Payment Gateways - Everything You Need To Know About

Online transaction is the fastest and convenient way to send or receive money. Because of the Internet, everyone can easily sell or buy around the world.

But sometimes Online transactions become difficult to verify.

In order to avoid problems, such as frauds, payment security is important.

One of the best ways to reduce frauds in the online store and prevent security breach is to use Payment Gateway.

What is a Payment Gateway?

A payment gateway is the easiest way for a business to receive digital or online payments from their website or app.

In other words, the Payment Gateways are a means to receive or make the payments. The payment gateway facilitates the transfer of money between buyers and sellers. It allows the e-commerce site to request money from a customer’s bank for products that they have bought.

A payment gateway is a mediator between merchants and customers. It securely takes money from customers and sends it to the merchant’s bank account.

How does it work?

Payment Gateway plays an important role in processing and approving the payment transactions between merchant and customers.

It encrypts sensitive information like credit card details etc. It is a guarantee that information passed securely between merchant and consumer.

The payment gateway performs various functions to complete the transaction.

Here are some basics steps:-

1. Customer places an order

   A Customer will place an order on the website that they visit either by clicking “BUY NOW” or any equivalent option.

2. Encryption of Information

   If the order is via a website, the customer’s web browser encrypts the data to be sent to the merchant’s web server.

3. Merchant securely transfers the order information to the payment gateway. Customers will pay with their preferred method of payment. Then the transaction is passed to the issuing bank.
4. After the authentication process is completed, the transaction is then approved or declined by the bank, depending on the situation.
5. Payment Gateway sends the message to the merchant accordingly.
6. The bank settles the money to Payment Gateway and the payment gateway settles the money to the merchant.

Why is a Payment Gateway important??

Payment gateway services are necessary for all online credit card processing.
The Payment gateways work with your purchase items from the retailer. So, the main role of a payment gateway is to approve transactions between you and your customers.
Without authentication, the transaction process cannot go forward and you won’t receive your money.
To lessen technical errors, it is necessary to have a gateway that brings together in a single platform the different channels through which the user could reach.
A payment gateway is a tool that enables your customers to purchase goods or services from your website without having you manually key-in any payment information.
The Payment Gateways maintain security by following an obligation for the same and thus, the data of the customer is encrypted in a safe manner.
Payment Gateways lessen fraud and ensure customer data encryption, by using advanced tools that detect fraudulent characteristics in transactions, whilst ensuring a logical shopping experience, which positively impacts customers’ trust, and if incorporated correctly, minimizes shopping cart abandonment.
The main role of the payment gateway is to support the transaction between you and your clients.
A payment processor dissects and moves transaction data. It confirms the transaction of funds among purchasers and merchants.
It helps merchants make informed decisions, by creating auto-generated performance reports, which help businesses improve their operational level of efficiency, and make prompt decisions.

Following are main Advantages of Payment Gateway:-

1. Various Payment Methods:-

For merchants, a payment Gateway facilitates them to accept process payments done using credit cards and debit cards.

2. Lessen credit card fraud

Payment gateways are used mainly to decrease the instance and possibility of online payment fraud. Payment fraud is often detected by online businesses and retailers during transactions that involve the use of credit cards to receive payment from customers.

3. Ordered Site Navigation

Some Payment Gateway comes up with a feature that allows the merchant to design their payment page.

4. Easy to install and maintain

A Payment Gateway does not need regular maintenance and a high installation fee because it can be fully automated.

5. Secured Data

Payment gateways strengthen the security and encryption of customer information. The expansion in customer security makes it a highly recommended layer of protection against online fraud to online businesses.

A payment gateway offers an experience that allows your customers to make purchases via multiple channels and with any multiple forms of payment.