If you own an ecommerce business for sure you will need a payment gateway in order to accept payments from your customers. Choosing the right payment gateway can be generally a frustrating practice but in the end you will have happily returning customers.
What is a payment gateway?
A payment gateway is an ecommerce application service provider service that authorizes payments and that processes the payments securely between your business and merchant account. The payment gateway is the equivalent of a physical point of sale terminal located in most retail stores. Payment gateways will protect your credit card by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor system. A payment gateway is the best way that allows you to automatically process credit and debit cards or other forms of payment securely.
The payment gateway facilitates the transfer of information between a payment portal (such as a ecommerce website, mobile phone or interactive voice response service) and the Front End Processor or acquiring bank. This process allows you to choose from a vast variety of payment methods (such as Visa, MasterCard and Paypal) that you want to accept from your business customers.
There are different types of payment gateways to choose for your online business:
- Hosted Payment Gateways
Hosted payment gateways will take a customer off from your website’s checkout page. Once the user clicks payment button at your website, user will be redirected to the payment service provider page. On this page the user will feel his payment details. Once the customer has paid, he will be redirected back to your website to finish the checkout process.
- Self-Hosted Payment Gateways
Here you need to ask the payment details from users, at your own website. After asking the details, you need to send the collected data to the Payment Gateway’s url.
- API / Non Hosted Payment Gateways
Some merchants wants fully control on their checkout process and don’t want to direct customers from their checkout page to another page. This type of payment gateway allows customers to enter their credit or debit card information directly on your checkout page and process payments using their API’s.
- Local bank integration
This type of payment gateway is also considered as hosted payment gateway. here, the user will be redirect to Payment Gateway’s website and there he will fill the payment details and contact details. After making payment the user will be redirected back to your website and notification data is also sent with redirection.
- Direct Payment Gateway
In some cases, the payment processor doesn’t support Instant payment notification. They create profile and deduct the required amount from the user’s credit card on scheduled basis but do not inform the system. They just inform if credit card is approved or not. The system in this case, needs to make an inquiry on regular interval to the payment processor that whether the required payment is received or not.
Having a payment gateway for your online business is very beneficent because online payment gateways are a safe and secure method of processing card transactions and also you can give your customers the options to pay in their country currency.
When you choose a payment gateway for your business you need to take in consideration, beside the payments gateway types, also other dependent things like price, transaction fees, supported countries, what product you want to sell. Choose what is best for your business!