Having a variety of payment methods isn’t just a bonus – most customers expect it. The flexibility of accepting different payment types is important to clients, and not having adaptable payment solutions will impact how potential clients view our businesses and possibly, affect businesses’ growth negatively.
What’s a payment gateway?
A payment gateway is technology that accepts debit and credit card payments. This happens through connecting the payment processor that enables card transactions, like Stripe or Square, to the merchant account providers that enable your payment systems, like your bank account. These systems often have fees associated with each transaction.
To receive payments, we’ll need a payment processor, a business bank account, and a merchant account. The merchant account is a temporary account to receive incoming payments from the payment processor and transfers funds to our business bank accounts.
When a customer uses their debit or credit card to make payments for goods or services, the payment gateway collects data from the transaction, including details of the brand of the card used. It then passes this data along to the correct network and corresponding bank. Finally, the bank approves or rejects the transaction if it can verify the transaction as legitimate. It doesn’t matter if these payments are through in-person transactions or virtual terminals.
What’s a virtual terminal?
A virtual terminal, also known as a web or cloud point of sales (POS) system, is software that allows you to accept online payments from any device. For example, you could run a virtual terminal on your computer, phone, or tablet and turn that device into a point-of-sale terminal. This is ideal for accepting remote payments for online businesses.
What’s the difference between payment gateways and virtual terminals?
Payment gateways require hardware or an application programming interface (API), while virtual terminals don’t.
Additionally, payment gateways can be either physical, like a card-reading device, or digital, with the latter being hosted either on or off-site or by API. On-site hosting allows the transaction to happen on the same page where the customer made their purchase, while off-site hosts send customers to a different page to complete the transaction. With an API, a software application in the website performs electronic transactions.
How to choose the right payment gateway
Now that you know a little more about payment gateways and virtual terminals, what’s the best option for your business? It’s important to remember payment gateways don’t all have the same features or work in the same way. Here are some key factors to consider when determining which tool is right for your needs:
- Pricing and fees. After paying the initial set-up cost, you’ll have to consider monthly and transaction fees. You may prefer a combination based on the type and frequency of your business’s transactions. Lower transaction fees and a set monthly fee may be a good option for businesses with high-value transactions. Competitive transaction fees may benefit businesses with low-value transactions.
- Types of cards allowed. Visa, MasterCard, and Amex are the most commonly used credit cards, and most payment portals accept all three. However, you should carefully consider your choice as your customers could favor other card options like Discover.
- Types of payments accepted. Not every client prefers to pay with credit or debit cards. What are other payment types available to you? Do you accept cash? Cheques?
- Security features. The security of your financial information is crucial when receiving payments online, so ensure your chosen payment gateway is level-1 Payment Card Industry Data Security Standard (PCI DSS) compliant. This is the highest level of PCI compliance businesses processing, storing, or transmitting credit card information are held to. Some payment solutions also offer screening tools such as fraud detection for extra protection. Protect yourself and your customers by taking extra precautions and doing your research.
- Integration into your current system. The goal is to integrate payment portals into your current website without any hiccups in customer experience. If you use an e-commerce platform, ensure your payment gateway has instructions for integration and is easy for your customers to use.
- Transaction limits. These limits determine how much money someone can transfer in a single transaction. Be mindful of how this affects your customers' experience, as setbacks may discourage customers.
To best cater to your customers, consider whether an international payment gateway or multiple currency support would be a good fit. Does your business need to include recurring billing options and mobile payment support? Ensure you consider all the options and your client base before you decide on a payment gateway.
Why should coaches use payment gateways?
Payment gateways open up more flexible and secure payment options for our businesses and clients. Here are some reasons to consider using one:
- Let your clients use their preferred payment method. This smooths the payment process and improves customer experience.
- Invoice your payments. This allows you to keep track of when and what you’re billing your clients for.
- Access more clients remotely. International payment gateways and multiple currency support make this process and supporting clients worldwide much easier.
- Provide secure payments for all clients. Whether remote or in-person, a payment portal with good security measures such as fraud protection will put your clients’ minds at ease.
Customer support and flexible payment solutions are integral parts of client relationships. As coaches, we’re here to support and listen to our clients, so putting the ball in their court is always a great move.
Stringent security measures, multiple currency options, the ability to pay remotely and with multiple payment methods, and the option to invoice your payments all allow our businesses to tailor the checkout experience to our clients’ preferences.
And that’s where our package payment plans step in. These plans allow you to offer flexible payment options to your clients. And you know what’s better? You get to choose the payment date, and we’ll automatically generate the invoice.
Top 5 payment gateways for your coaching business
Ready to try a payment gateway for your business? We’ve compiled a payment gateway list for your consideration:
- Stripe is a favorite payment solution for businesses that rely on the internet. It’s known for cheap transaction rates, simple integration for web-based businesses, and accepting digital wallets. On average, Stripe takes five to 10 business days to process payments and supports more than 135 currencies in over 20 countries. Stripe’s fees are typically calculated at 2.9% + $0.30 of each payment transaction.
- Paypal is the most widely used payment gateway and has the best reputation. According to many online rankings, Paypal has set the industry standard for payment security and accessibility of service. It operates in 200 countries with transactions in more than 26 currencies and is extremely straightforward and user-friendly. However, Paypal charges substantial processing fees compared to other payment gateways, with a 2.9% + 0.8% commercial transaction fee for American payments.
- Payoneer specializes in international transactions and allows for detailed transaction history tracking. It takes three to five business days to process payments and supports more than 10 currencies, with varying charges. There’s a 3% credit card fee across all currencies.
- Quickbooks allows users to schedule recurring payments and provides complete accountability status. Processing takes one to seven business days. Plus, the system operates globally in more than 150 currencies. Quickbooks offers different pricing plan options.
- Transferwise provides built-in currency conversion for international transactions. It has competitive exchange rates and is upfront with its conversion fees. The currencies, transaction amount, and payment method affect the processing time. Transferwise’s money sending fees vary by currency and start at 0.41%.
With all these different options available on the market, we’re certain you’ll be able to find the perfect payment portal for your coaching business. While the functionality and capabilities of each payment gateway vary, transactions are only one part of the customer support. It’s essential to manage client relationships and implement best practices to maintain impeccable customer service for your clients.
Coaching is more than a transactional relationship. We develop meaningful relationships with our clients and want to make their coaching process as easy as possible, from payment to plans of action. Try Practice to improve your customer service, save time, and grow your business — especially if you’re using or looking to use Stripe, because our payments feature works best with Stripe.