Whether you want to ensure the success of your retail startup or any business for that matter, one of the most important things you must consider is how customers or clients will be able to pay you for your services.
As more businesses enter the digital space and move from cash, payment gateways are becoming a necessity, especially for business growth.
Several industries, such as online casinos have benefited greatly from using payment gateways, and some have even been tailored to suit the online gambling space.
They have simplified buying, selling, and playing casino games like Jackpot 6000.
In this article, we will look at what a payment gateway is, how they work, and the options available to you.
What is a payment gateway?
A payment gateway is a processing mechanism that allows the cashless payment of goods and services in an online or physical store.
In a nutshell, payment gateways enable merchants to receive money from customers.
Payment gateways can be cloud-based payment technologies or part of an in-store POS (point of sale) system.
How do payment gateways work?
A payment gateway is a key factor in payment processing as it collects information from the customer or client, transfers that information to the necessary parties, and authorizes the payment.
Simply put, the payment gateway authenticates and securely facilitates the payment between the customer and the business.
At checkout, the customer enters the payment details (credit card/ debit card/ e-wallet), and the details are first sent to the seller’s payment server and then to the seller’s payment processor.
The buyer’s payment processor authorizes the payment and sends feedback on whether the payment has been approved or denied, giving reasons if the transaction is denied.
The payment gateway sometimes charges the seller a fee for the services offered.
The fee could be charged per transaction, monthly, or both.
How secure are payment gateways?
No one wants to lose money, and security is a major factor when customers transact online.
Payment gateways have security features that help reduce or eliminate the frequency of financial fraud.
- Security Compliance. Payment gateways must be compliant with global Payment Card Industry Data Security Standards (PCI DSS). PCI DSS are security standards that all sellers who accept credit or debit cards must adhere to.
- 3D Secure. 3D Secure is an extra step that can be taken to minimize fraud during card transactions where customers add a two-factor verification step to the card. This way, every payment is verified before completion.
- Payment tokenization. Payment tokenization refers to the process where a token replaces sensitive payment data. The token contains non-sensitive data in the form of random letters and numbers, hiding any sensitive card data. If this data is leaked, the information will not be useful to a cybercriminal.
Benefits of a payment gateway
A payment gateway is a great tool for facilitating financial transactions, and there are three main reasons why every business should consider using one.
- Payment gateways are secure. The main concern when processing payments is usually data security. Payment gateways reduce the risk of financial fraud as they are compliant with global PCI DSS standards.
- Payment gateways are fast. Payment gateways have quickened the process of transferring money between a customer and the seller.
- Payment gateways are convenient. Customers can make payments anywhere at any time. As the seller, you do not have to be present to receive the payment.
Types of payment gateways
There are different types of payment gateways.
- Hosted gateways. Hosted gateways such as PayPal are the best if you don’t want to maintain the payment integration yourself. They work by redirecting a customer to the payment service provider’s website where the customer enters their payment details. When done, the customer is redirected back to the seller’s main page to complete the checkout process.
- API-hosted. Businesses that choose to use an application programming interface gateway can control the design of their checkout page fully customizing it to match its brand on every device. This means that the seller is in charge of the payment security processes, including the SSL certification and meeting the Payment Card Industry Data Security Standards.
- Self-hosted gateways. These gateways, like Stripe, offer more control as the customer’s details are collected on the seller’s website instead of being re-directed to the payment provider. The details are then relayed to the payment gateway for approval. Since the customer does not leave the merchant’s site, this makes the process quicker.
- Local integration gateways. A local integration gateway redirects the customer to the seller’s bank website where they enter the details and are then redirected back to the seller’s website
How to choose the best payment gateway for your business
Before choosing a payment gateway, do sufficient research to see which one will be a better fit for your business.
- Reviews. Look at online reviews to see what other businesses are saying about the payment gateway.
- Availability. Confirm which payment getaways are available in your country. Once you know what is available, check which ones are secure. Check for PCI DSS compliance and have 3D Secure2 capabilities.
- Fees. Another factor to consider when choosing a payment gateway is the fees. Ensure that there are no hidden fees.
- Support. If you choose to work with a payment gateway, ensure they offer support.
- Add-on services. Check if the payment gateway offers other merchant services that will add value to your business.
Payment gateways simplify financial transactions between businesses and their customers or clients and eliminate manual processes, which are easily prone to errors.
If you are growing a business, invest in a great payment gateway to streamline all your payment processes.