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From year to year, the percentage of customers who prefer to buy online is steadily increasing. It is impossible to ensure the growth and development of a business without going online.
However, without connecting convenient payment terms it is quite difficult to ensure business success in the online space.
The optimal solution is payment gateways. However, not everyone understands the benefits of this solution, so we have prepared answers to your most common questions in one article.
What is a payment gateway
A payment gateway is a convenient solution that allows businesses to accept payments on the site. The payment data of clients are transmitted to acquiring banks automatically.
The payment gateway itself is a link without interacting with money. This is its main difference from the payment system.
Benefits of a payment gateway
This solution for your business benefits from:
- The ability to adjust to the requirements and needs of a particular business;
- Savings for the business, as the gateway will fully provide all the hardware and software;
- Transaction security;
- The inaccessibility of the buyer’s data for the seller and the gateway itself. The data is only available to the acquirer.
What a payment gateway can do
Encrypt data
Security of transactions is the main requirement for online business owners. Any cardholder thinks about the fact that their data is protected and does not fall into the hands of third parties. Modern business solutions comply with international security standards.
Work around the clock
The more opportunities you give your customers, the more loyal they are to your business. The ability to place an order at any time of the day or night is one of those opportunities.
Protect against fraud
Most modern gateways have built-in antifraud systems that protect businesses from fraudsters. These mechanisms monitor and analyze risks. This provides additional security for the merchant and the customer.
Work quickly
Any long waiting time is discomfort for your customer, so it’s important that even though several operations are performed simultaneously, the gateway works quickly. Clear results without long waits – that’s what you should strive for.
Install quickly
And, of course, you, as the owner of the site, should think about your comfort, choosing solutions that quickly and effortlessly integrate with the site.
Ensuring data security
Full encryption of personal information is a prerequisite for the gateway. We are talking about the number of the bank card, CVV code, and similar data of the client.
When paying, your customer will enter not only payment data, but also his personal data, so the HTTPS protocol will be used to protect the page.
The next level of security is proof of consent to the payment. To do this, the request signature mechanism is used. Sometimes as an additional security measure, the IP server that requested the transaction can be verified.
How does is work
It is better to explain the principle of the system schematically:
Stage 1. The customer places an order on your site and chooses the form of payment “online card”. After that, the customer is redirected to the page where he enters the card data.
Stage 2. Entering card details. Information about the card and the amount of payment are redirected to the payment gateway.
Stage 3. The gateway sends an authorization request to the acquiring bank. Another request is sent to the international payment system (IPS) servicing the card. Confirmation from the bank and IPS indicates that the card is valid, and the transaction is not fraudulent.
Stage 4. Customers with 3D Secure card protection will be required to enter a password. After entering the password correctly, the issuing bank notifies the international payment system.
Stage 5. Receiving confirmation from the payment acquirer system.
Stage 6. The message of the amount required for debiting the client’s account by the payment gateway to the bank acquirer.
Stage 7. The issuing bank checks the balance on the buyer’s card. After verification, the specified amount is sent with simultaneous notification of transaction confirmation to the IPS.
Stage 8. Receipt of confirmation from the IPS by the acquiring bank and payment gateway.
Stage 9. If the transaction is successful, the seller receives a message within 25 minutes. At the same time, the specified amount is deducted from the buyer’s account.
Stage 10. Crediting the purchase amount to the seller’s bank account.
Choosing a gateway for a commercial site
Choosing the right solution is not the easiest but a responsible task. Before you begin your search, answer a few questions for yourself:
What type of gateway do you need
There are traditional and modern gateways. Traditional ones have a merchant account, while modern ones combine the functions of a gateway and a merchant account.
A merchant account is an ordinary bank account with encumbrances, including inaccessibility of direct management of funds and delay of all payments coming to the account due to the need to pass bank verification. Delayed funds can vary from a couple of minutes to several days.
The traditional gateway seems complicated, but it is the optimal solution for medium and large businesses, whose representatives work with dozens and hundreds of transactions daily.
A decision in favor of a traditional gateway type will allow you to work directly with banks and pay less commission.
However, it will be more difficult to connect such a solution. The procedure starts with an application, payment, and commercial account setup, and ends with the integration of the tool via API.
The modern type of gateway is easy to set up and connect. A business only needs to have a valid bank account to accept payments.
However, it’s worth being ready for the increased commission. The solution is ideal for small businesses when you need to optimize costs at the very start.
What are the security requirements
Any payment gateway must comply with international PCI DSS standards. Ensuring SSL encryption and the digital signature option is also one of the prerequisites.
Organizing verification via SMS, call, or any other method, IP verification are the measures that will help you ensure the security of your customers and business.
Are there any data encryption requirements
Your reputation depends on the quality of the payment gateway, as the system processes personal customer data.
You should learn the principles of encryption better, this will allow for productive negotiations. For example, some gateways imply the complete deletion of card data.
What payment options do you need
Before making a decision, analyze your target audience: how do your potential customers prefer to pay? Based on these results it will be much easier to choose the right solution.
Pay special attention to the system’s support of several currencies. This issue is especially relevant for international companies.
However, be prepared for the fact that you will have to pay extra for multicurrency transactions.
Legal compatibility
Here you need to consider not only that the selected gateway has the right to operate in the seller’s country. But also that the goods and services you offer must comply with the rules of the chosen system.
At what speed should the gateway run
The faster the gateway processes information, the less time your client will spend waiting for payment confirmation. Transaction processing should be done in a couple of seconds so that the client doesn’t get nervous.
What kind of reporting and analysis tools does a business need
Think about what forms of reports and data your business needs. Different gateways offer different report formats and analytical tools to their customers. Choose the one that best fits your needs.
Does the gateway offer additional fraud protection
As we mentioned before, any gateway must be PCI DSS compliant. The standard applies to all organizations interacting with bank cards and has several levels: from 1.0 to 3.2.1.
If you work in a high-risk area, choose a gateway that offers additional fraud protection options. These include:
– payment confirmation with biometric data;
– the possibility of geolocation control;
– payer identification;
– limitation and control of the number of identification attempts, etc.
How user-friendly is the solution
The gateway should be convenient not only for the business but also for your customer. Your employees working with finances and the site must have no difficulties.
This is ensured not only by a user-friendly interface, but also by a responsive support service, high-quality and simple instructions, and full-fledged operation on all types of devices.
How much are you willing to spend
When connecting a payment gateway, you should be prepared to pay fees not only for registration and connection but also for:
– setting up the gateway on the site;
– processing transactions (the cost may vary depending on the type of currency);
– connection of alternative payment methods;
– chargebacks;
– maintenance (monthly).
The cost of implementing a particular solution can vary greatly since only gateway representatives decide for what and how much to charge the client.
How the gateway is connected
To get started, you will need to register with the service that services the gateway. Then you should study the conditions and the principle of work and only after that sign the contract.
The next stage requires the help of a programmer because it will be necessary to make an API configuration.
After the completion of the work, you sign the acts. In the future, you will be required to monitor API corrections, provide technical support to customers and work with problematic payments.
Be prepared for the fact that you will agree with each Equator separately, as the gateway itself is only a router, which is not responsible for financial operations.
Conclusion
A payment gateway is one of the best tools for online business, allowing you to quickly organize the process of accepting payments through the site.
This solution allows you to create only the basic conditions for payment and involves rather complex integration that requires the involvement of specialists.
The option is ideal if you plan to connect card payment on the site. However, if you’re looking for advanced features, it’s better to opt for other solutions, such as a payment aggregator.
