The way goods and services are sold has been completely transformed by the internet. Today, you may shop from the comfort of your home for anything from automobiles to groceries. These days, all it takes are a few touches on your Smartphone. We have never before enjoyed the level of convenience that the internet offers.
However, how do the businesses who provide these products and services online accept payments? For customers to find online buying rewarding, a smooth payment process is essential. It needs to be seamless and secure at the same time.
Payment gateways have a role in this. They handle every aspect of the online store’s payment processing business. In order to safely process payments for businesses, payment systems must perform a number of crucial duties.
What is payment gateway?
A payment gateway is a piece of software or a service that, much like a POS system does for a physical store, processes credit cards and other forms of payment for e-commerce firms and stores. A payment gateway is a service that merchants can use if they need to process payments online.
The payment gateway secures the customer’s card details, ensures that funds are available, and eventually allows merchants to be paid. It acts as a bridge between a merchant’s website and its buyer. It encrypts sensitive credit card, debit card information, assure that data is securely transmitted from the customer to the acquiring bank via the merchant.
In other words, the payment gateway acts as a mediator for your customer and the merchant, ensuring that the transaction is completed in secure manner and efficiently.
How Payment Gateways Work?
A payment gateway places a strong emphasis on protecting the private data provided by the user throughout the transaction. By encrypting the user-provided data, including credit card and bank information, it provides security.
Step 1: After placing an order, a consumer clicks the Submit, Checkout, or corresponding button on the website.
Step 2: Following this, the website or e-commerce platform directs the user to a payment gateway where they provide all the necessary data regarding the bank or credit card they are using to make a purchase. The PG then asks the user to authorize the transaction before taking them directly to the issuing bank’s page or a 3D secure page.
Step 3: The bank verifies whether or not the customer has enough funds in their account to make this transaction successful once the payment gateway receives approval for the transaction.
Step 4: In accordance, the payment gateway notifies the merchant. If the consumer receives a “No” response from the bank, the merchant will then inform them of the problem with the card or bank account via an error message. The merchant asks the bank for the transaction if the bank portal’s response is “Yes.”
Step 5: The bank settles funds with the payment gateway, and the payment gateway then settles funds with the retailer.
Benefits of Payment Gateway Integration
Simplifies the payment process – The most obvious advantage of using a payment gateway API is that it simplifies the payment process. The entire procedure is simplified, from request to authorization to receipt and confirmation.
Businesses can use GoCardless to collect payments directly from their customers’ bank accounts, eliminating late payments and saving time. Accepting GoCardless payments on online invoices can help businesses get paid up to twice as quickly.
Improves the customer experience – Another great advantage of payment APIs is that they can significantly enhance the purchasing experience of users. This is because they eliminate the requirement for returning customers to complete checkout information with each purchase, as they can use stored payment information. Users can now check out with just a few clicks.
Option to customize – Another advantage of payment APIs is that they enable merchants to be creative with their store’s checkout experience. While many businesses stick to basic API payment integration, others take their ideas to a developer, who can customize the checkout page and process to the merchant’s vision. This can be a huge benefit for businesses that want to maintain consistent branding on their site from browsing to checkout.
Safer checkout experience – Payment APIs have improved security and fraud prevention features, which is good news for both merchants and customers. This is because customer information and payment information is stored by the host, not the merchant itself. This can help merchants become PCI compliant. Payment Gateways are often compliant with security standards like PCI DSS, etc. providing secure transactions
Store transactions offline – Another feature available in many (but not all) payment APIs is the ability to save transactions offline so they can be processed once you’re connected to the Internet.
Can support multiple transaction types – Some APIs may support a variety of transaction types, not just standard credit card payments. As more and more people choose alternative payment methods, this can help expand your customer base and confirm that your customer base values their preferred payment methods.
Accept Worldwide Payments – With the help of payment gateways, you can take your business to the global market. Anyone with an internet connection can shop and pay on your website from anywhere in the world. Online payment gateways allow you to accept payments in multiple currencies in multiple ways, giving you the freedom to grow your international customer base without worrying about a thing.
Payment Automation – Another advantage of an online payment gateway is that it reduces the need for human intervention or manpower to process payments. Payment automation not only saves time and money, but also reduces errors. You can set up automatic withdrawals, recurring bills and payments using the right payment gateway.
Two ways of setting up payment gateway
A payment gateway is a platform that authorizes payments for e-businesses and online retailers. In general, there are two definite ways of setting up a payment gateway, and that happens by:
- Direct integration through the Application programming interface (API) module by connecting his Bank account with the Payment Gateway.
- Integration of the Payment Gateway firstly on Test Mode & then on Live Mode user acceptance test.
How to choose a payment gateway provider
It might be challenging for many entrepreneurs, product managers, and business owners to select the best payment gateway for their company. After learning what a payment gateway is, you should be aware that a good one will have the features listed below:
- Adequate success rates
- Several methods of payment
- Quick and simple on boarding
- Adherence to PCI-DSS security
- Intelligent and simple dashboard
- Possibilities for competitive pricing
- Free installation and no maintenance fees
In addition to this, you should search for a payment gateway with a variety of the following other features:
- There are numerous services and tools that enable companies to accept payments without having a website or app.
- Acceptance of recurring payments for subscription products offered by a business.
- Ability to launch promotions, give customers EMIs, and offer discounts.
The Bottom Line
Payment gateways are an essential component of the digital economy. These systems lower some of the barriers to online commerce by allowing customers to safely and securely share their credit card information. Payment gateways have evolved from simple card-reading devices to sophisticated systems that collect and authenticate PIN numbers, signatures, and other data for merchant transactions. Some popular payment gateways include PayPal, Stripe, Authorize.net, SecurePay, AmazonPay, and Square.
Hire the best developer to enable online payments for your goods and services.
When choosing a payment gateway for your online store, there are several distinct considerations to bear in mind. Knowing whether the gateway you’re thinking about has a minimum cost or if they provide volume discounts, which may help you save money as you scale up, is important.
Additionally, you should collaborate with development partners who have a lot of experience integrating payment gateways. To reduce the likelihood of any cybersecurity problems, that level of experience is required.
For many years, businesses who want to take payments online for their products and services have relied on Vibidsoft as a trustworthy partner. We can advise you on the gateways that will work best for your needs of the business. Additionally, our group of talented developers will collaborate with you to make sure the payment gateway is properly integrated into your store.
Do you have any inquiries about how we can assist? Get in touch with Vibidsoft today, and we’ll be pleased to help.