How to choose Payment Gateway for Online Store
As online business and activities boomed in recent years, online payments have become a significant part of the e-commerce industry. Credit and Debit cards are not the only method to make online payments, but there are also other online platforms used for online transactions.
What Is A Payment Gateway?
A payment gateway is a process that connects your bank account to the platform where you want to make a transaction. It is a technology that accepts credit and debit card purchases from customers. As a third party between the merchant and the customers, it takes money from party A and transfers it securely to party B. It also generates messages once the payment is transferred. Some platforms take per-transaction percentage or monthly fees to process a payment. At times customers do not do Online Payments but make a transfer directly to Bank or on a Phone or Cash/Cheque these are Manual Payment Gateways.
How Does a Payment Gateway Work?
Payment gateways are the software that transfers sensitive information from acquiring banks to the issuing banks. It shows if the transaction is approved or declined. Now letâ€™s see how it works once we add items to the cart and hit the checkout button on an e-commerce online store:
1: The buyer securely makes a payment through a credit card on the merchantâ€™s eCommerce site.
2: The payment gateway pushes the transaction information to the buyerâ€™s credit card network and routes information to its issuing bank
3: The issuing bank applies fraud detection procedures to determine the authenticity of the transaction and confirms the buyer has sufficient credit in their account to make a purchase.
4: Issuing bank After the authentication is done, sends information of approval(reject) back to the payment gateway.
5: the payment gateway then sends the approved or declined message to the merchantâ€™s bank and make the payout accordingly (Major payment gateway takes a couple of business days to make a payout)
Manual Payment Gateway
When customer does not want to pay Online, he has other methods like Direct Bank Transfer, Cash, Cheque or on Phone
How to Pick a Payment Gateway?
With the right payment gateway, it becomes very easy to make online payments. Choosing the right payment gateway takes a little time but pays in the longer run. Please keep the following points in mind while choosing the right payment gateway:
Costâ€“ it is the main factor you should keep in mind. The cost involves setup fees, monthly fees, and transaction fees, etc.
Types of cards allowed to make payments-most common cards are Visa and MasterCard, but still, it is recommended to look out first.
Holding timeâ€“ it varies from bank to bank, the normal holding period is -1-7 days.
Supported currencyâ€“ if you are making international transactions, check if the payment gateway supports multiple currencies or not.
Best International Payment Gateways Compared
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I'm Santosh Shinde Digital Marketing Manager @MoreCustomersApp. I have been working here since 2018. I interested in Digital Marketing and Ecommerce business. ..