Running an online store requires a payment gateway, which cannot be avoided. The final stage of selling a product on an e-commerce website is payment gateways. Without a payment gateway, you will not be able to receive payments from clients. Payment gateways seem complex. But, they are easy to use once you understand them. This article offers you a closer look at what a payment gateway role in ecommerce.
A Brief Introduction to Payment Gateway
A payment gateway is software. It sends users’ credit transactions to their credit card processors. The payment gateway sends users to the processors. It then tells them that their credit card transactions are authorized. The payment gateway is a middleman. It provides a link between an online store and the bank that approves credit card purchases. Payment gateways can also handle cryptocurrency transactions, debit cards, credit cards, and electronic checks. If a business already has a website and an account, setting up a payment gateway is relatively simple. PCI compliance and SSL certificates let you pick a safe payment gateway. They help avoid security issues.
Importance of Payment Gateway Integration in E-commerce
All transactions on an e-commerce website work with the help of the internet. Therefore, there is no other way to make your payment without using debit or credit cards. The merchant uses the information that the client gives while processing transactions through a payment gateway. Transactions are therefore referred to as “card not present” transactions. Use of Payments Gateways helps to reduce the chances of scrupulous activities and credit card fraud within an e-commerce business. Online shoppers are accustomed to payment gateways and overall technology. Therefore, payment gateway integration will be beneficial for them while making an online purchase.
Added Benefits of Using Payment Gateways in E-commerce:
The main purpose of a payment gateway is to authorize transactions between your company and its customers. A transaction process can proceed only after getting approval from the payment gateway. Thus, let us know the perks of using a payment gateway. Hence, have a glance below:
1. Accept both credit and debit cards.
Keeping a lot of cash at home is risky because there are a lot of thefts and burglaries. Therefore, when shopping on e-commerce sites, individuals prefer to utilize plastic money, such as credit and debit cards. Debit and credit cards are accepted via payment gateways for safe payment transactions.
2. Real-Time Transaction Processing
As soon as you place your order and make the payment, transactions are promptly processed through payment gateway role in ecommerce . Thus, it saves you a lot of time and completes your transaction within a few minutes only. Payment gateways authorize payments in real time and guarantee the availability of funds. As a result, the funds will reach your account within 3 working days from the date of sale.
3. Secured and streamlined transactions
Moreover, payment gateways maintain the integrity and privacy of your transactions by securing them from outsiders. Security-compliant payment gateways ensure a safe way to handle online transactions. It needs to comply with some security standards for securing transactions taking place through the internet. If you are using a credit card or debit card, then the payment gateway encrypts the sensitive information. Thus, the information is passed safely between the customer, merchant, and payment processor. Hence, you won’t have to worry about the compliance requirements regarding your security.
4. Customized Gateway
It is possible to customize the payment gateway as per the payment process requirements of individual entities. Furthermore, it is possible to enable multiple currency payments, easy generation of reports, account reconciliation, and settlement of payments.
5. Payment Gateway Integration
Online payment gateways integrate with other channels like websites, mobile devices, call centers, batch processing, IVR, and Kiosks. Moreover, it is easy to integrate payment gateways, especially card payment gateways, into a website design. Hence, minimum efforts and modifications are required to turn your website into an e-commerce site.
6. Supports customer dispute
Payment gateways resist merchants and corporations from misusing the system or making frauds. Apart from this, it takes immediate measures to settle customer disputes arising from their transactions.
7. Acts as a portal
A payment gateway is a connecting link between customers, businesses, and banking institutions. Whenever an online sale takes place, the payment gateway acts as a portal to transfer the required amount. Hence, an e-commerce website won’t be able to accept payments for the goods purchased without a payment gateway.
8. Reduction in Overhead
Payment gateways save card processing time and free up resources for improving customer service. Hence, minimum human intervention is required, as you will need to handle fewer transactions manually. It is even possible to expand payment gateways by using a recurring payments solution.
9. Convenience
You can collect online payments 24*7 from anywhere on the globe with the help of the internet. Hence, you can broaden your customer base by processing all sorts of credit and debit cards with a payment gateway. Moreover, flexibility and recurring bill options are the USP’s of payment gateways. You will get receipts directly into your inbox for weekly or monthly payments from an e-commerce website.
The Working Process of Payment Gateways:
Payment gateways are simple and straightforward solutions that customers can avail of to make their purchase. Behind the scenes, a payment gateway is a more complex process. payment gateway role in ecommerce include the following steps:
1: The customer visits an e-commerce website and places his order along with the payment information. Credit card processors receive the encrypted information that the customer entered.
2: The payment gateway sends the encrypted data to the merchant’s processor that processes transactions.
3: Then the processor channelizes the transactions to credit card associations like Visa, MasterCard, etc. for an interchange fee for each transaction.
4: At this step, the credit card association validates the transaction for approval or denial. The card you are using for making the payment should be valid, and there should be sufficient funds in your bank account.
5: The first four steps take a matter of seconds, and then comes the fifth step. The issuing bank starts the authorization with the credit card association, followed by the merchant’s business. To more precise, the authorization is sent back to all the parties involved in the payment processing network.
6: The transaction generally takes a few seconds but can extend up to 24 or 48 hours also.
By now, hopefully, you have a detailed idea about payment gateways and their role in e-commerce. Hence, opt for the payment gateway integration and make safer transactions in your business.
Frequently Asked Questions
1. What do you mean by a payment gateway?
A payment gateway is a software application that processes transactions for online purchases, ensuring funds reach the user’s account promptly.
2. What is the payment gateway role in ecommerce?
Payment gateways are essential for e-commerce websites as sellers and customers must interact to sell and purchase products. Integration is a basic requirement for running an online platform.
3. How does a payment gateway function?
A payment gateway involves numerous steps, including encrypting customer information, sending it to credit card processors, processing it for approval, and analyzing it before finalizing the payment. For assistance, contact the UrbanClap Team in Dubai.