A payment gateway will authorize the transfer of funds between buyers and sellers. It allows the e-commerce site to request money from a customer’s bank for products or services that they have purchased. After that assuming it is approved, the payment is then securely transferred to your bank.
Electronic commerce, aka eCommerce, is without a doubt one of the fastest growing industries that has immense potential.
What is a payment gateway and how does it work?
A payment gateway is an e-commerce application that uses secure internet connection to process, verify and accept or decline credit card processing or direct payments on behalf of e-commerce merchants. To ensure that the transaction info passes securely between the shopper and the merchant, payment gateways encrypt sensitive information such as credit card numbers.
When setting up a payment gateway on your e-commerce site, you will need to make several critical decisions. Two of the most important revolve around the type of merchant account you choose and always ensuring that your customers’ payments are secure. We will discuss these in more detail below.
Payment gateways facilitate the transfer of transaction details between a payment portal like website or mobile phone and the payment processor used by acquiring bank.
Why is it important for your business?
Once you know what the available options are, a high-level online payment systems comparison should be conducted in order to find a perfect solution.
These days credit card fraud within e-commerce businesses are very common and often make headlines. Payment gateway can help mitigate this and ensure that data of customers are encrypted and is safe and secure.
It is really crucial to diminish fraud but if you try too hard then it you could end up losing business. That’s because if you as an e-commerce business owner reject too many sales conforming to a lot of fraud rules then few legitimate transactions also might get rejected.
Lack of trust and concerns about the safety of transactions is one of the main drivers of cart abandonment. That’s why choosing a secure payment gateway is so important for your online business.
Your choice should also take into account the geography and demographics of your clients. This will help you understand which payment types would they prefer.
3.Help make informed decisions:
With a payment gateway you would make a lot of data-driven decisions as you can easily access reports on settlements and disputes. Hence, it would not only speed up business decisions but also enhance operational efficiency of your e-store.
The financial aspect of your choice is almost as important as the technical. So always explore all available avenues (different gateways as well as various service plans offered by a single provider) before making your final decision.
Make sure there are no hidden fees or plan limitations that might force you to overspend. Most online payment gateways have commission/transaction fees. Also , some might also have monthly or annual subscription fees and a set-up cost.
The quality of customer support (i.e. the medium it uses and the average response/resolution time), offered by your online payment platform can directly impact your business. Thus, you need to find a product you can rely on, especially in the case of an emergency.
Reach out to iPayTotal – to optimize your e-commerce business for success.