Adoption of digital payment methods chosen over cash or other modes of transactions is on the rise.
Digital finance and payment methods are powerful tools of improving sales and business for e-commerce merchants.
Unfortunately a lot of merchants are unaware of such advantages and only 40% of merchants are aware and benefiting from this facility.
This article breaks down the significance, uses, and suitability of an online payment gateway for potential or existing online retailers. Read further to learn how payment gateways work and how you can choose the right payment gateway for your business.
What is a payment gateway?
An online payment gateway authorizes transactions for e-businesses, online retailers, or traditional brick and mortar stores. It is used to transfer information between a payment portal and an acquiring bank. Payment gateways encode private information such as credit card details, to keep the information transfer between a customer and merchant secure.
How do payment gateways work?
A payment gateway first pulls information from a credit card transaction, encrypts this information, directs this information to the credit card processor, where the transaction is finally approved or declined. This is a seamless process between you and your customer via your shopping cart and a secure connection.
Why should I use a payment gateway?
Payment gateways are vital for keeping online transactions secure. They can be integrated with most websites and shopping carts online, to streamline online credit card processing. A shopping cart is usually used before the payment gateway. This allows customers to choose items they want to purchase and at the checkout, the shopping cart totals the items, adds tax and shipping and collects customer’s shipping and billing information.
How do I choose the best payment gateway?
Here is a checklist to finding the best payment gateway for your e-business:
Budget of payment gateway
Time of accepting payments
Time of receiving revenue from sales
Security of the gateway
Compatibility with existing integrations
We hope this article was helpful in answering some doubts you may have had around using an online payment gateway.