6 hidden payment gateway issues with your processing system

Payment processing problems can affect your revenue — and you may not even know. Learn whether your processor could be doing more.

For enterprise businesses, growth is top of mind — and with growth comes an increase not only in payment volume, but in your global scale. As you expand, you may ask yourself: Is my payment processor doing the most for my business?

It’s not uncommon for businesses to run into payment processing problems. These challenges can be more than a nuisance. They could detract from the customer’s digital experience, slow growth, and ultimately affect revenue — and they may be magnified for enterprises that process a high volume of payments across multiple channels and geographic locations, including in-person payments.

Are you doing everything you can to streamline payments and improve margins? You can start by examining these common payment processing problems you might not even know you have.

The biggest issues with e-commerce payment gateways

E-commerce payment gateways and processors work together to complete a transaction. The gateway is where customers enter payment information, and it also verifies that information to ensure a smooth transaction and that there will be no payment gateway issue. Payment processors transfer data to the necessary networks, like the banks involved in the transaction.

Since payment gateways are step one, let’s start by diving into their potential payment gateway issues.

Problem #1: Customers abandon carts before completing a purchase

Cart abandonment is one of the most common problems in e-commerce: 77% of desktop transactions were abandoned globally in Q1 2023, and mobile cart abandonment was at 86%.¹ There are many reasons for cart abandonment, including gated checkouts and slow checkout processes. Any payment processing issues can lead a customer to bounce.

Customers also have high expectations when it comes to payment methods. In one study, 59% of respondents say their customers have frequently abandoned a shopping cart when their preferred payment method is unavailable.²

To help drive conversion, your online pay system may need not only lightning-speed load times and a seamless, efficient user experience from consideration to purchase, but also the right payment methods in your shopping cart.

Solution: Expand online payments to offer customers more choices

There are cart abandonment solutions. To help reduce cart abandonment, increase repeat purchases, and improve the customer experience, choose an e-commerce gateway that gives your customers a variety of online payment options. Around 28% of consumer respondents in the U.S. expect flexible payment options from brands when they purchase or return a product.³

PayPal is the only payment processor that offers alternative payment methods like Venmo (U.S. only), PayPal Pay Later, PayPal, ACH, credit and debit cards, and popular digital wallets like Apple Pay and Google Pay, seamlessly integrated into one platform.

Problem #2: High decline rates affect your bottom line

False declines are payment processing challenges that can be frustrating for customers, causing them to leave your site before completing a purchase and even lose trust in your brand, potentially resulting in lost revenue. Yet businesses also want to protect themselves from fraudulent purchases.

Insufficient funds, expired cards, or fraudulent charges are legitimate reasons for declined authorizations, but there are other payment processing problems that can contribute to your decline rate, such as:

• Outdated card and customer information
• Cross-border payment risk assessment
• Data miscommunications
• Sub-optimal routing strategies

Solution: Optimized payment processing that can boost authorization rates

Backend optimization is vital to the overall customer experience, helping to reduce false declines and create smooth transactions. PayPal’s enterprise solutions have the power to help improve authorization rates by leveraging our global infrastructure to optimize your payment processing. Our two-sided network processes more than 20 billion transactions per year,⁴ collecting unique data that allows us to help reduce false declines while mitigating fraud.

We also help eliminate incorrect information through the use of payment vaults, removing expired cards and automatically presenting the most recent card as the default.

Problem #3: Your electronic payments systems aren’t integrated

Some merchants use a variety of payment partners for different functions. They may have one vendor for the checkout button, another for credit card processing, an additional system for fraud monitoring, and the list goes on.

Too many integrations can result in payment gateway issues and slower response times to a changing marketplace, decrease your operational efficiency, and increase costs. When there are payment processing problems, it can take hours to figure out the cause. Using a single integration helps you resolve issues faster and at a cost that may be lower than coordinating multiple vendors.

Solution: Choose a single integration for all your payment needs

A single integration can help you streamline the end-to-end payment process, find new operational efficiencies, maximize revenue, and get the most from your payment processor. PayPal’s end-to-end payment processing provides enterprise companies with seamless experiences for customers and backend tools that help streamline your tech stack, create new efficiencies, and minimize online payment issues.

More common payment processing problems

The next step is payment processing, which works in the background to finalize transactions. Issues with your payment processor could prevent your business from completing sales, resulting in lost revenue or customer loyalty.

Let’s take a look at top payment processing challenges experienced by enterprise businesses.

Problem #4: Rising fraud can erode customer trust and revenue

Fraud is one of the most common problems with credit card processing, as well as other payment types. It can result in lost sales, impacted profits, compliance issues, and financial damage to your business. And rising fraud is being felt by many businesses: 42% of respondents say their organizations are much more vulnerable to an online fraud attack due to digital transformation.⁵

Payment systems for enterprise companies process high-value transactions daily and deal with huge amounts of customer data, making fraud protection especially important. In today’s climate, PCI compliance is just the baseline of what a business needs. You may also need a payment processor with enhanced security features.

Solution: Employ a robust set of customizable fraud protection tools

Many enterprise businesses have separate fraud and payment processor tools, but a single integration could be a better option. On select transactions, PayPal’s advanced machine-learning-based Fraud Protection tests and deploys rules in real-time to adapt to evolving patterns. We also help prevent costly card fraud with 3D Secure authentication, and help keep transactions secure with network tokenization.

Problem #5: Aligning your payments system with global expansion

Whether you’re already globalizing your business or have high hopes for the future, scaling into new markets comes with unique payment processing problems. As you expand into the global payment landscape, there are all kinds of challenges of cross-border payments, including differing security requirements, data regulations, and other standards that can affect the way you do business.

Enterprise businesses that operate in the worldwide marketplace often have complex and varied systems to cater to different cultural and regulatory landscapes. But managing disparate systems over many time zones is far from ideal. You may need a global partner that can integrate multi-currency payment methods from every corner of the globe into a single solution.

Solution: Choose a payment processor with a global presence

Going global? Choose a payment processor that’s already operating around the world. PayPal is a global payment processor trusted by companies and consumers alike. Our network of 432 million active global accounts can help businesses expand their reach — and our relationships with local banks offer expertise in markets around the world.

Our combination of global scale and local knowledge means businesses like yours can harness growth opportunities like cross-border transactions and local payment methods to expand into new markets with confidence.

Problem #6: You can’t respond quickly to changes in the marketplace

Some say the only constant is change, and the global marketplace is not exempt from this concept. Changing customer behaviors, economic conditions, and evolving technology affect the way we do business — and you may need a payment processor that can keep up.

Agility is essential for enterprise companies. It allows your business to stay nimble and competitive as each market where you operate evolves. Many find it difficult to streamline complex tech stacks and legacy systems, but the right payment processor can help.

Solution: Use an agile, customizable payments platform

Manage your commerce network with a fully customizable platform that can adapt to your changing needs and grow with your company through every stage of the business life cycle. Here are some tips for enterprise payment challenges. PayPal helps empower you to turn on what you may need, when you need it — from frontend solutions that help you acquire, convert, and retain customers to advanced security features and the ability to collaborate with partners far and wide.

When you’re able to anticipate customer needs and easily provide solutions, you can position your business to weather political, economic, or cultural shifts that impact consumer buying behaviors. The future? Bring it on.