6 Reasons Why Your Payment System Is the Weakest Link

When you run your own e-commerce platform, a lot can go wrong.

• You could lose customers by not presenting an easy-to-use UI.
• You could put off merchants and suppliers by not guaranteeing them a good selling experience.
• You could get into trouble by having gaps in your data security or anti-fraud measures.
• ...

What's striking: The majority of those potential weak spots reflect on the payment system of your platform. And the payment system reflects on them.

Payments Are Central to Your Platform's Success

In many regards, your payment system is the weakest link to your platform. Mainly in that many of the processes that make your business won't even start if the payment is not complete.

No orders would be sent out. No services would be granted. Without a payment system that is functional, user-friendly, and secure, you don't have a business case.

But it's also a weak link because a payment system is delicate. There are many dimensions in which it can underperform or even break when exposed to pressure.

Those "weak points" can be strengthened by making them crucial guidelines when choosing or setting up a payment system.

Here are some examples.

The Pain Points of Payment Systems

1. Dependability

This is the be-all-end-all factor in any payment system: It must be stable enough to succeed in managing the transaction types and payment methods your business requires. Continued payment failures can lead to a huge loss in revenue – 60% of organizations report losing customers due to failed payments, a study of Accuity claims. Having automatic payment routing in place can reduce the risk of payment failure, handing over transactions to a PSP with a higher success rate.

2. Speed

Payment gateways have to process thousands to ten thousands of transactions per day. The infrastructure has to be set up to handle those processes in due time. In addition, certain business models require instant payouts for deliverers or suppliers after purchases. What's more: Customers don't like to wait for refunded funds to be stuck in financial limbo – they want their money back now.

3. User Experience

Checkout would be the primary keyword here: Customers appreciate a straightforward user path that blends well into the overall UI of the platform. Sending them to external pages they don't trust in will perhaps make them abandon the cart. Also, they expect their favorite payment methods to be supported and their payment data being securely stored for their next visit.

4. Merchant Experience

Running an online marketplace, merchants and suppliers are perhaps your most important asset – remain in their good graces. Regarding your payment system, that means providing functional systems for handling billing, settlement, and customer refunds as well as payout and fee management.

5. Flexibility

If you operate an online business, chances are you are targeting more than just your home market. A poorly-equipped payment system can leave your expansion plans dead in their tracks, though. Relying on a vast array of different PSPs all with their integration architecture, creates confusion for your payment team – and turns the whole system into a slow, inflexible giant. Also, you will not be able to add new features on popular demand without checking the compatibility first or requesting updates from your PSP partners.

6. Security / Compliance

Security itself has many facets in payment. First, there would be the security that you have verified the identity of your customers – and that you can set up limits for those, who have a subpar credit record or are under scrutiny for fraudulent behavior on your platform. You have to be compliant with financial regulations, too. Secondly, you must ensure that your payment system does not invite cyber criminals. You must prevent bad actors from stealing customer data or hacking the system. Thus, it's crucial to establish air-tight data protection policies.

How To Forge Payments into Your Strong Platform

So, what can you do to hammer your payment system into a powerhouse for your e-commerce platform?

The short answer would be: Rely on a flexible, customizable system that you developed internally.

For the long answer, bristling with industry insight and best practices for payment system architecture, check out our white paper "How to Unlock Your Payment Gateway."

Just check here to download our white paper for free!