Suppose anyone tells you that they know about a payment gateway that’s completely free without any kinds of charges whatsoever. In that case, chances are they are not aware that every payment gateway charges something, whether it’s obvious or hidden costs. So, the notion that you can get away without paying any payment gateway charges is most likely a myth.
Why Do Payment Gateway Providers Charge Businesses?
A payment gateway charges is a service just like any other service. As is the case with any service provider across categories, even a payment gateway is a service that needs upkeep, and some people need to keep the system up and running.
And to keep the system afloat, service providers need to pay salaries and maintain adequate infrastructure to ensure that the system is flawless and payments can go through seamlessly.
In short, if they don’t make any money, the system won’t function properly, and your business would be faced with downtimes when it comes to providing customers with a seamless online shopping experience. That is something that we would all like to avoid.
Look into Payment Gateway Charges
Payment Gateway Setup Charges
This is a one-time charge that payment gateway service providers charge to set up your merchant account. You cannot accept online payments without a merchant account as it is required to facilitate refunds and chargebacks. The money is kept in this account till the settlement period, after which it is transferred to the merchant’s business account.
Annual Maintenance Charges
The gateway provider charges a regular fee to maintain the payment gateway on security, technical upgrades, and operational costs.
This fee is charged to integrate your website or app with the payment gateway system so that you can start accepting online payments from customers.
Merchant Discount Rate
This amount is levied on the total purchase value of items, after which the remaining amount gets transferred into the merchant’s business account.
These are some of the most common charges charged by payment gateway service providers to keep systems up and running and ensure that services are at par with global norms in terms of offering adequate security and speed at which transactions can be carried out.
Is there any way to Avoid these Charges?
There are only two ways of doing so: I) Not using the services of a payment gateway service provider II) Developing and implementing your system. The first option is not recommended if you truly value your online store or app and want to give your customers the best possible experience when they shop online.
On the other hand, if you opt for the second option, you won’t need to pay the charges but will have to spend a lot of money on research and development.
Moreover, you would need to have an entire team dedicated to maintaining the payment gateway so that there are no glitches in the system, now add that with the cost of maintaining the system, paying off salaries to technical staff, etc., and you are better off partnering with a reputed payment gateway charges service provider to implement an electronic payment system on your website, or app.
As the saying goes, “There are no free lunches in this world.” The same holds for payment gateway systems as well since they are run by companies providing a service. And like everything else, they also need to maintain systems, pay staff, and make profits to keep their services up and running.