- 1 What is a Payment Gateway?
- 1.0.1 Integrates with Online Shopping Cart
- 1.0.2 Process Payments by Accepting Multiple Payment Options
- 1.0.3 Security of Payment Gateways
- 1.0.4 Software Integrations
- 1.0.5 Quick Checkouts & Impulse Buying
- 1.0.6 Chargebacks & Fraudulent Transaction Protection in Payment Processing
- 1.0.7 Settlement & Reports
- 1.0.8 Business Growth
- 1.1 Conclusion
What is a Payment Gateway?
A payment gateway is an arrangement that involves payment transactions from the buyer to the seller. Due to the increased emergence of e-commerce platforms and online shopping, payment gateway have gained recognition. They are trusted to make secured payments at a low cost. They facilitate the use of an electronic payment processor, handle requests of payments, direct the requests, and route the payment to the responsible account.
A payment gateway is an intermediary link that connects various bank networks to your website. The responsibility of verifying and transferring the credit card information to the bank or card provider lies with payment gateways. They increase the clarity, authenticity and security of your website. One can use payment gateways and make instant payments with the standard mechanism of its working. Payment gateway enables 24×7 access to online shops and helps make payments from anywhere in the world.
Some of the most prominent benefits of integrating payment gateway to your business are as follows:
Integrates with Online Shopping Cart
An online shopping cart shares similarities to a physical shopping cart you wheel around in the physical stores. You select all the required items in your cart and then proceed to make payments. Online cart calculates the total amount of all the items in your cart, adding the taxes and delivery fees. It also helps you to avail any coupon discounts or credits to the final amount. The payment gateway integrates the online shopping cart to connect the merchant’s bank account and the website for the secured payment transaction.
Application programming interface (API) helps to integrate the website’s shopping cart to the payment gateway. You can also use secured hosted payment gateway software for integration as it accommodates your e-commerce website design perfectly. Further, the liability in this payment form is less as it is provided by a third party.
Integrating your payment gateway to a shopping cart ensures secure payment processing, easy payment checkouts, and generates more sales. It helps to streamline all your payment processes in one place. You can refer to this post for a Guide on Payment Gateway Testing.
Process Payments by Accepting Multiple Payment Options
Today, in this competitive e-commerce environment where everyone wants to generate more sales and revenue, it is necessary to provide an excellent customer experience. The effortless payment process and multiple payment options are some of the dominant factors that affect customer experience. Inability to accept payments in the form that customer desires can lead to customer dissatisfaction and poor customer experience.
Multiple payment options help the customer to checkout and make payments without any trouble. It helps to gain customer satisfaction, in turn increasing the business credibility. Having multiple payment options raises the chances of converting the prospects into sales. It increases the trustworthiness, reliability and visibility of your website. Different payment options that are essential for business are
- Credit cards or Debit cards
- Integrated express checkout (Amazon pay, PayPal, etc.)
- Mobile Payments (Google pay, Apple pay, etc.)
- Electronic fund transfer
- Cryptocurrency payments
- Cash on delivery (COD)
Security of Payment Gateways
While transferring sensitive customer information through a payment gateway, it uses data encryption to encrypt the data. This information transfer takes place between the merchant’s bank and the customer’s bank. The payment gateway here acts as a third party that has the responsibility of transferring information securely. The security aspects depend on the use of the encryption algorithm, public key, and private key. The public key encrypts the customer information such as card number, mobile number, email id, etc.
You can decrypt it with the private key of the payment gateway. This process is also called end-to-end encryption. The secrecy and dependability of these keys help to secure the entire encryption process. The fear of data theft or its misuse by anyone radically decreases with the encryption method. Similarly, SSL (Secure Socket Layer) provides customers and merchants with secure web browsing and servers. Security of any payment gateway plays a significant role as people’s money and sensitive data are at stake.
Accounting software is vital in any business as it looks after all the financial and transaction data performed in the life of a business. It includes sales, bills, invoices, payrolls, cash flow, etc. Integrating accounting software and your payment gateway helps to record and secure transactions efficiently. It also reduces the errors while transferring the information and saves the valuable time of the entrepreneur. It gives the entrepreneur time to focus on other profitable activities other than account keeping.
Similarly, Customer Relationship Management (CRM) integrations in the payment system can give you essential information about the customer’s needs. The in-depth knowledge about the customers and your business aids in making better decisions. The integration also assists in the collection of information and its storage.
You can also integrate accounting and ERP software into the payment system. It will help blend all the essential business aspects such as sales, marketing, purchases, human resource, manufacturing, etc. This ERP integration makes your business more productive and efficient.
Quick Checkouts & Impulse Buying
The payment gateway provider guides the customer throughout the payment method and helps them make quick and easy checkouts. The integrated payment gateway solution platform makes fast and seamless checkout payments making the customer satisfied. The convenience and comfort of making payments via multiple options with effortless checkouts and into the comfort of your home make online shopping a delight and recurring experience.
The easy checkouts and multiple payment processes attract impulse buying in the business. Many people eliminate the idea of online shopping due to the complicated and hectic payment checkout process. And above 40% of online shopping forms impulse purchase, if rendered with easy payment options and checkouts process. Hence there is a visible link between quick checkouts and impulse buying in the customer. Impulse buying brings in more sales and builds a reputation for your brand or website.
Chargebacks & Fraudulent Transaction Protection in Payment Processing
Chargebacks, also known as payment dispute, happens when there are problems in the payment processing. The issuing bank then holds the funds after being informed about it by the card verifier. In case the bank approves the transaction, then the debated amount is sent to your bank. If the bank rules against you, then the disputed amount is returned to the cardholder.
A chargeback helps the card network, customers and banks to have protection against fraudulent transactions and unauthorised buyers. Chargebacks help the customer if he feels suspicious activities are going on with his credit card data. Within the timeframe of 120 days, the customer can file for chargebacks and reverse the transaction amount. Payment gateway services help to notify us about the dispute and further analyse the chargebacks in detail. It also informs us of the reason for chargebacks and suggests measures to avoid them.
Settlement & Reports
Bank settlement and reports play a significant role in benchmarking the growth and sales of your business. The payment gateway not only gives an integrated payment solution to process hundreds of transactions in a short time but also makes the settlement process very easy. It analyses and views the transaction processed through the payment gateway. The sales reconciliation process becomes simple with the help of sales reports, void transactions, refunds, and various customer information.
Payment gateway reports about the status of the transactions on your website. This data helps the merchant take the necessary steps to convert the pending transaction into a successful one and discover the reasons behind the failed or cancelled transaction. Further, the customer does not have to worry about the settlements or reconciliation of any transactions. The payment gateway automatically settles the manage payments from other banks protecting the confidentiality and security of the payments.
A payment gateway helps the customers to buy the desired items with a click of a button. Multiple payment options, ease of transaction process, and payment security of payment gateway attract the customers. It also allows the customer to shop online anytime they want without the restriction of closing time. Real-time reports about all the transactions help small business owners gain insights on sales and business growth. Payment gateway makes your online businesses more convenient and secure.
Payment gateway seamlessly integrates the entire shopping journey from the product selection to its delivery. It also helps increase customer loyalty, brand reputation and boosts sales. It guides you in making better decisions for business growth by providing valuable feedback and customer information. This data comes in handy when you plan to expand your website by delivering broader market research. And customers love websites that are up to date with the latest trend in payment and technology.
Payment gateway is an integral part of the online e-commerce industry. They help customers as well as merchants to reap various benefits. In the era of technical enhancements and innovations, merchants should accept the changing environment and different payment methods.
With payment gateways, you can make online payments in multiple forms using your mobile devices. The benefits of payment gateway for your online website or small businesses are numerous and for the long term. Payment gateways are going to be new standards of the payment system in the future.