The update of this article can be found here
The buzz around Ecommerce in the GCC is building after a string of announcements including Amazon’s acquisition of Souq, a financing round for Fetchr and a busy calendar of events, including ArabNet.
The buzz has inspired a range of merchants, from entrepreneurs to large family businesses to open their online shops, but something always gets in the way – Payment Gateway confusion.
Questions to ask yourself when choosing a payment gateway.
Who do I bank with?
Sometimes, you may be forced to choose a payment gateway based on who you bank with. Not all payment gateways work with all banks.
Do I have a Merchant Account?
If you are already accepting credit cards in a store, or elsewhere, then you have a merchant account. Often banks will ask for a large bond or guarantee to get one of these accounts.
Having a merchant account may reduce the fees you pay to a payment gateway. As above, it might also limit the payment gateways that you can use.
Some payment gateways in the GCC will allow you to create a sub account without the need for a bond.
What Ecommerce Platform am I going to use / using?
This has an impact on how easy or difficult it might be to set up your payment gateway. Some will require a specialist programmer, some may give you code to insert into your website and some might be as easy to install as a click of a button. Often the payment gateways recommended by banks are designed for companies with an IT department and don’t offer much support.
Some ecommerce platforms like Shopify make it very easy to start taking payments, but there are limited options.
What is the base currency I want to work with?
Usually this is the currency of the country that you are selling from, but some payment gateways may not support local currencies, forcing you to sell in USD. This is not ideal for your customers. There are also advantages for you to settle in the currency of your bank account to minimise any foreign exchange fees.
What payment methods do I want to support – Cash on Delivery? Credit Card? Debit Card?
Most ecommerce platforms support cash on delivery (COD) out of the box now. Credit cards will require a payment gateway. Debit cards will differ by country. In the UAE there is no special system, In Kuwait, debit card payments need to be done through KNET which is supported by some gateways or requires a special plug-in or app.
How many transactions (Orders) do I expect per month?
This will impact the pricing of your payment gateway. Most have a combination of monthly fees and /or transaction fees. The volume and value of your transactions will determine the best plan to choose.
Do I need a trade licence?
This question is not directly related to Payment Gateways, but should be considered before embarking on the e-commerce journey. A trade license will be required to get a business bank account and often this is required to be able to open a payment gateway account. A trade license can be a costly exercise and choosing the right category is also important. Regulations are changing fast, but e-commerce license may not be available for everyone.
Can you help me?
Yes we can. Send us an email with the answers to the questions above and we can recommend the best payment gateway for you.