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.