Payment gateways are used to help enable smooth online transactions and to get approved by the bank. This type of service sends credit card information from a website to the payment network for secure processing. It returns the details of the transaction and the responses of the credit card payment network to the respective website.
There are a number of reasons why a payment gateway is vital to every business and e-commerce website. According to a study by Shape Security, 90% of total login attempts to online shops and businesses in 2018 were illegitimate hacking attempts. To prevent hacking attempts like this one, payment gateways are essential, especially for small-sized businesses.
Among the main advantages that both big and small businesses and eCommerce sites can gain from using a payment gateway include:
1. Accepts credit, debit, and other alternative online payment methods
For merchants and owners, a payment gateway enables them to accept and process payments done using credit cards and debit cards. It likewise paves the way for businesses to welcome other available modes of online payment. The expanded payment options make it easier for business owners to cater to different buyer needs and demands.
2. Lessens credit card fraud
Payment gateways are used mainly to minimize the instance and possibility of online payment fraud. Payment fraud is often encountered by online businesses and retailers during transactions that involve the use of credit cards to receive payment from customers. A payment gateway equips businesses with special security features that ensure both the operators and the buyers of a secure method of processing information, money and the overall transaction.
3. Seamless site navigation
Some payment gateways come with a feature that lets businesses design pages for customer checkouts. This way, customers no longer need to be redirected to another page when processing their orders and payments.
4. Secured customer data
Payment gateways reinforce the security and encryption of customer information. The boost in customer security makes it a highly recommended layer of protection against online fraud to online businesses. Businesses employing payment gateways often gain favorable feedback from most of their customers.
5. Easy to install and maintain
A payment gateway does not require regular maintenance and a high installation fee because it can be fully automated. Most payment gateways only require businesses to create an account to activate the software. Additional updates on the software are often scheduled, and businesses are prompted with notifications to upgrade their existing payment gateway.
Most payment gateways follow these steps in a regular transaction:
- Encryption– Data or information exchanged between merchants and customers will be encoded in securely by the payment gateway.
- Request– Approval from the bank issuing the credit card is acquired by the payment processor. Consulting with the issuing bank helps check whether there are issues with the credit card being used or not
- Fulfillment– Payments authorized or approved by the issuing bank signals the transaction to carry on and move to the next phase.
At times, payment gateways can also monitor customer orders, employ geolocation for certain processes in transactions and customer purchases that involve checking locations. It can even gauge the costs of taxes in some states or areas.
Locating the best payment gateway
There are several payment gateway service providers available, and it is the responsibility of online business owners to determine and choose a payment gateway that best suits the needs of both their business and their customers. They must also take into consideration the security of their website.
Efficient payment gateways should possess SSL certificates from authorized institutions in-charge of verifying the gateway’s qualifications for operating. Payment gateways must also be PCI-compliant and uphold practices that guarantee information security and privacy in all transactions.
By carefully choosing a reliable and suitable payment gateway, the success of an online business can be ensured while customer satisfaction is duly met. If it helps, business owners can also create a checklist that details the needs of their business and customers, along with their company’s past mistakes in online transactions.