Payment gateways are one of the most reliable and secure tools for a safer shopping with Ecommerce Transactions experience online. They help both merchants and customers by offering speed, reliability, and a secure environment to conduct business that raises the overall profile of the business.
So, if you are an online merchant, you must be familiar with some of the popular payment gateways and how they are helping online businesses reach their full potential.
The higher the quality of the payment gateway, the better it is at fending off real-time attacks by acting as a buffer of encryption between you and the buyer. Moreover, they can also be helpful when it comes to reducing load times.
So, how do you select a payment gateway that does all of it and more? One that will maximize convenience while reducing the overall risk for your customers in Ecommerce Transactions.
What is a Payment Gateway, Ecommerce Transactions?
A payment gateway is a service that acts as a bridge between the merchant and the customer to process card payments for both online and brick-and-mortar stores. It is responsible for providing an error-free and seamless checkout experience.
Primary Functions of a Payment Gateway
A gateway’s primary functions include the following:
- Encryption: It encrypts all communication between a user’s browser and the retailer’s server to secure the data being transmitted between the two parties.
- Request: Whenever a payment processor gets approval from the credit card company or financial institution that issued the card, an authorization is made to proceed with the transaction.
- Fulfillment: Once the payment gateway receives authorization, it gives the go-ahead to the website and interface to proceed with the next steps.
Apart from these three primary functions, a payment gateway system also performs additional responsibilities such as screening orders, calculating tax costs, and verifying the geolocation to perform location-specific actions.
Payment Processor Vs. Payment Gateway
These two terms are often used interchangeably; however, they are different. Let’s look at a few key differences between a payment gateway and a payment processor.
- Payment Processor: It’s responsible for analyzing and transmitting transaction data. This data includes all the relevant information, such as credit/debit card data linked to a bank account required by the issuing bank.
- Payment Gateway: The payment gateway is also responsible for performing the tasks above; however, additionally, it also authorizes fund transfers between the buyer and seller.
Types of Payment Gateways
There are three types of payment gateways. Let’s have a brief look at them.
A redirected gateway provides convenience and security to retailers as they are linked to reputed payment gateways that process the information outside of the merchant website; however, this kind of gateway doesn’t offer much customization to the merchant.
- Checkout On-Site, Payment Off-Site
In this payment gateway system, the checkout happens on the merchant’s site; however, all payment processing happens at the service provider’s end.
This offers a simplified process compared to the previous option; however, the merchant won’t have any control over the user experience and are primarily at the mercy of the offsite gateway to ensure that the user experience is good enough for revisits.
2. On-Site Payments
This is mainly used by larger businesses that handle all of their payments themselves rather than outsource them to a third-party payment provider. Here, both the checkout and the payment processing happen within the website. This gives the business more flexibility and customization options and controls the entire user journey.
Features of a Payment Gateway – Ecommerce Transactions
Now that you know what a payment gateway is, how it functions, and its types. Let’s have a brief look at a few features of this system.
- Merchant Dashboard: A merchant dashboard helps keep all of your transactions centralized, giving you a bird’s eye view of every transaction. You can access transaction management and bank account management from this section and get notified about every event on the system. This helps you manage your finances and inventory better.
- Saved Payment Instruments: Repeatedly asking your customers to enter their financial details every time they buy from you can annoy them and result in cart abandonment. Therefore, the ability to save payment information is vital for customer acquisition, retention, and trigger repeat visits.
- Accepting International Payments: Payment gateways allow you to sell internationally by accepting online payment gateway services and may support a range of currencies. This can result in a significant boost in your customer base by taking your online international.
- Accept Express Payments: First-time shoppers don’t generally like to register right away and are just looking for a quick way to purchase goods and services. Forcing them to register can result in abandonment of carts and a drop in orders. Payment gateways eliminate redundancies by not requiring customers to enter both billing and shipping details when making a purchase.
- Process Instant Refunds: Instant refunds enhance customers’ overall experience and trust in the brand. Your customers will have more confidence transacting with you via online methods if you are known for instant refunds in case something doesn’t work out.
- Automated Recurring Payments: Automated recurring payments allow you to sell subscription-based services by deducting a specified amount each month/week as per an individual client’s billing cycle without the pesky notifications.
Merchant payment services are making lives easier for online business owners worldwide. So, if you too want to ride on the new waves of success being powered by payment gateways, it’s time to get a reputed payment gateway partner like plural payment gateway onboard. It’s time to begin your journey towards offering customers customized experiences they will never forget!