E-commerce is a type of transaction or activity that occurs as a result of exchange of business or services. World wide web and emails are known to be the modern e-commerce. Online shopping is one of the kinds of e-commerce where internet or any gadgets are mainly used. E-commerce can be found in various activities such as online banking, online sales, mobile commerce and internet marketing but we cannot ignore the fact that payment gateway plays a critical role in ecommerce development service.
What is a payment gateway? It is basically a process through which all your credit card transactions can be processed on e-commerce store by establishing a connection with the credit card provider. It is basically a simple software application which connects ecommerce websites with the bank. This facilitation involves a process whereby a customer’s credit/debit card payment is authorized by the bank upon any purchase of product/service through an e-commerce platform. The different types of transactions that can be processed through payment gateway include debit/credit card, eCheck, PayPal, Payoneer and even cryptocurrencies that includes bitcoin.
In order to make money online, you need to sell and in order to sell, you need to make your products and services readily available to your customers anytime and anywhere. When that’s done, you should also enable your customers to make payment for the products as conveniently as they have made the purchase. Without it, you will not be able to charge your customers when they make purchases from your website. A payment gateway here plays its role as it allows you to sell and earn money on a real time basis. Therefore, it is extremely important for e-commerce merchants to understand how a payment gateway works and how it can add value to their businesses.
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Payment gateway replicates the process of point of service where you pay and receive your services and products. On the internet, payment gateway basically approves the transaction between you and your customer and gives you the assurance that you will be paid. You should be well-aware of the fact that without payment gateway, your transaction will not be processed and hence you will not receive the money.
Since online shopping has become increasingly popular, there are some small organizations that face challenges on the web. With payment gateway, your online business will be secured from fraudulent activities. Furthermore, your payment systems will be protected from extortion and security dangers.
When you experience online shopping, all you do is visit your favorite e-commerce store, select the items, add them to your cart and proceed to payment and you are done! You just have to wait for your delivery to arrive. This seems simple; however, things are not as simple and easy behind the scene. There is a complicated procedure that follows. Firstly, when a customer is directed to the payment section, they feed in their details and their payment gets processed as a “card-not-present” transaction. Upon submission, the data is encrypted and send forward to the vendor’s web server and then to the payment processor.
Then comes the second step where the encrypted information is further shared to the credit card association. A fixed amount of fee is charged by these card associations. The transaction is then reviewed by card’s issuing bank and is accordingly approved or declined. Card holder’s bank basically ensure that the card is valid and has enough funds to make the requested payment.
Lastly, processor then transmits the authorization back to the online store and customer through payment gateway. This seemingly complicated and lengthy activity only takes a few seconds to complete the transaction.
In order to set up a payment gateway, you need to fulfil certain requirements. Firstly, a legally set up business should be in place. You should have a tax ID, also known as EIN. You will require a verified business bank account and set up a website. When opening a bank account, confirm if your bank provides merchant facility. This will allow a payment gateway to establish connection with your bank. You may also hire payment gateway providers to help you in setting up your account correctly. Since they are experts in this area, they will assist your business website to establish secure connection with your bank accounts using specialized software. Since integration of payment gateway into e-commerce website is a complicated procedure, it is advisable to use services of an experienced developer.
You will find a number of providers that can setup a payment gateway for your online business. But before choosing the service provider, there are some factors that you should keep in consideration.
Firstly, you should give priority to a secure network when hunting for a payment gateway provider. You should ensure that the financial information of your customers is not compromised as this is how you built trust with your customers.
Internet and online shopping have helped people save a lot of time. Organizations or small enterprises are coming up with innovative ideas to further improve their customer experience. One such customer experience is speedy process of payment. If your e-commerce store asks for too much personal information and has too many steps, then customers would abandon their purchase and look for alternative ways of purchasing. Hence it is recommended to look for service provider who can smartly set up payment gateway that integrates all major cards with shopping carts.
E-commerce lets you expand your sales internationally, hence opt for a payment gateway that allows for international acceptance. Give your customers a wonderful and speedy shopping experience at your e-commerce site with payment gateway and take your business to new heights.
