How to choose the best payment gateway - RFP guide

In today's global economy, companies of all sizes need to streamline their payment processes and diversify the payment methods they accept to improve the customer checkout experience. Central to this objective is understanding the roles of various parties within the digital transaction lifecycle, namely: customer, merchant or business, payment gateway, and payment processor.

The transaction process begins with the customer, who places an order and provides their payment details. These details are securely transmitted via a payment gateway to the payment processor, which plays an essential role in ensuring that sensitive data is securely handled and remains confidential. The payment processor then liaises with the card issuing bank while relying on card networks (e.g., MasterCard, Visa, American Express, etc.) to verify the payment details and confirm the transaction's authorization. Once authorized, the acquiring bank finalizes the transaction by settling the approved funds and transferring them from the card-issuing bank to the merchant's account.

Given the importance of these intricate steps to ensure payments are processed successfully, businesses must prioritize the selection of an efficient and reliable payment gateway. This decision is more than an operational matter; it directly shapes the customer's experience. A payment gateway simplifies the checkout process, providing a seamless and secure transaction environment through the deployment of robust encryption protocols and secure transmission of sensitive payment data. Furthermore, a flexible payment gateway gives merchants access to multiple payment methods and currencies. This capability enables businesses to cater to a global customer base and expand their market reach. Investing in the right payment gateway is strategically important to enhance customer satisfaction while driving sustainable business growth. 

When it comes to integrating a payment gateway, digital platforms often decide whether to develop their in-house payment infrastructure that connects directly to several payment processors and payment methods or partner with an established payment gateway provider. Developing an in-house payment infrastructure offers greater flexibility, but it demands significantly more resources, takes more time to launch, and also requires ongoing maintenance efforts. Alternatively, partnering with an existing payment gateway can save time and effort while still delivering essential features and capabilities. 

For merchants who opt to collaborate with a payment gateway, conducting an RFP (Request For Proposal) can help identify the most suitable partners that align with their specific needs. To create an effective RFP, it is essential to provide potential vendors with the necessary background information, including the following:

• Reason(s) for conducting the RFP
• Requested timeline for the vendor to follow
• Evaluation criteria
• Expected features and capabilities
• Required integrations

This guide will help you identify key capabilities and features to include in your RFP for a payment gateway partner. We will cover areas such as general information, regulatory and compliance, IT architecture, product features, geographies, operations, pricing, and onboarding. The categories and questions you will find below are not an exhaustive list and serve as general guidance. It is always highly recommended to consider your own business priorities and tailor the questions accordingly.

General questions

• Where is the headquarters located?
• Where is your development team located? 
• What is the size of the technical team?
• Can you name some customers operating in the same industry as ours?

Regulatory & compliance

• Is your platform PCI Level 1 certified?
• Can you ensure compliance with all relevant regulations and standards (GDPR, etc.) in all jurisdictions where our business operates?

IT architecture

• What disaster recovery strategies do you have in place to ensure resilience and continuity of services?
• What is your standard SLA for uptime? What is the actual historical uptime for the last 12-month period?
• How do your platforms support a peak increase in transaction volume? Can it maintain consistently high uptime during peak seasons?
• How do we integrate with your solution? What are the options with a comparison capturing technical as well as compliance aspects?
• What is the average timeline for the integration, what development resources are you going to provide, and what implementation support do you offer?
• Which SDKs do you offer to integrate your solution easily?
• Do you have any easily configurable sandbox environment to try your service out?
• Will we get a dedicated technical point of contact to support us during the integration?
• In which geographies can your infrastructure be deployed (data center locations)?

Product features

• Do you provide PSP tokens along with the platform tokens?
• Do you support network tokens? Can you route network tokens or PANs depending on performance to maximize uplift?
• Do you support dynamic routing? How are routing rules configured?
• Can we use custom data fields for any routing scenario?
• How do you support payment fraud prevention and risk management?
• Do you support automatic retries based on custom retry rules?
• Do you support subscription payments, including subscription configurations? 
• Do you offer split payments for marketplace payments?
• Do you offer dynamic 3DS settings? Can it be configured on the portal?
• Do you support dispute management?
• Do you support scheduled payments that contain multiple authorization requests tied to different events?
• Do you offer payments via links?
• What capabilities are available within your back office?
• Do you provide a multi-tenancy on your portal?
• Do you support incremental authorizations, over-captures, and extended authorization windows?
• Do you offer a batch and real-time card account updater for PANs, and do you manage the lifecycle of network tokens?
• Do you offer a refund service?
• Can you dynamically optimize the checkout flow based on the customer’s location or other parameters?
• Do you offer reconciliation services?
• Describe the available reporting tools and ad-hoc reporting capabilities.
• Can we export data to use in our analytics setup?
• What data visualization capabilities do you offer? Is there a dashboard?
• Do you offer a detailed overview of payment costs, including detailed interchange and scheme fees associated with each transaction?

Integrations

• Provide a list of current payment service providers and acquirers, including the integration versions.
• What is the frequency of adding a new payment service provider/acquirer and new payment methods?
• What is the process of activating a payment service provider/acquirer and payment method that exists on your platform?
• For any acquirers/PSPs that you are not currently integrated with, what would be the process and timeline for developing a new integration?
• For any APMs, you are not currently integrated with, what would be the process and timeline for developing a new integration?
• If any upgrades or changes are required to existing integrations: Who would be responsible for requesting this update? What would the process look like?
• Do you receive any incentives from any 3rd party (including but not limited to PSPs, acquirers, fraud prevention tools) that you currently support? If yes, what will be the average kickback you get for the transactions processed for our company?
• How do you decide which payment partner to prioritize for integration? How does the potential of a kickback influence that decision?
• If we suggest integrating a new provider, will you get a referral bonus? If they don't provide a bonus, would you deprioritize them in the roadmap?
• Do you charge your clients more if they choose the partner that has a lower kickback rate?
• What would happen if a payment partner stops sharing revenue with you? How will that affect our business? Will we have to work with an alternative option?

Operations

• What is your typical account management structure?
• What are the communication channels?
• What is the escalation process in case of emergencies?
• Is there an SLA on response times depending on the communication channel?
• In which time zones and languages do you offer support?
• Do you have a technical guide and documentation?
• Can you provide local language support?
• What is the available time zone for operational support?
• How do you keep customers informed in the event of planned/unplanned changes or outages?
• What is the process of prioritizing new feature requests and new integrations?
• What is the process of sharing best practices?

Pricing and contractual terms

• Are there any other fees or additional costs we should be aware of?
• Are there any setup fees or monthly minimums?
• How are currency conversion rates and fees determined? Can you provide examples of these rates?
• Is there a minimum contract term? If so, what are the terms for renewal or termination?
• Are there any volume-based discounts or special offers for your services?

Recommendations from Payrails 

When selecting a payment gateway partner, it is essential to consider all aspects of the partnership, from technical capabilities to customer support, compliance and regulations, and pricing. By using this guide as a starting point and tailoring your RFP process to your unique business needs, you will be better prepared to make an informed decision that will support your company's growth and success in the long term.

It is important that the right payment gateway partner does not only meet your current requirements but also has the flexibility and scalability to grow with your business and adapt to the constantly changing market conditions. Keep these factors in mind as you evaluate potential partners, and you will be well on your way to finding the ideal solution for your company. If you are still feeling uncertain or have any questions about choosing the right payment gateway partner, don't hesitate to contact us anytime. Our team of experts is here to provide guidance and support to help you make the best decision for your business.