The Green Sheet Online Edition
December 13, 2010 • Issue 10:12:01
Enlightening talk about gateways
As payment professionals, we are all familiar with the gateways we use and recommend. Some of us make gateway decisions based on pricing, integration ability with third-party products, reseller support, customer service and our familiarity with the gateway.
In trying to learn more about gateways and their functionalities, I posted the following on GS Online's MLS Forum: "What payment gateway do you use and why? What are the pros and cons of a proprietary gateway? As always, feel free to expand the topic."
MGORGE responded first, stating, "I'm a big fan of Plug-n-Pay. They have the total package: All the bells and whistles, great documentation for integration with shopping carts and their APIs; connectivity to most front-ends; knowledgeable and accessible support staff; state of the art hardware.
"The only deficiency is their user interfaces aren't pretty. They work and are functional but could use a face-lift. As an added note, if there is a business case presented, they always go the extra mile to make the deal happen.
"There are many other great gateways out there. I have been impressed with eProcessing Network's feature set. ... I think the current trend of processors offering their own gateways will put some pressure on the independent gateways."
CCGUY agreed with MGORGE with respect to ePN. He said the company has "a lot of interesting offerings." He also noted that GoToBilling.com has "some great features, customer data base, API, invoicing, email marketing, reporting features, credit cards and ACH all in one customer profile ... many great features for ... MO/TO and Internet merchants."
JESTEP raised an issue oft considered when selecting partner vendors. Regarding his choice of Network Merchants Inc., he stated, "They don't compete against you, unlike [other gateways].
"Big reason. They are also lower cost for our customers, and they have all of the features of any other gateway (recurring billing, card vault, fraud screening, retail integration, check services, very good API [application programming interface]).
"Many of the features that gateways charge for are included (recurring billing being the most common), and the other ones are very reasonably priced."
AZMIKEY30 shared a processor's perspective and insight in comparing gateways. "As a processor and an ISO we support several different gateways," AZMIKEY30 reported. "Part of this is out of necessity. Meaning ... agents and offices sell what they are comfortable with. By supporting multiple gateways, we can better support the agents.
"As a processor we take on the billing for the gateways, which helps provide the merchants with a streamlined month-end process as they get one debit, one statement.
"From a practical perspective, we break up the gateways based upon what we typically see as their areas best served. Some gateway providers try to be everything to everybody and often end up just being average at everything.
"Auth.net/PayPal - both are for the mass market, low-volume merchant or those not needing much assistance in the development process. Many merchants already use these guys, so it makes sense from a conversion and support perspective to have these in the stable.
"Neither of these would be the first choice for new merchants, unless they already are using either of them. Auth.net because they are now owned by Visa, and PayPal because, well ... who knows what PayPal will be in two to three years, and do I really want to be sending merchants their way today?
"eProcessing - is a gateway that we are rolling out, primarily for support of QuickBooks, their virtual terminal and their JPOS virtual terminal solution swipe/nonswipe. To me, this becomes the leading option other than Auth.net or PayPal.
"TrustCommerce's sweet spot is the mid- to large-tier merchant needing custom integration, accessible technical support and P2P encryption for retail. Any merchant requiring developmental support, I have no problem turning over to these guys.
"They have some top-notch clients which help in securing the mid-large tier merchants. Not the least expensive, but they service the merchants and the attrition is low. I don't have the expertise to work the technical side; these guys do.
"Apriva - I'm not sure that anyone really does wireless better than these guys. They are not the cheapest, but the stuff works day in and day out, and their support is of great value."
DEE MALIK shared his appreciation for ePN, stating, "I like eProcessing Network because of their time in business, their commitment to our channel: meaning, not selling against us - and their technical innovation. Their new app looks to be a very exciting addition to what they offer. ... The ability to visit their site and self-train is fabulous, and they seem to build apps with our channel in mind.
"Their services work with both check companies and the gift card company that I use. Even I can figure out their recurring billing program. The folks that I have contacted are knowledgeable and pretty easy to talk to. ... When you look at what they offer, it is amazing that they will deal with you at the ISA/MLS and not just the larger ISO/processor."
MAKETELINC gave shout outs to eProcessing and USA ePay. "I use ePN. ... I like it [and] for a little more money, USA ePay may do a lot more. Programmers like it better. I find it a different animal made for the larger merchant; it sells batches of 5,000 transactions" for a nominal fee.
CCGUY plugged his favorite gateway. "While the gateway gotoBilling is not widely used, the gateway has a great home page; everything is tabbed," he noted. "There are videos throughout the software so merchants can watch videos on how to do things.
"The invoicing feature is awesome. Customer data base and the import and exporting of customer data and sales data is something merchants love. Instead of a QuickBooks plug-in they have a QuickBooks Sync, and merchants love it."
SALESAMS listed what he seeks from a gateway, paraphrased as follows:
- There should be a quick link to the virtual terminal that's easy for the merchant to navigate.
- Fraud prevention technology should be built in and not at an additional expense.
- Automatic recurring billing is a nice feature if it's user friendly.
- Smart-phone integration is a plus, i.e., a smaller version of the virtual terminal so merchants can pull up the browser with ease and run transactions on their smart phone.
- A gateway that's compatible with check and ACH programs is also a plus.
- Not being a direct competitor selling merchants accounts (or farming them out the back door) is a must.
SALESAMS' criteria are excellent. Anyone out gateway shopping can use them as a punch list. I would add the following for my ideal gateway:
- Ease of integration: A strong integration API is key for developers and hosting service providers. A primary element is a strong developer's library that supports multiple programming languages, third-party developer application support, and carts and certified solutions support that we merchant level salespeople (MLSs) can direct developers to.
- Gateway features: Does the solution provide comprehensive tool sets to help merchants manage their business? Good gateway services build their value-added services around a customer management system or customer database. Customer databases that assist merchants in managing their business are much more crucial than stand-alone features that lack scalability.
- Multiple processing platforms: Due to the ever changing marketplace, a gateway should support more than one processor, transaction type and communication protocol. As markets change, it is important for these solutions to have diversity to work with multiple merchant types and opportunities.
- Customer support services: Providing quality customer support to merchants is critical. Does the provider make merchants jump through extra hoops to issue credits or pull older data?
The most surprising aspect of the replies is the absence of comments on certain unique gateway features. The only added feature I regularly use is a gateway for wireless processing. Again, both ePN and USA ePay (as well as Apriva and Authorize.net) have several solutions I recommend to merchants. Forum members did not discuss features like dynamic descriptors, convenience fees, fraud databases, Level III data or PIN debit.
To broaden the conversation, I reached out to a knowledgeable industry professional, Ido Meros, President of Check21.com LLC. I asked Meros to describe some of the unusual features he is building to differentiate his gateway.
Meros described the following planned additions:
- Automated card account updater service to notify merchants not only when a card is expiring or being replaced, but also of the new expiration date (and account number, if appropriate) - a tremendously useful feature for merchants with recurring transactions.
- An affiliate module to track chargebacks by affiliate and publisher. This will enable merchants to track and dynamically reject transactions from specific affiliates and/or publishers.
- Dynamic descriptors to allow merchants to comply with the card network descriptor rules, while still giving cardholders ample information in the descriptor line to identify or question charges.
- A fraud scoring system that rates transactions based on a number of factors such as IP address, cardholder information, spending habits and other proprietary data points.
As you can see, gateways are more than just commoditized virtual terminals. Many have evolved into complete processing platforms that have more functionality and features than traditional solutions.
While the conversation focused on the more widely used gateway features, I hope this article provided each of you some basics on the criteria that MLSs are seeking in a gateway.
More importantly, those who contributed posts to this article are available on the MLS Forum. Should you have more in-depth questions, send them private messages through the forum.
Respondents have been very generous with their knowledge and even freer with their advice.
Until next time, when in doubt, sell something!
Ken Musante is President of Eureka Payments LLC. Contact him by phone at 707-476-0573 or by email at firstname.lastname@example.org. For more information, visit www.eurekapayments.com.
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