UNITED STATES—Payment gateways are a necessity for any business that accepts online payments. But what exactly is a payment gateway and how does it work? Below we answer this question and give you valuable insight into how you can choose the right one for your business.

How do Online Payment Gateways Work?

An online payment gateway is similar to the Point of Sales (POS) systems that you see in brick-and-mortar stores. It is basically an online payment processing software that captures card information and transfers the information to card networks and merchant account providers or payment processors such as PayPal and GooglePay.

Payment gateways act as middlemen by authenticating and securing customer data. When a customer clicks the ‘pay’ or ‘buy’ icon in an online store, they’re taken to a checkout page where they enter their name, card number, CVV number, and card expiration date.

The payment gateway then carries out fraud checks and securely passes this information from your system to your payment processor. A request is then sent to the card network such as Visa or Mastercard and the card networks route the transaction to your customer’s bank for authorization of payment.

Why is Payment Gateway Integration so Important?

Integrating a payment gateway with your merchant account makes it easier for your customers to make electronic payments regardless of where they are. Gateways also secure online transactions and improve cash flow.

They achieve this by allowing your business to accept different currencies and connect with customers from international countries. Additionally, integrating a payment gateway to your website will allow you to use features such as recurring billing, e-receipts, and ACH and mobile payment processing.

Which are The Most Popular Online Payment Gateway Providers?

PayPal is one of the most popular payment gateways in the world. Aside from their robust gateway, they also offer merchant accounts and both are equipped with free fraud protection. PayPal’s payment gateway can also be customized to fit your store’s branding, that is logo, design, and other visuals.

Square is another fantastic payment gateway provider. This company also offers merchant accounts but what really separates them from other providers is the fact that they don’t charge chargeback fees. In fact, they offer merchants up to a $250 monthly chargeback protection.

Stripe is another online payment processing company that offers an excellent payment gateway. Apart from card payments, with Stripe you can also accept wire transfers and Bitcoin. Cryptocurrency processing is a feature that many payment gateway providers don’t offer. This makes Stripe a must-have for online stores that accept crypto.

Merchants looking for payment gateways that cater to mobile users will enjoy integrating Google Pay to their store. Google Pay offers fast payment processing through its mobile app and UPI network. It also provides merchant accounts that can send money directly to your bank account with no fees.

How to Choose the Most Suitable Payment Gateway Provider?

There are a ton of payment gateways online that you can sign up for without a single bat of the eye. However, a few key features should be considered and the cost is one of them.

How much you’re willing to give away should depend on the size of your business and the quality of the payment gateway. If you’ve just launched a small store, we advise you to find payment processors that specifically cater to small businesses. Avoid paying for a gateway until you’re absolutely sure that you can afford it.

Online payment processing is always at risk of fraud, so choosing a payment gateway that is PCI-compliant is important. Being PCI compliant means that the gateway provides robust security, fraud checks, and data encryption to ensure both you and your customers are safe.

Easy integration is also essential here. You want a payment gateway that will quickly and seamlessly merge with your website. Therefore, avoid gateways that take hours to set up or accept payments.

The types of payment options offered by the gateway should also be on your checklist. Remember, online payment processing doesn’t just revolve around credit cards. Look for gateways that will allow you to accept vouchers, cryptocurrency, digital wallets, prepaid cards, and e-Checks.

When comparing payment gateways, additionally look for invoicing features that’ll streamline payment processing. Some of these features include auto-matched invoices, recurring billing, payment tracking, auto-receipt generator, and delivery notes for customers.

Conclusion

A payment gateway will offer your customers a shopping experience that they’ll truly enjoy. With multiple payment options and fraud management tools, accepting payments will also be quick and trouble-free for you.

Begin looking for your new payment gateway today and improve the overall performance of your business.