A payment gateway is responsible for providing a secure platform for businesses to accept online payments from customers. Therefore, it’s crucial to compare payment gateways and choose one best suited for your business’s unique requirements since they all come with their own unique set of features. And since there are multiple payment gateways you can choose from; therefore, it’s important to choose one that has the essentials you need for your business.
A good payment gateway will provide your customers with a seamless checkout experience and ensure minimal processing risks, maximum convenience, and increased sales due to zero transactions errors resulting in more conversions and a superior customer experience.
What is a Payment Gateway?
It’s an online payment platform responsible for collecting, encrypting, and sharing transaction-related data between customers, merchants, card networks, and banks to securely communicate and facilitate online transactions. In layman’s terms, it’s the cash register for electronic transactions, which is super important in today’s day and age where a seamless experience is all that matters for customers.
Who Are All a Part of the Transaction?
- The Merchant: Also known as the seller. It’s the online business selling the product or service to the customer.
- The Customer: The cardholder or buyer purchasing the products or services from the merchant online. This party initiates the transaction.
- Issuing Bank: The customer’s bank issues the card on behalf of the card network.
- Acquiring Bank: The financial institution that holds the merchant’s bank account and is responsible for acquiring the funds from the issuing bank to the merchant’s bank account.
A payment gateway validates the customer’s card details to ensure that it has the necessary funds available for making an online purchase by acting as an intermediary between the eCommerce site and the acquirer.
How Does a Payment Gateway Work?
There are essentially three significant steps involved in the way a payment gateway works to ensure a successful transaction:
- Encryption: It’s responsible for securing all data entered by a customer into the checkout page, including sensitive personal and financial information such as credit card number, CVV, billing, and shipping information. All this information is encrypted by the payment gateway to be safely transmitted between the involved parties without exposing it to fraudsters.
- Request: An authorization request takes place online approval is received by the payment processor from the bank or card network. Once approved, transfer of funds can take place.
- Fulfillment: Post-authorization, the payment gateway system gives the go-ahead to the website to proceed with the said transaction.
Payment Gateway Vs. Payment Processor
They are entirely different in the way they work. They have a look at how they differ from each other.
- Payment Processor
A payment processor is responsible for analyzing and transferring transaction data, including all information such as credit/debit card numbers linked to bank accounts. Every time a customer swipes their card, a payment processor comes into the picture to transfer banking information to the acquiring bank.
- Payment Gateway
A payment gateway does everything a processor does but is also responsible for authorizing money transfers between the customer and merchant.
How to Choose the Right Payment Gateway for your Business?
There are many payment gateway service providers in the market, and all of them have their own feature sets. Therefore, you must choose a service provider that offers you the features and benefits best suited for your business.
Let’s look at a few points that should help you choose the right payment gateway service provider for your business!
Check if the Gateway Accepts All Types of Cards
While every payment gateway boasts that they accept online payments across various regions, most won’t share the regions they don’t service.
Therefore, it’s important to check if your payment gateway provider can accept all types of cards across various regions. Otherwise, it could pose a problem if you try to sell your goods or services to someone who resides in an unserviceable location.
Does it Accept International Payments?
Even if you don’t sell internationally, chances are you would, once you scale up your business and want to expand globally. Therefore, it’s important to choose a payment gateway provider that gives you the option of accepting international payments. This will help future proof your business when you decide to scale up to new markets.
Don’t Compromise on Security and Reliability
No matter which payment gateway service provider you choose, ensure that it functions according to industry standards such as PCI DSS. Reputed gateways that adhere to PCI DSS standards usually stick to the highest security parameters. Having such a gateway in place will ensure that your customer data is safe, decrease your business’s liability, and result in increased sales due to lowered cart abandonments. Moreover, it helps in acquiring new customers and helps in customer retention because the more secure the environment, the more likely a business is to get repeat visits from customers.
Multiple Payment Options
Go for a payment gateway integration that offers multiple payment modes such as cards, UPI, digital wallets, etc. Today’s consumers want various payment options since it provides them with convenience. Therefore, you should always have as many options as you can on the website to ensure a seamless checkout experience for your customers.
Choose a payment gateway provider that offers customization options such as the ability to include your logo, brand colors and typography on the payment page. This helps increase brand recall by allowing you to provide a customized checkout experience to your customers.
As a business owner, you need to understand that today’s business world is all about convenience, where consumers demand a seamless shopping experience. On top of that, they are also looking for security that’s top-notch and doesn’t expose their sensitive information to frauds. So, if you are looking for a solution that’s future-proof, convenient, secure, and lightning-fast, having a payment gateway platform integrated into your website is the ideal way to go!