things to know before choosing
a Payment Gateway

1. Choose the one with Bank Negara approval

There are lots of new payment gateways currently but not every payment gateway in Malaysia is registered with BANK NEGARA. Why do payment gateways need an approval from BANK NEGARA? Well, the one with BANK NEGARA approval is is of course, qualified, verified, trusted and is serious about business. BANK NEGARA governs the payment industry in this country, so to eliminate between the original player and the unreliable new comer (even worst, scammers), you need to check and verify with them.

To know which payment gateway is listed with BANK NEGARA, kindly visit their page for the listing.


2. Choose the one with reasonable sign up fees

Simple rules of life. There is no free lunch in this world. There are lot of payment gateways that offers free sign up. It’s good but remember to do more research on this because when it comes to free things, there must be some hidden cost. Free sign up is just to lure people in therefore  how does this to cover the cost in the long run? There are secured servers to maintain, a customer support team to attend complaints and comments, banks deposits and so on. Payment Gateway is not a small business to run. As the wise man says, if you throw peanuts you get monkeys. So imagine when you pay nothing, what is the catch behind it.

Then there is the ridiculous sign up or start up fees offered by some payment gateways which is unreasonable for you to commit. Some payment gateways choose to do so to eliminate small business owners and just want to focus on the “big fish” merchants.

So, what is a reasonable sign up fees? RM500 per year is about RM1.36 a day. RM2,000 per year is about RM5.47 a day. So it is up to you to choose whichever suits your business.


3. Choose one with an average transaction fees

A sign up fees is a fee charged to register on a payment gateway, while a transaction fees is a fee that charged on every single successful transaction. Normal transaction fees for credit cards vary from 2.5% to 3.5% depending on the payment gateway.

If you choose the cheapest then you save more. Of course, say you have 300 transactions per month but a 1% difference is a lot. But do take note that cheap doesn’t guarantee value so, choose the average to be safer and get better value.


4. Choose one that offers both Credit / Debit Card and FPX online banking

If you choose payment gateway that only offers FPX online banking, than you are neglecting the credit / debit card customer segment. Not everyone wants to buy using online banking as they may want to use their credit card to collect points for rewards.

At the end of the day, having a payment gateway is to give your customer an option on making a payment via FPX online banking, or debit/credit card and hassle free.


5. Choose one with a free and frequent settlement

A settlement is a process in which the payment gateway transfers your money (your sales transaction) to your account. Some payment gateways may require a settlement charge every time you make a settlement but some offer free settlement.

Charges on settlement is quite standard but it is important to know why you are being charged for payment transfer.

You also need to check on how frequent is the settlement process is. Is it once a month, or once a week, or twice a week or every day. The longer the settlement, the longer the payment gateway holds your money.


6. Choose the one with a good customer support

Customer support is crucial in the payment gateway business. It is because it deals with people’s money. Check if the payment gateway support  is 24 hours, or at least, their customer support replies your inquiries or comments within 1 – 2 working days.

Logically, payment gateways works similarly like a bank. If they cannot attend to your issues within 1 – 2 working days, then there must be something wrong. It’s either they don’t have customer support, or their customer support is busy with large number of customers.

Another way to evaluate payment gateway is to check whether :

  • Can I call them during office hours?
  • Can I send them a message through social media like Facebook?
  • Can I send them emails?
  • Do they at least use ticketing system to manage their customer support?
  • Can I set a meeting with them at their office?

And most importantly, would they even care to reply?


7. Choose the one that has been verified, secured by third party

There are some standard and verification needed from a third party organisations to evaluate and to assess the security level of a payment gateway. Look for word like “PCIDSS” or “Geotrust” on their website. Like banking industry, all of their website start with “https://“ which mean is another level of security compared to other ordinary websites.

A “PCIDSS” standard or “Payment Card Industry Data Security Standard” is a must to handle credit cards transaction and administered by the Payment Card Industry Security Standards Council.


8. Choose the one that at least, already 3 years in the market

In business it said that you need, wait until the 3rd year to see success. If you manage to achieve success in 3 years, then your business has survived the worst.

In a startup business there are bound to be many challenges.As such best not to support a startup payment gateway, as you may not get what you want.


9. Choose the one that keep improving their services

It is normal for a business to have hiccups and sometimes it may not be an easy road, but most importantly is that the services and their products are always improving for the better. Payment gateway is a long lasting relationship, with lot of effort and discipline to maintain the ups and downs an keep improving.

Now, how to keep track whether their services are improving or otherwise? Constantly check on their social media and see how frequently they post on their new updates.


10. By Malaysian, for Malaysian

If it is not us as Malaysians supporting our local products or services, who else will? But of course, do check whether the payment gateway is owned by a Malaysian company as some startups are by Malaysians initially but could be sold to a foreigner. As we build our business, let’s build our country as well by supporting each other.