The gateway carries out a series of tasks when a customer orders a product or service from a merchant.
The process works in much the same way as a physical point of sale terminal in a shop or restaurant:. Merchant accounts and Payment Gateways are often thought to be one and the same. The merchant account is the place where the funds are held before they are deposited in your account.
The job of the Payment Gateway is simply to approve or decline the transaction. A Hosted Payment Gateway means redirecting customers away from your website to a securely hosted page where the payment can be made. The customer then returns to the website where their order will be confirmed.
A Non-hosted Payment Gateway allows customers to enter their payment details without having to leave the website they are on. A website will typically have to meet certain technical requirements and have an SSL certificate in place to process payments in this way. As your business grows, consider setting up your own merchant account, but do the calculations to determine the best option for your business. Cash flow By definition, there is a delay between when payments go into a merchant account and when you actually receive it in your business account.
The delay will vary depending on your choices of payment gateway and merchant account option. Make sure you know exactly what to expect so you can allow for it. Read more about the fees you have to consider in our blog about How to choose the best e-commerce payment gateway for your business.
There is always some risk involved in making online payments, both for customers and for merchants. The key is to do what you can to help customers feel safe, while taking care of your obligation to protect their details. There are essentially three issues to look out for and understand whether you or the payment gateway is responsible:. Receiving and sending customer payment details A SSL ensures that when you send payment details to the payment gateway, they are encrypted and secure.
Make sure that your website development company can provide a SSL certificate for your full site — not just your shopping cart. Further, display your SSL badge or logo on your site and specifically at check-out — see the Takealot example below. Assure the customer that their details are safe. When designing your check-out process, you have several options for where customers enter their banking details.
There is a major rule in any business: making it as easy as possible for your customers to pay is important for increasing sales. But what exactly happens between your client sending payment and you getting paid? Actually, for that, you can thank payment gateways. Besides technical details, you have to consider convenience for clients and select a service that integrates easily with your existing platform.
In this article, we will explain the basics of payment gateway and explain how to choose a payment gateway provider that will serve the needs of your company. From a technical standpoint, an online payment gateway is a software that allows a merchant e. While most online payments commonly refer to processing credit cards, the advanced payment gateways are able to combine different payment methods, such as e-wallets or more recently crypto payments into a unitary interface, accounting for a flawless payment experience for shoppers regardless of their chosen payment options.
In this sense, there are standards and entities which regulate and evaluate the security level of such a software solution, such as strong customer authentication SCA under the revised Payment Services Directive PSD2. When looking for the payment gateway, you should initially acknowledge whether a gateway is available in your home market as it both needs to meet the local regulations and support the more common payment methods in your area. You may find that some of them may focus solely on EU markets and merchants.
With its well-established infrastructure in local markets, Unlimint can offer you more than payment methods. Once a customer has filled a shopping cart with desired items, they arrive at the checkout — the place where the payment process begins. Although the entire payment process happens in mere seconds, what happens in the background may seem quite complicated:.
During the checkout, a new payment order is created in the system via a payment gateway. Then, the customer has to fill and submit the payment form with the credit card information. Your Practice. Popular Courses. Personal Finance Banking. Table of Contents Expand. What Is a Payment Gateway? How Payment Gateways Work. How a Payment Processor Differs. Example of a Payment Gateway. Payment Gateway FAQs. The Bottom Line. Key Takeaways Payment gateways are the consumer-facing interfaces used to collect payment information.
In physical stores, payment gateways consist of the point of sale POS terminals used to accept credit card information by card or by smartphone. Payment gateways are distinct from payment processors , which use customer information to collect payments on behalf of the merchant. There are also payment gateways to facilitate payment in cryptocurrencies, such as Bitcoin.
Definitions A payment gateway collects customer card information and encrypts it for later processing. Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Terms Chip-and-Signature Card A chip-and-signature card is a type of credit card that encodes its information in a magnetic stripe as well as a square microchip.
Understanding Payments Payment is the transfer of one form of goods, services, or financial assets in exchange for another form of goods, services, or financial assets.
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