To put it in simple terms, a payment gateway is an online payments’ service that is affiliated with an e-commerce platform. It is designed to make and receive payments. To process the payment, the customer needs to fill in some details. For example, card number, its expiry date, and CVV. After this, they need to process the payment. The amount deducted from the customer’s account is reflected in the merchant’s account. The main purpose of a payment gateway is to approve the transactions taking place between a client and a dealer. A few examples of payment gateways are authorize.net, PayPal, securepay.com, stripe, etc.
TYPES OF PAYMENT GATEWAYS
- HOSTED PAYMENT GATEWAY- This type of payment gateway leads the customer from the checkout page to the Payment Service Provider (PSP) page. Once the payment is processed, the customer is taken back to the checkout page and hence the process is completed.
- SELF-HOSTED PAYMENT GATEWAYS- In this type of payment gateway, details are gathered from the buyer on the dealer’s website itself. The collected data is then sent to the gateway’s URL.
- API HOSTED PAYMENT GATEWAYS- In this type of payment gateway, customers enter their credit or debit card information directly on the merchant’s checkout page and payments are processed using an API (Application Programming Interface) or HTTPS queries.
- LOCAL BANK INTEGRATION- Local bank integration gateways redirect the customer to the bank’s website where they enter their payment details and contact details. After making the payment, the customer is redirected back to the merchant account, with payment notification data sent upon redirection.
BENEFITS OF PAYMENT GATEWAY
- Easy Checkout: Payment gateway makes the checkout experience for the customer quick and smooth and makes online shopping easy.
- Impulse purchase: Most customers cancel their purchases if the payment mode is not comfortable and easy. A gateway should be such which is hassle-free.
- Integrates with shopping cart
- Provides faster payment processing
- Accepts multiple payment options
- Provides chargeback prevention
- Provides fraud management
- Provides recurring billing
- Payment Gateways often meet the security standards like PCI DSS, etc. providing safe and secure transactions.
FACTORS TO BE CONSIDERED WHILE CHOOSING A PAYMENT GATEWAY FOR YOUR E-COMMERCE WEBSITE
- SECURITY- A secure transaction should take place such that a customer’s personal and financial details are safe while the transaction takes place.
- CUSTOMER EXPERIENCE- The gateway should be user-friendly. It should also be compatible with mobile phones and process payment rapidly.
- WORLDWIDE PAYMENT ACCEPTANCE- It should allow transactions in multiple currencies as we deal in the global market.
- PAYMENT OPTIONS- The customer should get a wide variety of options through which they can pay. Options like credit/debit cards, mobile wallets, UPI, etc. all should be available.