What Are eCommerce Payment Gateways?

Apr 05, 2022

Thanks to the massive surge of e-Commerce, the payment landscape has answered the call to provide the industry with safe, effective, and seamless payment solutions for a more demanding customer base. 

Current trends show that e-Commerce sales at the global level are expected to reach $4.2 billion. The pressure is on for e-Commerce business owners to keep pace with this rapidly evolving industry, delivering a smooth customer payment experience. 

What Is A Payment Gateway?

A payment gateway is essentially a software application that facilitates the secure transfer of sensitive credit card data from a business website to the credit card payment network for final payment processing. 

The primary role of payment gateways is to make credit card processing secure, efficient, and convenient. A payment gateway does not transfer payments, rather, it approves the funds that are sent to the seller. It does this in the safest and most secure manner. 

How Does It Work?

In order to prevent fraud, payment gateways follow the PCI compliance standards to ensure all customer credit card information is kept safe and protect it from potential fraud. 

In order to complete the processing of credit card transactions, there are many steps that payment gateways go through:

1. The entire operation begins as soon as the customer places an order and enters their credit card information on the e-Commerce website.

2. The web browser encodes the information to be sent between it and the merchant’s web server.

3. The payment gateway transfers the transaction information to the payment processor used by the merchant’s acquiring bank.

4. The payment processor sends the transaction information to the card affiliation.

5. The credit card issuing bank sees the approval request and either approves or denies it.

6. The processor forwards an approval tied to the merchant and the customer to the gateway.

7. When the gateway acquires the decision, it transfers it to the site or interfaces in order to process the payment.

8. Once the merchant has completed the transaction, “Clearing Transactions” is activated.

9. The final step is that the issuing bank changes the “auth-hold” to a debit. This allows a settlement with the vendors’ securing bank. 

How To Choose The Best e-Commerce Payment Gateway

Depending on the requirements for your particular e-Commerce business, there are a few factors to consider before you make your selection for a payment gateway. Here are just a few:

1. It Must Be Scalable

It goes without saying that the tools you use for your business must allow for it to grow. This includes an appropriate payment flow. Your site must have an integrated payment form to send all necessary data to a secure payment gateway. Customers can also be redirected to a hosted payment page that is secure. 

2. Get The Right Product 

The options for payment gateways are endless. However, it is not a one-size-fits-all type of solution. Ensure that the payment gateway you choose suits your business best and that it accepts the type of payment methods that you and your customers prefer. 

3. Ensure The Security Of Your Customers

In order to win the loyalty of your customers, they must know that shopping on your website is safe and secure. Make certain that your payment gateway comes with the following security measures such as PCI-DSS. This standard is mandated by the Payment Card Industry Security Standards Council. 

4. Compare Fee Structures

There are many factors that play into the pricing of a payment gateway, such as revenue consistency, business sales, transaction frequency, and the type of markets served. 

Certain providers may require setup fees and contracts. Or, if a certain volume is not met, they can also charge transaction fees. 

Do Your Homework

The number of payment gateway providers is certainly not lacking. It’s about doing your research and knowing the needs of your business and customers to make your final decision.   

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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