What are Payment Gateways?
As businesses are shifting towards electronic mediums for distributing their products worldwide, the need for payment gateways has grown further. The need for proper transportation/courier services and payment gateways has become essential tools for businesses worldwide.
A payment gateway is a merchant who acts as a security service provider that processes payments of clients/customers through their credit cards to sellers’ accounts. Today, these payment gateways have a vital role in the E-commerce industry. A few of the most popular payment gateways are PayPal, Square, and Stripe.
How Payment Gateways are Beneficial for E-commerce
People have already been using the services of payment processors; however, both are different. Payments through gateways are much more secure because payment gateways have multiple benefits over other payment systems.
- Being encrypted makes the data more secure.
- The customer’s browser sends the data of the card in an encrypted form to the vendor’s web server.
- Later, the gateway sends the transaction information back to the payment processor of the seller’s bank.
- The payment processor sends the transaction data to the credit card company, and then the request is approved or declined by the bank’s authorities.
Filling the Order:
- The order is accepted or declined by bank authorities depending on the availability of the balance and the bank’s facilities.
- As soon as the gateway gets the response from the bank and vendor, it is transmitted to the website’s payment process interface.
- After this process, the merchant fills the order, and the order is confirmed.
- Although this process seems to belong, it takes fractions of a second.
Factors to Consider Before Deciding on your Payment Gateway
The Cost and your Business Budget
The most important step is looking into the payment gateway fees and comparing them with the features offered by using them. You must adopt a bookkeeping method to record and compare the fees. The merchant needs to look into three important factors:
- One-time fee: the initial investment price of the services of the payment gateway providers
- Transaction fees rate calculated on per transaction basis: percentage of the total transaction
- Maintenance charged: the online, operational cost charged by the payment gateway providers
Is the Payment Method Secure?
It is important to ensure that the payment method is secure and customers’ data is not misused by any means. This can be done by incorporating:
- 128-bit Encryption
- PCI DSS Compliance
- PCI DSS Certification
- SSL Certification
- Two-factor Authentication
- Is it Enriching your Customer Service Experience?
- Using logos for familiar services such as visa cards, master cards, etc.
- API integration
- Minimum efforts required by the customers for processing payments
- Modern vs. Classic
Modern payment gateway systems are more user-friendly and enrich the experience of customers. These modern payment gateways do not require merchant accounts for clearing payments. However, they are much more expensive, and the transaction cost is even higher. The classic payment gateway is much cheaper, but it is more of a hassle. It takes longer to set up, and it often performs slower.
Hosted vs. Integrated Gateway
Payment methods can be hosted on your servers as an integrated medium, or they can be hosted off-site. If you have opted for off-site hosting, you are free from the hassle of data security and PCI compliance. Integrated gateways are connected to your e-commerce website through API, and the customer doesn’t need to leave your main store for the payment process. This makes the process smoother and easier.
Planning Recurring Payments
If you are running a business offering recurring subscriptions, you should consider a gateway offering your customers similar features of recurring payments. Manually paying every month will be a huge deal for your customers.
If you are starting up a new venture, you should not hesitate to start with a small package. A small package can offer you the best insight as you can learn what you prefer and later switch to a more modern or integrated payment gateway system.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.