Today, payment gateways form an important part of customer understanding. They must enable on-time processing and access to payment channels, global connectivity, and facilitate flexible integration of alternatives that work for both merchants and customers. However, payment gateways have these crucial limitations.
Not Bank Independent
Conventional payment gateway services are given out by a single bank, limiting our capacity to improve execution and control of our experience. Unluckily, this can bind a company into paying higher fee for transactions, accepting terrible customer service, and making them unable to tackle transactions if the bank’s service goes down. Another main problem faced by conventional gateways is the discomfort associated with trying to switch their acquiring bank.
Lack of Flexibility
A stiff, limited payment gateway can be expensive and constrain your capacity to go to a different financial institution, or put in new details or access decreased financial institution costs.
Hidden Fee Structure
Payment gateways have, since a long time, taken advantage of the hidden fees. This is one field in which modern ones like Stripe and Sezzle have progressed significantly, by employing simple pricing methods.
Unfair Treatment of Merchants
Across the board, chargebacks, and fraud make up less than 1% of all deals all over the world. Nonetheless, the rate is greater for e-commerce marketings, and it’s rising. A regular e-commerce company giving physical products should witnesses a 0.10% – 0.30% chargeback rate, and a little more than half of them is for fraud. If one is selling a non-physical commodity online, they are likely to witness an even higher ratio. Finally, if one offers a subscription service, it will be the highest.
Chargeback fraud, also dubbed friendly fraud, is in fact a major issue for e-commerce businesspeople. This happens when a customer makes an online purchase and later asks for a chargeback from their bank post receiving the bought products or services.
Risk Sensitive Information
It is crucial to remember that the main job of a payment gateway is to work with customers’ information. Thus, a payment gateway firm will have information on all sensitive data of its customers, including customers’ names, accounts, credit card numbers, passwords etc. This is extremely valuable information. Unfair people will be more than interested to pay enormous amounts of money only to gain access to this sensitive database, and gateway companies may potentially sell this to such eager parties without the customers’ knowledge.
Technical Glitches Take Troubleshooting Time
A payment gateway is essentially a software. And almost like every other kind of computer software, it might get crooked at times. When this happens, it can have damaging effects. Customers will no longer be able to access or pay online. On the flip side, customers will make merchants’ websites inactive. It will take a considerably long time to troubleshoot the issue and bring back merchants’ websites to previous functionality.