Online payments are made thousands of times a second all over the world. There are hundreds of different ways these payments are made, including PayPal and EFT transactions but a large proportional are based on payment gateway technology. A payment gateway allows a connection directly between a website and a bank, meaning that payments can be placed directly on a website and deposited straight into a bank account.
A payment gateway is a server that is dedicated to linking websites and banks so that online credit card transactions can be completed in real-time.
How does a payment gateway work?
Payment gateways work by providing the secure, integral link between a website (web server) and the bank. When credit card details are submitted on a website the payment gateway receives these details and sends them to the bank for verification. The bank then replies with a response; usually either accepted or declined. The payment gateway then sends this response back to the web server when the appropriate message is displayed to the user - for example "Your payment has been successful".
The actual process is a lot more complex than this and the technical details can be found here
What is required for a payment gateway?
If you are looking at accepting real-time credit cards on your website then a payment gateway is required. There are three main requirements for a payment gateway to work:
- A website that meets the security and eligibility requirements for the bank to issue a merchant account
- A payment gateway provider. Payment gateway providers offer the server that acts as the link between your website and the bank. The server has a very special configuration and a very
high level of security due to the sensitive nature of the data being transferred.
Once all three requirements are met, the payment gateway then needs to be connected to the website and to the merchant account. This will then allow for real-time credit card processing.
What are the benefits?
By incorporating a payment gateway into your e-commerce website you can ensure you are providing the easiest and most streamlined buying experience for your customers. The easier it is to buy from your online store the more likely visitors are to purchase.
A payment gateway is beneficial for a few reasons:
Visitors stay on site: Many websites will take advantage of third party or hosted payment processing facilities such as PayPal. These facilities do work well and can provide secure payment options, however they do have draw backs. A major advantage of using a payment gateway is that customers will not leave your website to make payment. All user information and credit card details are inputted on your website meaning fewer steps for the buyer. Further to this, re-directing users to a separate website for payment often leads to mistrust and payment abandonments.
Real time transactions and payments: Utilizing a payment gateway allows you to accept credit cards directly on your website, but also means that these credit card transactions are processed in real-time. Real-time transactions mean that you as the merchant get paid immediately and that the customers get instant feedback as to whether their payment has been accepted or declined.
Saves time and reduces administration: A payment gateway saves time with the fact that credit cards are processed in real-time and funds are deposited directly into a merchant account. A payment gateway removes the need for manual card processing or third party account consolidation.
Netregistry provides a secure, ultra fast payment gateway service for your e-commerce needs. Unlike other providers where you are charged per transaction, Netregistry charges a flat, highly competitive monthly fee no matter how many transactions you process! Find out more .