A payment gateway is a software utilized by merchants that serve as a portal for transactions carried out via credit card payments. Payment gateways help make online selling and purchasing possible and seamless.
Once a customer clicks the purchase button on an e-commerce or merchant website, all data related to the said transaction is saved by the payment gateway. From there, the payment request is then verified and sent to the bank providing the customer’s credit card. The bank determines whether credit is available and likewise approves or disapproves the request.
Verified credit information means that the transaction will push through.
Online merchants from across the globe are already maximizing the use of payment gateways as a medium for payment transactions. Still, widespread use of payment gateways does not eliminate the misconceptions and fictitious theories associated with it. In this blog, the five most common misconceptions about payment gateways will be discussed and clarified.
Payment gateways are essential for businesses because it ensures that any transaction is seamlessly processed at all times. It caters to merchants, customers, and credit providers by offering a fast and reliable method of payment.
You can also check this out: ONLINE PAYMENT GATEWAY
Debunking payment gateway misconceptions one by one:
1. Payment Gateways and Banking Methods are Similar
Although it is the responsibility of the bank to facilitate the processing of online transactions particularly for e-commerce sites, the role of payment gateways is far different from that of the bank’s. Payment gateways serve as something akin to a mediator between the merchant or seller and the bank in-charge of handling the payment. The roles of payment gateways and banks cannot be swapped or interchanged. At the same time, payment gateways cannot assume nor provide the services that people can avail through banks.
2. Services from all Payment Gateways are all the same
It is true that there are a lot of payment gateways in the market that offer more than one service, which is to process over-the-web sales. Some payment gateways offer Virtual Terminal Account features to enable virtual card swiping for online services while other payment gateways do not include the said feature in its array of services. Businesses and online merchants should choose a payment gateway that is highly compatible with their objectives, selling demands and customers’ needs.
3. Inexpensive Rates are always a Great Choice
Although low-cost rate services may seem practical and highly enticing at first glance, the truth is, affordable rates may not always mean quality service. At times, payment gateway rates are inexpensive because the features are not on par with the changing market demands and standards. Aside from low-cost offers and flat rates, there are several other important factors that must be considered when choosing a payment gateway.
4. Payment Gateway Hold Zero Liability Over the Privacy & Security of Merchants & Buyers
Using payment gateways involve the transfer of money and sensitive customer information. As such, all providers of payment service gateways are obligated to guarantee that the transfer of payments are accomplished in a safe, risk-free manner and that customer and merchant privacy are consistently protected from all types of cyber threats.
Payment gateways that do not exercise protective measures against fraud are usually part of the scams that try to extort money from unsuspecting customers and sellers.
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5. Payment Gateways are Capable of Seizing or Controlling Payments Sent by Customers
Payment gateways are only responsible for processing and authorizing payment transactions between customers and merchants. It does not, in any way, come into direct contact with the money used by the customers to pay the goods and services that they want to avail. That said, payment gateways do not possess the capability or power to take control of the information and money that circulates in every online transaction.
Payment gateways play a vital role in the e-commerce and online retail industry. There may be a ton of payment gateway options with varying features, but the goal of each and every payment gateway is one and the same: Ensure fast and secure processing for online payments. At the same time, there are still several other misconceptions about payment gateways aside from the ones discussed in this article. It is best to do extensive research or raise certain questions and apprehensions about the service directly to the payment gateway provider.