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How to Choose the Best Payment Gateway for Your UAE eCommerce Website

Payment gateway

Since the beginning of the pandemic, cashless payments have experienced an upshoot in popularity. In addition, today’s digital landscape is dominated by cryptocurrencies and e-wallets, making other options like cheques and cash virtually obsolete.

Compared to the 22% of consumers who prefer to use debit cards to make online payments, a measly 17% still rely on cash—as such, introducing a robust payment gateway for your UAE eCommerce website is a logical decision.

As online businesses grow, so do the capabilities of popular payment gateways. Use this guide to pick the best payment gateway in the UAE based on payment types, cost, integrations, ease of transactions, and other factors. 

What is a Payment Gateway?

Payment gateways capture and transfer payment data from customers to acquirers. These tools validate customer card details securely, encrypting them to ensure safe transactions.

Ultimately, its purpose is to capture information, ensure the funds are available, and guarantee payment to the merchant. 

Who is Involved in Making Online Payments?

To better understand why a payment gateway is necessary for your eCommerce website, it’s crucial to identify the key players involved in the process.

  • Customer: Also known as the cardholder, customers are responsible for initiating transactions.
  • Merchant: Merchants pertain to entities making the sale.
  • Issuing bank: This is the customer’s bank—they issue the cardholder’s debit or credit card.
  • Acquirer: The acquiring bank is a financial institution that maintains the merchant’s account, passing transactions to the issuing bank to receive payment. 

How Are Payment Transactions Processed?

Understanding how money moves a customer to their merchant can help you determine which payment gateway best suits your needs.

The two primary stages of payment processing include authorization and settlement and involve the following steps.

  1. A customer makes a purchase using a credit or debit card.

  2. The customer’s financial information goes through the payment gateway, which encrypts the data.

  3. The payment processor sends a request to the customer’s issuing banks.

  4. The issuing bank sends an approval or denial of the requested funds.

  5. If approved, the payment processor communicates this to the customer, and the merchant bank credits the business account.

  6. The card issuer delivers the funds to the merchant bank, and the funds become available.

Reasons Why You Need a Payment Gateway for Your UAE Business

Did you know that 17% of consumers abandon online shopping carts because they don’t trust websites with their credit card information? Fortunately, incorporating a secure payment gateway into your eCommerce can alleviate this fear and provide several other benefits. 

Fast and Secure Transactions

Nowadays, consumers prioritize online security when shopping on eCommerce websites. As such, achieving PCI DSS (Payment Card Industry Data Security Standard) status can help protect merchants and customers from potential fraud.

On top of this, payment gateways are fast—approval takes no more than a few seconds, allowing merchants to increase cash flow without hassle. 

Widened Customer Base

Payment gateways allow businesses to penetrate global markets, inadvertently increasing your customer base. Not only do they enable you to accept multiple currencies, but they promise total security via fraud protection tools.

Enhanced Customer Experience

Contrary to popular belief, payment gateways do more than just facilitate transactions. Some gateways come equipped with additional features that allow users to save bundles and add products to a list of favorites.

Payment gateways also enable immediate payments and seamless transactions, lowering the risk of cart abandonment.

Improved Convenience

Unlike in brick-and-mortar establishments, eCommerce stores with robust payment gateways can accept payments 24/7. Always-on payment gateways are beneficial for catering to consumers who tend to make impulse purchases.

Automation and Fewer Declined Transactions

Payment automation reduces the need for human interference when accepting payments, saving merchants time and money. They also enable customers to set up automatic withdrawals and subscription payouts, increasing overall convenience and efficiency.

Minimum Set-Up Fees

While most payment gateways charge transaction fees, setting them up is generally cost-effective.

Factors to Consider When Choosing the Right Payment Gateway

Not all payment gateways will suit your functional requirements. Thus, consider the following factors when choosing a payment gateway for your UAE eCommerce website.

Cost

As mentioned, integrating an existing payment gateway shouldn’t cost your business an arm and a leg. However, it will incur costs—some of which may not suit your budget.

Consider the volume and value of your transactions and whether they can offset payment gateway fees. Most payment gateways charge a competitive transaction rate of 2.9% + 30 cents, increasing expenses if your transaction value is high.

In addition, some payment gateways will require a subscription fee between $25 and $30 a month.

Instead, you might consider a payment gateway that charges fixed monthly and low transaction fees. 

Currency Support

If you plan to expand your business internationally, payment gateways with currency support enable you to run transactions from anywhere in the world. However, some foreign currency transactions may charge varying fees.

Integrations

Payment gateways that integrate seamlessly with your existing accounting or billing software can spare you the time it takes to process manual updates. Some payment gateways come equipped with invoicing tools that automatically update within your bookkeeping system.

Mobile Payments

58% of online purchases occur on a mobile phone compared to other devices. In fact, mobile payments are likely to replace credit cards and even point-of-sale purchases in the future. Therefore, you want to ensure that your payment gateway supports digital mobile wallets like Google Pay, Samsung Pay, and Apple Pay. 

Security

Protecting sensitive financial information is imperative for customer safety regardless of whether you operate a small business or large enterprise. Ensure that you choose a payment gateway that is at least level one PCI DSS compliant.

credit cardsHosted vs. Non-Hosted

Depending on store functionality, you can host gateways off-site, redirecting customers to a new page, or on-site, allowing customers to enter their information without leaving your website. Each poses unique advantages and disadvantages.

For instance, hosted gateways eliminate the risk of storing sensitive financial information on your website. However, adding an extra step to the purchasing process might discourage consumers from following through. Not to mention, encountering a glitch might be enough to repel potential customers from transacting a second time.

The Best Payment Gateways for UAE eCommerce Businesses

Digital payment systems like Paypal have been around for a long time, but other processors are proving themselves as worthy competitors. Here are the top five payment gateways we recommend for startups and larger UAE businesses.

Paypal

Established as a digital wallet in 1999, Paypal has become one of the most versatile online payment processors. According to Paypal, incorporating it as a payment option can increase checkout conversions by up to 44%.

Paypal currently accepts 26 currencies from over 200 markets and credit and debit cards. Its virtual terminal can also accept phone payments. 

Transaction fee: 2.9% + $0.30 per transaction

Stripe

If your business is looking for customizable payment solutions at competitive prices, Stripe is an obvious contender. It is developer-driven, providing native integrations with existing eCommerce platforms and support for over 135 currencies.

Stripe boasts numerous payment types, including mobile payments, subscriptions, one-click payments, and user dashboards. Not to mention, it has nearly 500 unique extensions to help automate your payment process.

It does not charge a monthly gateway fee and offers 24/7 support in case of any glitches.

Transaction fee: 2.9% + $0.30 per transaction 

Square

Square is an excellent option for businesses with eCommerce websites and brick-and-mortar locations, as it is compatible with smart devices. While it supports all major debit cards, credit cards, and digital wallets, it isn’t compatible with Paypal.

However, Square can process electronic check payments and is famously easy to set up. Its mobile credit card reader is entirely free.

Transaction fees

  • 2.6% + $0.10 per in-person or eCommerce transaction
  • 2.9% + $0.30 per invoice transaction
  • 3.5% +  $0.15 per manual card-on-file transaction

Braintree

Startups looking for a payment processor with an easy setup and buildable variety of payment types should try Braintree. While its features are basic, Braintree provides a seamless checkout experience with a minimal learning curve. 

On Braintree, you can build a merchant account, accept all major credit and debit cards, and process over 130 currencies.

Users can even store customer information and set up recurring payments for subscriptions. Braintree comes equipped with top-tier fraud prevention tools and data encryption.

Transaction fee: 2.9% + $0.30 per transaction

WePay

Originally a peer-to-peer group payment platform, We-Pay is ideal for use with multiple channels. Merchants using WePay can handle complex payment requests (i.e., crowdfunding campaigns) on various online platforms.

All you need to set up a WePay account is an email address. Businesses that use omnichannel marketing will love WePay’s customization features—you can accept payments in-person and online. 

Transaction fee: 2.9% + $0.30 per transaction

The Bottom Line

If you run an online business and want to stay ahead of the game, incorporating a powerful payment gateway into your UAE eCommerce website can keep pushing customers into your sales funnel. When selecting the right payment processor, always consider how pricing and procedures fit into your business model.

Could your eCommerce website use an upgrade? Schedule a consultation with our digital marketing agency today. At Igloo, we have decades of experience in various industries and applications.

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