Published April 29, 2022
In the age of digital transformation, ecommerce has gone from the realm of major corporations to something embraced by everyone. Even the smallest business can now sell online expanding their market from their local town to worldwide. The key to doing this is payment gateways, but while they can look simple on the outside, choosing the right one for your business can be a complicated decision.
Payment gateways are the way in which merchants take and authorize payments. They take payment details and check with the bank that the person has enough funds available to make the transaction. Once that’s verified, it gives the go ahead and processes the transaction.
In ecommerce, they are the equivalent of a point of sale terminal you would see in the grocery store, retail outlet, or restaurant. The customer inputs his or her credit card details, which securely passes the information between point of sale and the merchant and then between the merchant and the bank.
Payment gateways vary in nature and make up. They may come from different providers but they all follow the same broad approach.
1. Collection: This is the point at which your customer navigates to the check out on your website and enters their credit or debit card details. The payment page will then pass the data to the payment services provider.
2. Transfer: Once the details have been entered, the payment gateway securely transfers your customer’s details to your payment processor or merchant bank.
3. Verification and authorization: From here, the details make their way through to the customer’s issuing bank which will signal whether or not that person has enough funds. That data works its way all the way back to inform the customer about whether their payment has been approved or not.
This process will include several different parties.
1. Merchant account: This is a particular type of account used to accept credit or debit card payments. Funds will be temporarily held here before being passed on to your own business bank account.
2. Payment processor: They provide services to businesses to help you get paid. They may provide both a merchant account and a payment gateway to help you process and manage all your payments.
3. The issuing bank: This will be the bank of the card holder. They will have to authorize the payments and send money.
Each of these parties will play a role in managing the payments and transferring data from the customer into your bank account. It’s a complex process, involving many different parties, performing many different tasks. The important thing is that from the outside, everything looks quick and simple. Your customer selects a product, makes a payment and quickly learns if it has been accepted. The quicker that happens, the better it is for your business.
Payment gateways come with several advantages.
For any business looking to grow, an effective payment gateway is a must have. It opens up a host of opportunities and helps you engage with customers in the way they want. However, choosing the right payment provider can be a challenge.
Different payment gateways from different providers can vary greatly in terms of their features, cost and the way they work. Some will be better suited to larger merchants, while others will be perfect for smaller enterprises.
The biggest question many people will look at is cost. Each of those parties involved in the process will want payments for their efforts. They may come with one time set up fees, monthly costs and transaction fees. These can often be bundled up so it’s not always easy to see what you’re paying for and from who.
Security is crucial. An end to end payment gateway should provide elevated levels of security and encryption, but it’s wise to check their security rating.
Payment gateways are judged on their PCI Compliance level. In order to be safe, you should only consider those payment gateways which have PCI DSS Level 1. Whenever you’re using any third-party service, you have a responsibility to ensure they are safe and meet all data protection requirements. Any breach in their data could leave you liable, even if the problem is down to an issue with their systems.
Aside from that you may want to consider factors such as:
As we move into a digitally mobile future, the way in which people interact with businesses and pay for services is constantly evolving. Speed and agility are key to everything, and this applies to payment gateways. More and more businesses are adopting end-to-end payment processing to deliver smarter, faster and more convenient forms of payments.
The problem with payment gateways is that they involve many different parties, each of which expect payment and need to be managed differently. From the merchant bank to the payment processor and the gateway provider, bringing this all together into one end-to-end payment gateway simplifies the entire process.
Many providers will claim to offer end-to-end payment processing but not all of them can really do it. However, those, such as NCR, can offer the benefit of cutting-edge technology, enhanced security control and profitability.
End-to-end payment providers use APIs to gather information from all the different parties involved with the payment gateway and process this within one single platform. It delivers omnichannel payments by centralizing all payment methods into one application and providing enhanced monitoring and visibility of the process.
The entire solution is housed under one roof making the process as seamless as possible. It manages the different providers giving one source of contact and support. With traditional approaches, for example, merchants could spend hours sorting problems relating to their payment gateways and the different people involved. This sucks up time which could have been more profitably used on other tasks. A fully integrated end-to-end payment solution handles all this for you, freeing you up to concentrate on other duties.
A payment gateway, will handle a host of complicated functions, but will need to be plain, simple and intuitive to use . It’s not an easy take, but those which do will give your business a gateway to a host of exciting opportunities.