What are Payment Gateways for Online Business?
Payment gateways enable businesses to handle electronic payments. Necessary to accepting credit cards, debit cards and other types of electronic payments, payment gateways work between the merchant account, payment processor and card network to complete a transaction.
Though payment gateways are not a tangible object, it can be helpful to think of them like one to better understand their role in payment processing. An excellent example is a cell phone. Like a cell phone, a payment gateway stands as a portal that communication passes through. Instead of texts, emails, and phone calls, a payment gateway passes payment information between the business, card network and payment processor to complete the transaction.
For many businesses, selecting a payment gateway is dependent on the needs and operational style of the business. For online businesses, the right payment gateway for eCommerce can make a significant difference in the early stages of operations and in years to come. Within the content below, you will gather an adequate understanding of payment gateways – better positioning you for online business success.
The Role of the Payment Gateway in Online Payments
When an online payment is initiated, a payment gateway authorizes the transaction, securely encrypts it, and submits it for processing. As the communication portal between the business and the customer when an electronic payment is submitted, payment gateways handle a significant amount of information needed for online purchases. Depending on the method of electronic payment, the information transmitted through a payment gateway may differ.
In the case of a direct-debit or electronic check transaction, a funds request is sent to the payer’s bank and if sufficient funds are available, the funds are deposited into the payee’s bank account. For credit card transactions, an authorization request is sent to the card-issuing bank to verify that the card is valid. The transaction is then submitted to the credit card processor who deposits the funds into the merchant’s bank account. Should the authorization request fail and the deposit not complete, an error code is transferred through the gateway to the merchant; providing reason to what went wrong. Knowing that highly sensitive information is carried through a payment gateway, it is very important to consider network security along with other critical elements when selecting the appropriate payment gateway for your online business.
Selecting a Payment Gateway: What to Consider for Online Business
Prior to selecting a payment gateway for online business, it is important to understand all components of the gateway. Understanding these critical components can significantly help with the evaluation and selection of a payment gateway for online business.
When handling credit card transactions of any kind, businesses are required to adhere to the PCI DSS (Payment Card Industry Security Standard) – ensuring the security of customer information. With requirements varying by business size and types of payments processed, working with a payment gateway provider that meets the highest PCI DSS standards is possibly the most important factor to evaluate early on.
Fraudulent Activity Protection
Ineffective or lack of fraud protection with an online business can result in chargeback fees, missing merchandise and other undesirable outcomes. All of which can easily be avoided with a payment gateway provider that meets the fraud protection and prevention needs of your business. Overlooking this criteria could lead to significant monetary losses down the line.
When selecting a payment gateway provider, flexibility around payment capabilities can be extremely useful – providing the ability to streamline business systems and prevent unnecessary tech investments. For instance, knowing that your business wants to accept credit and debit cards now, but add eChecks later, can help determine if a specific gateway provider is right for you. Additionally, being able to process payments in various ways, such as one-time and recurring, could be a deciding factor for online payment gateway selection.
When customers navigate through a website payment or mobile payment experience that they enjoy, they are more likely to come back. When thinking about how the payment gateway affects this, it is best to think of the gateway as the area on a business website or mobile application where payments are made. As a business, it is helpful to think about what experience you would like your customers to have when going through the payment process. Perhaps you want payments to be completed within a form on your site and also work within a mobile application. Or maybe you prefer a payment button that opens up a web form for payments. Deciding on what you would like is important because some payment gateways may not allow for certain capabilities. As an important area of customer interaction, providing a seamless and hassle-free payment experience is key.
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Additional Merchant Services
Once your payment requirements are determined, it is beneficial to know if a payment gateway provider offers additional merchant services. The ability to work with one party to provide a consolidated payment gateway and other essential elements, such as a merchant account or POS system, can make it easier to manage the day-to-day operations of an online business.
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PaySimple’s Payment Gateway
For businesses accepting payments online and or in-person, the PaySimple payment gateway provides considerable value. Capable of handling credit cards, debit cards, eChecks, and ACH transfers, the PaySimple payment gateway is intelligently flexible – meeting the needs of the business and the end customers’ desire for multiple payment options. Through PaySimple’s gateway, businesses are able to accept payment from their customers in the way that is most convenient to them and without additional cost. In-person, online, mobile and integration capabilities eliminate the need to work with multiple providers, saving time and capital investment.
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For businesses interested in recurring payment functionality, the PaySimple gateway is a great fit. Subscriptions, membership fees and automated payment scheduling can all be handled with the PaySimple gateway – eliminating the need to purchase an additional recurring billing tool.
With a dedicated merchant account provided alongside the payment gateway, businesses of PaySimple traditionally favor the cost-effectiveness delivered by the platform.
The PaySimple gateway, merchant account and additional merchant services are supported by the dedicated, U.S. based customer care team. This level of support and extensive solution offering delivers operational efficiencies to over 20,000 businesses nationwide.
Security standards within the PaySimple gateway are one of the most advanced in the market, ensuring customer information is appropriately handled within PCI-DSS compliance guidelines at all times.
Depending on what your business is aiming to achieve with payment acceptance, speaking with a PaySimple Product Expert can help determine if our gateway is right for you. To learn more about the PaySimple payment gateway and additional merchant services, contact us.