A payment gateway can be thought of the eCommerce equivalent of the point of sale (POS) terminal which is present in most brick and mortar shopfront retail outlets. It provides the authorization and transfer of payments between the customer and the merchant. The payment gateway accomplishes a variety of tasks when a customer submits an order on an online store. If you want to take credit card payments on your website then a payment gateway is required.

If your setting up an online store an important factor to consider is how you will you take payments. It is vital to get right. Making the wrong decision could be costly. So how do you receive payments from your eCommerce store? This is where a payment gateway comes in…

What a Payment Gateway Does

– Taking credit card details securely
– Forwarding of the money and transaction information to the merchants bank
– Forwarding of transaction information to the credit card provider (eg. Visa)
– Checking back and forth between card and bank making sure it is an authorized payment
– Receives a response from the entities involved and then continues to authorize the order on the eCommerce site
– Assuring payment is approved and settlement of the order is processed, with the bank receiving the funds

With online stores there are many options for payment gateways. All of the hosted eCommerce platforms include a range of support for different gateways, all of which would insure high security standards.
Other than your standard bank gateways there are heaps of third party services that offer easy to set up payment gateways. Popular services include PayPal, Stripe, Authorize.net, Google Pay, Apple Pay and many more.

Make sure you choose wisely, and that your eCommerce software is compatible with your prefered gateway. There are numerous examples of customers trying to purchase something and then being faced with a payment process being too tricky and complicated. Some online store holders have lost a lot of money because the payment gateway was unreliable and not processing payments correctly.

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