Payment Gateways: How To Choose The Best One For My Online Store?
A payment gateways is what allows you to receive money transfers. Other elements of your website direct the user to make a purchase, and if this last step doesn’t work, your entire business is in trouble.
In this article, you will find everything you need to know about payment gateways so that you can select the most proper one for your online store, be it Paypal, Stripe, or other existing alternatives.
What Are Payment Gateways?
The payment gateway acts as an in-between between your bank and your customer’s card bank. They are what allow your company to receive payments online. For this reason, payment gateways are essential for any small business that has its catalog of products or services.
Payment gateways exist because it is proscribed to send banking information directly from a website (for example, your online business) to a payment processor (in this case, the bank of your business account). Payment gateways pass your customer’s credit card information to the payment processor and notify them if the transaction has been approved.
The payment gateway acts as an in-between between your bank and your customer’s card bank.
How Do Payment Gateways Work?
To understand how payment gateways work, let’s start on the client-side. The user of your online store adds the products that he wants to buy to the cart. The following thing you need to do is enter your debit or credit card information, which includes your card number, expiration date, card name, and security code.
As I explained earlier, banks do not allow this information to be sent directly from their website to an acquiring bank; that is, the bank of your merchant account. This is where payment gateways come in: customers enter their details into the gateway you have integrated into your website. The payment gateway will control encrypting the data and sending it securely to the acquiring bank.
The payment card service sends the information to the issuing bank (that is, the customer’s bank). It performs security and fraud checks and finally authorizes the transaction if it is valid.
The confirmation or rejection of the transaction is sent back to the card service and the acquiring bank, sending this information to the payment gateway. The payment gateway, as applicable, will display a transaction confirmation page or ask the buyer to try a different payment method.
This process has many steps, but it happens instantly, and a good payment gateway should be able to show the result of a transaction in just a few seconds.
Keys In Choosing Payment Gateways
There are some fundamentals that you should study when choosing a payment gateway. While their role seems very specific, not everyone works in the same way or has the same capabilities.
- Safety: Fraud is more likely in online transactions than in-person transactions. Security is essential for any online business, so you must make sure that your payment gateway has functionalities such as P2PE encryption, fraud detection, data leakage insurance, etc.
- Costs: Numerous methods to pay for a payment gateway. Its costs include a monthly subscription of between € 10 and € 30 and a transaction fee that is usually no more than a very small percentage. There may also be other costs, such as maintenance.
- Contract: Long-term contract services may include high cancellation fees. To avoid being stuck with an unsatisfactory provider, consider hiring one that offers monthly renewal contracts.
- Accepted payment methods: The more payment methods your payment gateway accepts, the more possible sales you can receive. Make sure the service you choose agrees with all payment methods that your customers may use.
- Compatibility: Make sure the payment gateway service you choose is compatible with your merchant account and e-commerce platform.
- Integration: When you contract an integrated payment gateway, your service will be associated with a merchant account for your use. These services offer some additional features. A non-integrated payment gateway allows you to choose the merchant account that best suits your business. The choice between both types of service depends on what best suits your needs.
Payment gateways are an essential component in the sales flow of any online store. A well-chosen payment gateway can increase your conversion rates and attract more loyal customers.
But choosing the right payment gateway is only the first step. You should integrate it into your website and customize it to your needs to get the most out of it. This means that it is easy to use, works without errors, and blends well with web design.
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