Today we can pay for practically anything online in one click. However, this simplicity requires an excellent infrastructure. The order page is an essential element of any online business. The companies can significantly increase the conversion coefficient and offer their clients convenient payment methods. A reliable payment gateway helps merchants to develop their businesses and focus on their primary activity instead of processing the payments. Let’s look in detail at what payment gateways are and what benefits this integration can bring to merchants and various platforms.
What is a payment gateway?
A payment gateway is a critical element in the payment processing system, regardless of whether it is an online or in-store purchase. It is an external transaction mechanism that collects, transfers, and authorizes clients’ information in real-time to the merchant’s bank, which processes the transaction. Payment gateways are not all the same. You will need to understand and accept particular limitations each gateway provider has since the instruments’ infrastructure differ. A payment gateway is designed for:
Regulation of non-cash online payments between buyers and sellers;
Payment details verification for all parties involved;
Reducing fraud activity possibility;
Providing personal data security.
These are services that authorize credit card payments for online and offline businesses. These are equivalents for physical POS terminals in stores or restaurants. It allows customers to provide data about their credit card, and then the merchant securely receives it and transfers it to the bank. It tells you if the cardholder's bank has approved the charge and sends your bills for settlement. Indeed, the term ‘’payment gateway’’ and many related terms from the debit and credit cards payment sector may not be defined in any legal, regulatory, or official documents, depending on your location. Hence, different people and organizations use these terms with different definitions.
Payment gateways as an essential element of e-commerce
A payment gateway conducts the whole e-commerce show and functions as an intermediary facilitating online transactions. Often these are money flows from those who pay for products and services to people who provide them on their websites. The digital intermediary helps online customers to pay for what they need in a blink of an eye.
Checking the information provided by payment recipients analyzes whether to approve such a transaction online. Thus, it also significantly reduces the risk of fraud, ensuring safe and secure cashless transactions between participants involved in e-commerce interactions.
The role of a payment gateway for merchants and platforms
Payment gateway services are necessary for processing all credit cards on the internet. This is the same process that the Point of Service (POS) device performs when you pay for your meal in a restaurant. They also process your retail purchases. Hence, a payment gateway's primary function is authorizing transactions between you and your clients. Furthermore, it protects clients’ credit card data by encrypting personal information and helps save it from fraud.
It is critical since many users are only sometimes confident in such operations within the virtual world. Thus, the company will be more attractive if the provider guarantees protection and reliability. As mentioned earlier, this instrument identifies the cardholder and provides a safe transaction from their account to the merchant's account or e-commerce platform. The payment gateway offers this entire flow. It maintains security by following a defined protocol and encrypting clients’ data.
Setting the appropriate payment gateway
If you work in the e-commerce industry, you will need a merchant account and a payment gateway to accept online credit cards. First, you must legally set up your business and choose a provider. You must create an account, buy a domain name, and have a running website. At that point, you should select a third-party processor to start accepting payments online. This system is usually a third-party processor that handles payment transactions. The processor also provides credit card machines to confirm credit card payments offline.
Selecting the provider for your business can determine the success of your business. The merchants must know why they require such an instrument and what services the gateway provider offers. For example, what features they will provide for companies, credit card machines, and other things they offer before including them as one. They need to be aware of service changes. Understanding the complete payment processing cycle for an online store will be critical to the long-term success of your online business.
How does the technology function?
Business owners don’t have to study the technical basics of gateway functionality, which is excellent news. Thus, integrations with e-commerce websites or any other website type require selecting a supplier. Next, it requires integrating it into your software with the help of a straightforward adjustment master. That’s it. Also, it is a benefit to know the payment gateway work scheme.
Payment gateways typically function according to the following standards:
The client makes an order on your website. They go to the card and enter the payment information.
The payment gateway receives the information, encrypts it, and passes it to the payment system through a secure channel.
The client is redirected to the payment system.
The payment processor verifies whether the transaction is successful and sends the client and the owner an appropriate message.
The customer can go back to the shop.
Thus, the payment gateway is responsible for interacting with the client and the payment processor. This connection must be efficient, fast, and, more importantly, secure since the payment system deals with the client’s personal information.
Requirements for integration with a payment gateway
It is critical to remember the legal aspect of the system integration process if you plan to use this instrument on your website and provide payment services. You must ensure that your clients can trust your website.
PCI DSS certification. Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements businesses must meet to store, process, or transfer clients’ payment data. The primary target of the PCI DSS standard is to provide secure network infrastructure and cardholder data protection. Following this standard is essential in any region.
General Data Protection Requirements (GDPR) are a must for any organization that processes and stores personal information in the European Union. Hence, if your business functions in the EU or beyond the EU yet process the personal data of EU residents, then meeting GDPR requirements is obligatory. You can get more details on GDPR in the article on the GDPR compliance checklist.
Strict Client Authentication. SCA is a requirement of the EU Directive about payment services. It concerns all payment gateway providers who work in the European economic sector. SCA provides security for all e-payments via multifactor authentication.
Which payment gateway to use for your business?
In the era of modern technologies, the variety of options that can fit you is wide. Yet, there is always the TOP offer in the vast list. These solutions are tested and will smoothly integrate with your business routine. Let’s look at the most popular and demanded providers in 2022.
Well, PayPal needs no introduction. It may be the first trademark that comes to mind when considering companies that deal with inline transactions. Since it was launched more than twenty years ago, its principal aim has been to provide secure money transfers for the growing Internet audience. PayPal is omnipresent today. It is officially available in over two hundred countries and accepts all card types. Indeed, PayPal is a versatile soldier. Integrating PayPal as a payment gateway may increase the conversion coefficient for orders by up to 40%.
In the recent ten years, Stripe focused a lot on technological advances and innovations, which were the primary source of its competitive advantages. The company facilitates the process of receiving payments and managing the online activity of organizations. Hence, it is available for any company, from a fresh startup to a large corporation. Stripe supports over 100 various payment methods. Millions of people from about 40 countries use it. E-commerce platform developers agree that it is the best choice for a straightforward payment interface for transaction implementation and management.
Amazon Pay is another popular payment method for small and medium enterprises. Its chief aim was to enhance the customer experience of Amazon clients. This instrument allows clients to purchase products on retail websites by adding widgets to the cart. It allows using any of the 80 available currencies. You may select the most convenient one for you. Amazon Pay charges a 2.2% + $0.30 fee per transaction. If necessary, they may introduce tax fees.
Apple Pay for merchants
It is a secure and fast payment method that you can implement in your business without extra expenses. It allows clients to pay with their iPhone, iPad, or Apple Watch. It is a safe solution for clients and enterprises thanks to tokenization and encryption technologies. The companies are not charged fees for Apple Pay. For instance, as a small enterprise owner, your payment methods should be straightforward and reliable. Furthermore, you may need your employees to track the transactions. Apple Pay is a perfect solution that people will appreciate. Fortunately, it is beneficial for companies too.
2Checkout offers adjustable settings for enterprises of different scales and payment solutions for integration. Its most essential advantage is scalability achieved with packets for different product types. 2Checkout supports all main payment methods, 87 currencies, and 15 languages. 2Checkout includes three packets with different fees. There are no fixed, monthly, or regular payments. 2Sell offer fees are 3.5% + $0.35 per transaction. 2Monetize packet is designed for digital products, and the fee is 6.0% + $0.60 per transaction.
How to add a payment method to the website?
Payment gateway integration is simple, yet it is crucial to understand several steps. Do it independently or ask our development team for help. Here are the steps to adding a payment method to the website.
1. Study the services of your hosting provider
Your website will need to use web hosting services for quality maintenance; the hosting provider offers all functions that you might require. The hosting provider might provide basic functionality and paid support. Some hosting providers give payment integration services that you might be interested in.
2. Select a payment gateway provider
You can select a payment gateway provider according to the requirements of your website. Remember that platforms without hosting are more expensive since clients do not need to leave the website to process payments. Please, ensure that the providers are reliable.
3. Ensure that your website meets the local regulations
Payment integration through a website is a complex process that can’t be completed without following the legal requirements. Meeting PCI DSS is the first step you must make in offering payment services to your clients. Please, keep in mind the personal data processing regulations in your region. If you ignore it, your business will be charged with sanction fees, and what is more important, you will lose your clients' trust.
4. Add payment methods that you want to employ
Payment methods may depend on the type and features of your business. Payment methods include credit and debit cards, mobile payments, bank transfers, e-wallets, etc. If you select a particular method, use the Sandbox account (a protected account for the secure launch of any application) to verify how the payment gateway functions and whether all function work right.
5. Register a merchant account
When you are ready with the payment gateway setting, you will need to create a merchant account and connect the payment system for the website with your account. Organizing the payment transfer from clients to your bank account (company account) is necessary.
What do you require to integrate a payment gateway into your website? You will need to define which type of payment systems you need and select a provider with the best offers for your business. Using a correct or poor payment system may positively impact your clients. Check what your competitors offer and consider their efficiency. As for method integration, if you have a small business, it is better to integrate a third-party system. The most popular approach is Stripe, PayPal, Amazon Pay, Apple Pay, etc.
It is best to use custom solutions if you own a large enterprise. In this case, you can hire a team of developers to provide unique solutions for your needs. Clients show more trust if a website uses a built-in payment system. In case you are looking for a way to increase the popularity and number of visitors, integrate a straightforward solution that supports numerous payment methods, fights fraudulent activity, and is organic from the client’s perspective.
Payment Gateways Integration for Merchants and Platforms key takeaways: