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This blog will detail 9 tips that will help you choose the perfect Shopify payment gateway for your business. From secure payment collection to efficient refund management, this exhaustive checklist has got you covered!
Congratulations!
You’ve taken the first step towards starting your online business by creating your store on Shopify India.
Or maybe you’ve been in the online game for a while and are looking to get on Shopify to maximize your online presence and increase your revenue.
Either way, you’re not alone. In fact, there are 38,806 live Shopify stores in India, as of January 2023.
However, one issue most customer encounter is choosing the right payment gateway. After all, your payment gateway might dictate your site’s transaction success rate, level of customer trust and overall revenue.
This is why we decided to create a checklist that will help you choose the right Shopify payment gateway for your business.
Let’s get started.
An Intro to Shopify India
Shopify India was launched in June 2013. The global DIY (Do-It-Yourself) e-commerce hosting platform became a huge hit in India with popular brands like Raymonds, Royal Enfield and L’oreal getting on board.
Choosing a Shopify Payment Gateway in India
In India, Shopify has partnered with 15+ payment gateways called Shopify third-party payment providers that have built ready-to-use plug-in integrations.
If you use any of the listed third-party Shopify payment gateways, you will be able to use integrated plugins built by the payment gateway service providers using Shopify API. Using these plugins you can show all supported modes of payments on your own checkout page and track the status of payment transactions directly on your Shopify India store without having to log in to any other account.
Pro Tip: To activate Shopify Payment gateway integration follow these steps.
Now that we have that covered, let’s move ahead to our checklist that will help you choose the best payment gateway for Shopify.
Offers Diverse Payment Modes
Offering diverse payment modes to your customers is not an option anymore. After all, 7% of all cart abandonments occur when customers can not find their preferred payment mode.
Moreover, a greater number of payment modes correlates with reduced cart abandonment and ultimately, a higher success rate.
Internet banking, cards (Visa, Mastercard), net banking and UPI are some of the commonly used domestic payment options. Other popular modes of payment include mobile wallets like Paytm, Amazon Pay and Ola Money. So, check if your payment gateway supports cards like Rupay, Maestro or American Express since this has a direct impact on your revenue.
Merchant-friendly Payment Gateway Charges
As a merchant, payment gateway charges can be an important deciding factor in choosing the right Shopify payment gateway. In fact, it has a direct impact on your overall revenue.
Largely, there are 3 types of charges associated with payment gateways:
- Annual Maintenance Charges (AMC): The charges for using the payment gateway. It covers the operating cost of the payment gateway. Most modern gateways waive off AMC.
- Setup fee: This is charged to cover the expenses of onboarding a new merchant or as a security deposit. Many payment gateways waive setup fees as well.
- Transaction Charges: Regular charges for providing the services. The charges can vary depending on the mode of payment. For example charges for using net banking will be lower as compared to charges for using international cards.
Cashfree Payments offers the lowest MDR in India while imposing ZERO AMC or setup charges.
Note: On Shopify India Pricing you will see that Shopify additionally charges from .5% to 2% per transaction based on the plan selected for using the e-commerce platform. So when negotiating payment gateway charges do keep in mind that on each transaction you will be paying Shopify transaction charges + payment gateway charges.
Cashfree Payments is one of the official payment partners of Shopify India. It is trusted by thousands of Shopify store owners and is best known for
- Fastest settlement cycle of T+1* days (*Settlement cycle is subject to bank approval and can vary based on transaction type, business category/model, risk parameters and other factors )
- Automated refunds processing powered by Payouts and Cashgram
- One-day activation of international payments
- Shopify payments expert support.
Allows International Transactions
One of the main reasons businesses want to run their business on Shopify store is the global reach it provides you. If you have customers outside India, or customers in India using international cards, it is vital to support payments via international cards and other popular international modes such as Paypal.
However, it is time-consuming and quite difficult for the small to medium businesses that run on Shopify, to get themselves approved for an international payment gateway. Hence, the ease of activation of international payment options assumes great significance for many Shopify India stores.
Customers outside India will prefer to pay in their local currency to avoid additional fees on currency conversion. If you have a customer outside India, do check if your international payment gateway supports multiple foreign currencies.
Quick Payment Settlements
Settlement duration is the time it takes for the seller’s account to be credited after the buyer’s account has been debited. To understand the payment settlement cycle let’s take the example of a customer who makes payment via his HDFC debit card.
- The customer enters payment details
- Information is captured by the payment gateway.
- The payment gateway encrypts the data and securely sends it to HDFC for authentication.
- HDFC approves the transaction and the fund flows to the payment gateway and then to the merchant’s account.
This process typically takes two to four bank working days. Delays arise when banks are closed during weekends and other bank holidays.
A longer settlement cycle means that your revenue will be locked with intermediaries like banks and payment gateway providers leading to lower liquidity of funds. Go for a payment gateway that provides a faster settlement cycle.
Cashfree Payments provides you T+1* payment gateway settlement cycle, which means when you sell on Monday, your money reaches your bank account on the following Tuesday.
(*Settlement cycle is subject to bank approval and can vary based on transaction type, business category/model, risk parameters and other factors )
Efficient Refund Management
Return policy can vary from merchant to merchant. Refund management can be directly proportional to your customer satisfaction.
While a refund can be initiated in quick time, processing by banks and card networks, and finally crediting the customer account takes much longer. In fact, it is ~ 5-7 working days on average and even longer for certain banks and cards. This becomes even harder for cash on delivery orders, where there is an added step of first collecting the bank details from the user.
Handling support queries around refunds thus ends up being a major operational challenge.
However, Cashfree Payments offers to process refunds instantly. While most payment gateways allow you to ONLY accept payments, Cashfree Payments offers instant, automated payment disbursal solutions. This offers an easy way for businesses to pay users and allows instant processing of refunds.
For COD refunds, where customer payment details are not available you can send the customer a Cashgram to collect payment details and send the refund amount instantly.
Read here in detail how Cashgram speeds up refund processing for e-commerce businesses.
Effective Customer Support
Your payment gateway provider needs to work along with you as your partner. Before zeroing down on a particular payment partner, check out their reviews. It is great if you can get a dedicated account manager who becomes your single point of contact for any issues that may arise.
Detailed Transaction Analytics
Once your business starts growing, you need a payment gateway that shares regular analytics of your transaction. These insights are required for making informed business decisions.
Cashfree payment gateway has designed intuitive smart analytics boards that not only show you a summary of transactions but also provide insights such as your payments volume, number of transactions, and distribution of your payments across payment methods (Cards, Netbanking, Wallets etc) and platforms (iOS, Android, Desktop) etc. You can further analyze this data grouped by hours, days, weeks or months across any timespan.
High Transaction Success Rate
Failed payment transactions are a nightmare for any online business.
The situation becomes worse when payment has been deducted from the customer account but the transaction has failed. Not only does it obstruct that particular transaction but it affects the overall perception of your brand and your potential buyer may not come again.
Many times the payments fail due to a problem at the payment gateway’s end or the bank’s end. To curb this problem some advanced payment gateways bank on dynamic routing.
For example, Cashfree Payments’ smart system detects the best-performing gateway based on success rates. In the event of a downtime or scheduled maintenance break, our intelligent algorithm identifies the drop in success rates and automatically routes the transaction through another bank’s gateway. This ensures that the conversion statistics always remain on the higher end.
Ease of Integration
Some payment gateways might need a more technical setup than others. Leading PGs like Cashfree payments offer no-code integration with Shopify that can be done without any technical expertise.
If you have any doubts or want to know more about how to integrate a payment gateway on your Shopify India store, talk to our Shopify Payments experts.
