If you are a merchant and want to sell your products to the world, you need a payment gateway. You don't need to learn every tiny detail about payment gateways as a merchant, but it is always good to know about it. Accepting payments from customers is sometimes not that easy as it seems.
However, it is also not that yet complicated. Online payments are an integral part of our lives now as consumers, but we need to know how to choose because there are tons of options, and it is natural to get confused.
Let's move ahead with it.
What Is A Payment Gateway?
A payment gateway is a bridge that connects your bank account to the platform or website where you need to transfer the money.
A payment gateway securely captures the customer's bank account details, ensures that the funds are available, and transfers them to the merchant's bank account. It encrypts the card details and ensures that every detail is transferred securely to the merchant's bank account.
To make it more simple, a payment gateway is a middleman between the seller and the buyer. Like a middleman never reveals any sensitive information to either of the parties, a payment gateway does the same.
Now at least we are clear on the part of what is a payment gateway but the next imperative thing to understand is that how does it work?
How Do They Work?
Payment gateway focuses on securing the information that is captured from the user during the entire process. But this process involves other steps as well.
Step 01: When a customer clicks on checkout for the order, the e-commerce store or website takes the customer to the payment gateway page. There he or she enters details that are needed for the successful transaction.
Step 02: After that process, the payment gateways take the customer to the authorized bank's page and asks for approving the payment.
Step 03: After the bank authorizes the transaction, it checks if you have a sufficient amount of money to continue the transaction or not?
Step 04: The payment gateway sends the merchant as per the results. If it is a yes, then it shows that your order is placed, but if it is a no, then it indicates that there is some issue with your bank, and your order gets cancelled.
So this is how a payment gateway would work for your e-commerce store. Don't start searching for great payment gateways for you yet. Because you will find a never-ending list for that. You will end up getting more confused now than ever.
Let me help you in understanding how can you choose the ideal payment gateway for your business.
Choosing the Perfect Payment Gateway for Your Business
Selecting the correct type of payment gateway for your business is a crucial decision, and you must consider these factors before you choose anyone.
This is a huge and vital factor while choosing a payment gateway for your business. While you are selecting the one, you should consider both volume and the value of your sales.
For example, if your business deals with high-value transactions, then you should look for those payment gateways that have their set of monthly fees and charge lower transaction costs. In case you don't, you will lose a considerable amount of money to the payment gateways.
2. Types of Card Allowed
You don't want to choose a payment gateway that doesn't allow the majority of the cards your customers' cards.
Most of them allow Mastercard, Visa, and American Express. So make sure that you don't choose one that won't let your customers purchase your products or services.
If you end up selecting the wrong payment gateway, it will be straight saying no to the money and a loyal customer.
3. Currency Support
If you sell your products internationally, make sure that the gateway you choose supports multiple currencies from different countries.
But also make sure that you check the percentage of fees involved for the payment of international currency.
The last thing you need is that you choose to select one with bulky international transaction costs.
You cannot compromise with this factor. The security of your users should be of utmost importance for you.
Different payment gateways follow different security standards. Some gateways also come with fraud detection and various other screening tools that helps in protecting your business from any sort of fraudulent activities.
Security is something that even your customer would prefer; they don't want to purchase from any store that doesn't even care about their security.
5. Integration With Other Systems
Imagine you did all the work of selecting the right payment gateway only to find out that it doesn't integrate with your accounting software.
It is also essential so that you can keep track of all the payments in a single place without struggling to update everything by yourself.
There are a lot of payment gateways that integrate with various accounting and invoicing software.
Using the right payment gateway makes it easier for your customer to pay and collect for you. It is a win-win situation. However, finding a payment gateway that fits the shoe ideally will need a bit of hard work.
Remember that adding the option for payment is crucial before you launch your products and services. Once it is sorted, you can go with full speed, knowing that you don't have to stress on the payments.