All You Need To Know About Payment Gateway
In today’s increasingly digital and credit card-based payment landscape, a payment gateway helps streamline and speed up transactions for both customers and merchants.
It is predicted that by 2022, non-cash payment methods would account for more than 80% of all purchases made in the United States. Furthermore, online payment transaction values are projected to climb by more than 15% between 2020 and 2025.
You’ll need to have a payment gateway if you operate an e-commerce website or want to collect credit card payments directly from customers. There are a lot of questions about what it is and how to set one up for your business, so we’ve laid down all you need to know about payment gateway.
What Is A Payment Gateway?
A payment gateway is an electronic gateway via which consumers can make transactions using their debit or credit card. The term applies to both online shopping cart payment processing portals as well as actual card-reading hardware present in traditional retail establishments. QR codes and Near Field Communication (NFC) have made their way into use in brick-and-mortar establishments in recent years as a part of the seamless omnichannel experience.
On the other hand, it must have the same reliability and ease of use as any other cash register. A thorough familiarity with payment gateways (what to look for, and the available features) is required before making the right choice. Valor PayTech is such a secure and convenient payment facilitator to employ in your businesses for hassle-free transactions.
Significant Entities of Payment Gateway
Merchant: The company or individual making the transaction.
Cardholder: The buyer, who is one of your customers.
Card Schemes: The credit card corporations, such as Visa, Mastercard, or American Express, that govern the card.
Issuing Bank: The company that manages the client’s account, which may be a credit card account or a checking account linked to a debit card.
Acquiring Bank: The financial institution that manages the merchant’s account.
Functioning of Payment Gateway
The payment gateway is a crucial element of the electronic payment processing system, as it is the front-end technology that transmits consumer data to the merchant-acquiring bank, which subsequently processes the transaction. Many modern gateways manage payment processing across a broad spectrum of channels and devices to create a more integrated omnichannel experience for merchants and customers.
Technologies for payment gateways are constantly changing to match new consumer preferences and technological advancements. The use of magnetic strip credit cards and paper client signatures were prerequisites in the past while using terminals. The signature step might be eliminated as the personal identification number (PIN) is submitted directly into the processing hardware with the advancement of chip technology. Today, customers can also make contactless purchases, and many of them increasingly use their smartphones in place of physical credit cards.
There are key differences between the designs of in-store and online payment gateways.
API
Application Programming Interfaces (APIs), which enable communication between the concerned website and the actual payment processing network, are necessary for online payment gateways.
POS
A Point-Of-Sale terminal (POS) is used for in-store electronic payment processing, and this terminal communicates with the payment processing network over an IP phone line or the Internet.
Principal Payment Gateway Types
It is of three types:
1. On-Site Payments
2. On-Site Checkout; Off-Site Payment.
3. Redirects
On-site Payments
To streamline the checkout process and the handling of payment processes, many large companies now accept payments directly on their websites using their own servers.
The tables have turned, and you now have more authority and accountability.
When handling payments on-site, every factor matters and any enhancement to the customer experience can have a significant impact on your bottom line. This is especially true for any company with a high sales volume.
On-Site Checkout; Off-Site Payment
In this configuration, customers will complete the checkout process on your site, but the gateway will handle the actual financial transaction on the back end.
This method, like redirected payment gateways, can improve payment processing and security in the back end.
The downside is that you will not have complete control over the user’s experience.. Before proceeding with this option, you should ensure that you have full faith in the safety of the gateway.
Redirects
Redirects frequently offer options for different payment options. A redirect occurs when the gateway directs a consumer to the third-party payment page to finish the transaction.
Through the Redirect gateway, many smaller platforms can take advantage of the powerful features and user-friendliness of a more robust system. Though redirects are convenient for customers and easy for stores to implement, they give businesses less authority and force customers to take extra action.
Finding the Right Payment Gateway
Merchants who accept online or credit card payments need payment gateways. To facilitate the transfer of funds from a customer to a merchant, this technology shares relevant financial data with the appropriate parties. Consider the following questions before deciding on a payment gateway or payment service provider:
- Is it offered in both your country and the country of your customers?
- Does it use encryption and other safeguards to protect user account data? Does it adhere to PCI standards for safe online transactions?
- Which payment gateway—hosted or self-hosted—do you a favor?
- What kinds of payments does it take? Will it satisfy the needs of your customers?
- How well does it work with your current infrastructure, specifically your POS system, accounting program, and website?
- Will it meet the needs of your company in terms of functionality?
Signing up with the Valor PayTech payment service provider is the simplest way to obtain a suitable and secure payment gateway for your business. You don’t need to worry about managing as many moving parts because Valor PayTech manages the entire transaction, emerging as the “Merchant’s Delight” and “Customer’s Shield.”
About Valor PayTech
The Valor payment gateway is a safe, cutting-edge, all-in-one option for ISOs, Merchants, and Business Owners. It improves operations by providing solid business solutions. Valor’s software systems and payment devices are top-notch, economical, and brilliant omnichannel offerings, allowing for quick, easy, and secure financial dealings. With so many beneficial options and consistent assistance, Valor is an ideal growth partner.
Put your strategies, methods, and protocols into action at all times. The Valor technology under your direction will ensure “Your Profits Are Always Safe”.