Payment gateway is an application on an e-commerce website that allows the website to link the client payment account with the website’s account. Payment gateways allows for the credit account details to be secure instead being sent online. That notwithstanding transfer of money is far much faster and eases the hassle involved. Online shopping has become a breeze with payment gateways. There are various payment gateways that exist out there and it takes a discerning eye to know the best option out there. Currently, PayPal and WorldPay are some of the most popular payment gateways.
Categories of payment gateways: There are two major categories of payment gateways:
HOSTED & SHARED GATEWAYS
Hosted Payment Gateways: Hosted Payment Gateways are those that direct your user away from your ecommerce website. While making payments, the customer is redirected to the real gateway page by clicking the gateway link. This leaves your website for some time before returning back. The benefit of these gateways is that you do not need a Merchant ID since no confidential details are needed from your website.
Examples here include PayPal, WorldPay and Nochex.
Shared Payment Gateway: While making the payments, a customer is directed to the payment page and not out of your website. Here, a Post form is used once one clicks on a payment link/button. The payment page is maintained securely by the payment gateway. After all details about credit card and other required fields are complete, the user fully gets back to the main website. The main benefit is that one does not get away from your website thus fast and easy to use.
Example of a gateway is eWay.
Secure Transaction: A payment gateway checks and validates online transactions. It protects merchants and customers from flagrant instances of fraud.
Ease Of Use: Anyone with basic computer knowledge can perform business transactions using payment gateways. No need to go through any costly training or learn elaborate setup. It’s simple and easy… Everybody can use it.
Rapid Deployment: A merchant can immediately utilize payment gateway service for his/her online store. He need not wait for agonizing time to complete the payment gateway setup in his business. He can avail it in the quickest time possible.
Feature-Rich: Internet payment gateways offer lots of customizable features that could greatly benefit merchants and customers alike. There are security features, payment option choices, card features, etc.…You may turn on all these features or select only the ones that best serve your type of business. Contrary to common notion, payment gateways have some drawbacks, too. It can be likened to a double-edge sword that, when mishandled, can do significant financial damage to merchants as well as to customers.
Risk On Sensitive Information: Remember that a payment gateway deals with customers’ information. Therefore, a payment gateway company will have files on all sensitive customers’ data- customers’ names, banks accounts, credit card numbers, passwords, etc. These are highly valuable data. Crooked and dishonest people will be more than eager to pay huge sums of money just to access this sensitive information. The payment gateway companies can potentially sell these data to interested parties without the customers knowing about it.
Any Technical Glitch Can Take Considerable Troubleshooting Time: A payment gateway is basically a software. And just like any piece of computer software, it can go awry at times. When it does, it can have deleterious effects. The customers can no longer access or make payments online. On the other hand, the software glitch will render merchants’ websites inoperative. It will take time maybe weeks or months to troubleshoot the problem and bring back merchants websites back to normal functionality.
Customers’ Uneasiness: Fraud is widespread in the Net and this fact scares most customers. They tend to stay away from any web-based software when making online transactions that involve disclosing personal information. If a merchant company gets a payment gateway service but the customers will not utilize it for some reasons or another, then the merchant will be at the losing end of the bargain.
Even though there are a number of options in terms of online payment processing gateways, one should be careful to consider some key factors. Among the most significant considerations are setup fee, security of customer information and transactions, time taken to process payments, flexibility of currencies and various countries. Another important factor to consider is transaction rates. This includes withdrawal and transfer charges as well as exchange charges.
- Payment gate is essential on a website as it’s convenient for customers.
- It’s easy to integrate.
- Very little testing that needs to be done.
- Development time is minimal, which saves you money.
- Some great options like saving card information for later, recurring billing and other great features can be used.
- Now Payment Gateways come equipped with fraud protection systems.
- Card information is secure as it stays with the bank this data is kept on bank servers, which makes getting PCI compliance even easier.