The transformation in the transaction methods has driven small businesses to accept multiple modes of payment. The younger generation prefers to pay via quick modes such as UPI, Mobile Wallets, and even the Pay Later method for big purchases. The other half population prefers to pay via card or use net banking. The bottom line is that online payment methods are here to stay. However, collecting online payment transactions can be a hassle, especially when small businesses lack the payment gateways and the proper infrastructure. 

As per an article by Statista Research Department, there were approximately 150 million online shoppers annually in 2020. This is testimony to the potential growth of the online payments industry in India. With easy access to the Best Online Payment solutions, even small businesses have moved to the digital space. Handling online payment transactions is not as easy as it sounds, though. There are several challenges that merchants come across, especially if they have a small business with less human capital.

What are the challenges while handling payment transactions?

• Frauds Targeted at the Merchant: Fraudulent transactions are one of the most significant challenges merchants must prepare for. Cyber-attacks can be targeted at both the customers as well as the Business. The merchant can avoid being deceived or conned by regularly checking statements. Allowing cash-on-delivery judiciously is another way to protect against cyber-fraud. Accepting instant online payment is better than cash-on-delivery as it ensures that no dummy orders are placed. Few payment gateway services also offer 24/7 customer support wherein a merchant can call to check for suspicious, incomplete, or fraudulent transactions. A notable gateway offering this is Zaakpay. 

• Frauds Targeted at the Customers: A customer is required to enter their sensitive payment information on the merchant’s website to make a digital transaction. Cyber attacks can lead to this sensitive information being stolen. Customers are bound to avoid shopping from businesses that don’t guarantee the security of their payment credentials. This poses a massive challenge for the business that may bring down its credibility and sales. To combat this, merchants should opt for payment solutions that are PCI DSS (Payment Card Industry Data Security Standard) compliant. It is a set of regulations that ensures protection for customers’ information by encrypting the data. Merchants should customize the gateway page with logos of all the security standards to reinforce the security in the customers’ minds. 

• Integrating Payment Gateway: Small businesses usually struggle with maintaining a website with all the necessary features. Integrating the payment gateway into the website also becomes a difficult task for them. Generally, small businesses do not incorporate the gateway but redirect the customer to it by hosting it on the gateway service’s server. While this is not an incorrect practice, it comes with its own set of issues for the business. Getting redirected several times can be a dealbreaker for many customers. It not only takes time to get turned but also poses security risks. Hence, it is best to integrate the gateway into the business website. As a result, the checkout process becomes quick and straightforward. Best online payment gateways like Zaakpay come with easy integration tools that can be used by small businesses efficiently. Such gateways support all types of websites, including mobile applications. 

• Processing Fees: The online payment gateway services charge a nominal fee from the business for the transactions. There are several layers to this fee as a part of it also goes to the card issuer and network. This can become a significant challenge for the business if they opt for a payment processor beyond its expenditure capacity. The rates depend on numerous factors. Type of business, payment methods accepted, monthly transaction volume are major factors that affect this cost. Hidden or irregular costs also pose a threat to cash flow. Many gateways charge a monthly or annual maintenance fee. There are additional costs like chargeback fines or bulk transaction processing fees, among several others. To avoid spending too much on payment processors, small businesses should research the associated cost. A cost-benefit analysis can be done, along with a comparison of all available options. 

• Payment Support: There is no definite time for online shopping. Customers can also place an order in the middle of the night. Similarly, payment issues can crop up anytime, any day. Solving such problems at the earliest is a big challenge for businesses. Delay in resolving queries can lead to customer dissatisfaction. Choosing a Payment Gateway service with 24/7 customer support can solve this problem. Zaakpay, for example, has customer support that entertains calls not only from the merchants but also from their customers 24/7. This ensures that all payment-related queries are solved immediately.

• Regulatory compliance: In addition to PCI DSS, several other regulatory standards and certifications are mandatory for businesses accepting online payments. A challenge faced by businesses in this regard is the hefty fines for non-compliance. This also means that the technology used for payment collection has to be kept up to date.

• Supporting Multiple Payment Options: The customer base of the business will be spread across a vast spectrum. With innumerable payment options available, different customers might prefer different modes. This becomes a challenge for businesses because they have to support all such methods. Failure to accept payment by either mode means loss of the customer segment preferring that particular mode. To overcome this challenge, merchants should opt for the best online payment solutions that support all major payment modes like credit & debit cards, UPI, net banking, and mobile wallets. Zaakpay, for example, supports 100+ payment options catering to all the customers.

Conclusion

Just as every coin has two sides, handling payment transactions also comes with a unique set of challenges. No challenge, however, is unbeatable, provided the right strategy is used. By combatting the challenges, small businesses can give a considerable boost to their revenues.