that it's all doom and gloom.

From well-designed billings to support for non-credit card payments, XanPay prides itself on being a non-discriminatory payment gateway. That way, no matter your business, you'll be able to accept payment from all customers.

Just look at SWAG - Asia's largest adult-content streaming platform with users all across Asia.

After switching to XanPay, SWAG almost immediately saw an increase in revenue and a marked drop in customer complaints. Since then, 90% of payments from customers have been processed by XanPay.

13. Does Your Payment Gateway Support Mobile Devices?

Here's a fun fact: in 2021, 79% of smartphone users shopped online and made payments with their mobile devices. And with 83% of the world's population owning smartphones, you'll probably begin to understand the importance of catering to the mCommerce crowd.

Hence, you should ensure that your business's payment gateway is fully optimized for mobile users and provides them with an excellent experience.

14. A Trail of Crumbs: How Transparent is Your Payment Gateway?

Given the interconnected nature of today's world, transparency has become a significant concern for many business owners. And this is why your payment gateway must support your business in this area by providing you with a clear audit trail.

Hence, this makes fund movements easy to track and helps accountants create an accurate report of the organization's financials, allowing business owners to make better decisions.

15. Is There a Guest Checkout Feature?

Did you know that: nearly 25% of shoppers surveyed admitted that they would abandon a purchase if they had to create an account during the payment process?

Customers hate being inconvenienced, and you should take measures to prevent this from happening.

When reviewing a payment gateway, ensure a guest checkout feature is available. Failing to do so will not only lose you a sale, but it may even drive away customers.


Payment gateways allow entrepreneurs to tap into new markets worldwide by bridging gaps and building customer convenience.

XanPay is uniquely positioned to capitalize on all this thanks to its vast experience with international customers and extensive support for localized payment methods.

For more information on XanPay and its capabilities, check out our website.

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