What is a Payment Gateway?

What is a payment gateway, and why does an online store need one?

A payment gateway is a secure service provided by a merchant card processing service that allows your online shop to accept credit card payments via your website. This will almost certainly increase your sales because the software runs 24 hours a day all year around. You don’t have to manage the process yourself and your customers can shop whenever it suits them. Credit card payments are immediately approved or declined and you will receive emailed reports of successful orders immediately.

Merchant card processing service providers must comply with regulations pertaining to financial services board as well as industry specific regulations. This ensures that the credit card information provided online is secure and will not be leaked to third party sources (which would make your customers vulnerable to credit card fraud).

How does a Payment Gateway work?

A payment gateway is a complicated system of software technology that is always being improved on and updated to stay one step ahead of online fraudsters.  In effect, the secure software technology is installed and integrated with your website software and linked to the shopping cart facility. Once the customer has completed browsing and selecting items for their shopping cart the system will take them to the checkout option and then to the payment option. If the customer selects the credit card payment option their order will be routed to a secure portal where they are required to enter their credit card number, expiry date, name on the card and the Card Security Code (CSC). This information is encrypted and passed on to the merchant card processing services provider’s web-server. This is done via Secure Socket Layer (SSL) encryption which is a compliance required by the Payment Card Industry Data Security Standard (PCI DSS). The transaction is then forwarded to the merchant card processing services provider’s payment gateway with additional encryption. The payment gateway further converts the information format and forwards it to the payment processor of the acquiring bank used by the merchant card processing services provider. The information is forwarded to the card association (American Express, Diners Club, Discover, MaterCard, Visa, etc) and finally the payment is approved or declined.

Sounding rather complicated?

It can seem complicated but you need not understand the processes that happen at the back-end of your website. All you must ensure is that you choose a reputable merchant card processing services provider to guarantee the integrity of your business and the security of your customers’ private and sensitive information. Choose a merchant credit processing services provider that is PCI DSS compliant and has SSL certification. Also select a merchant card processing services provider that is well established in the industry and offers references.

Once the credit card processing software technology has been installed and integrated with the software at the back-end of your website, you will also have the option of a virtual terminal that allows you to accept credit card payments telephonically or face-to-face. These transactions will be processed in the same way and you will know immediately if the payment is approved or declined.

For more information about payment gateways or to sign up for a merchant account today, just call 1-888-924-2743 or visit Charge.com.