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Payment Gateway: Its Benefits and How to Choose One for Your Business

The payment industry has radically changed and become so dynamic in recent years. With the rise of new technologies in the payment processing sector, everyone can easily sell or buy all around the world. Among the cutting-edge payment options introduced were online payments, contactless payments, and paying via an app, which changed the way consumers travel the internet. Given these advances, customers have become very particular on the speed, convenience, and flexibility of a company’s payment process. Undeniably, payment processing is among the top concerns of customers to make a purchase.

But along with the rapid development in the payment industry, cyber thefts and frauds are taking place also. These security breach concerns both the consumers and sellers. One of the proactive ways to minimize burglary and prevent other security issues within the e-commerce is by using payment gateway. If you are a newbie to the world of payments, though, “payment gateway” may seem extremely complicated for you. But, the truth is, it is not as complex as you think. Read further to know what online payment gateway is and how it can benefit businesses and consumers.

What is a Payment Gateway?

A payment gateway is a tool that authorizes credit card payments for retailers in all business verticals. It protects the sensitive details of the customers entered into a virtual terminal or a business website. Likewise, it ensures secure sending of customer’s details to the merchant and from the merchant to the payment processor through the use of encryption. In the past years, merchant account providers or payment processors and payment gateways operated distinctly. Currently, however, many processors have come to offer unified solutions—merchant processing services and gateway services.

Why Does Your Business Need It?

Acting as a go-between, payment gateway is now becoming a vital tool in the payments sector. This e-commerce tool allows you to accept credit, debit, and other alternative online payments. Likewise, it can help your business lessen the frequency and severity of credit card frauds in your transactions. Ultimately, almost the majority of online stores are using a payment gateway; thus you need not get left behind this competition. Learn more about its features to boost your income and increase repeat business.

How Does a Payment Gateway Work?

To understand why opting for the right payment gateway is critical, you need to figure out first what a transaction goes through before being confirmed. Besides, take note that payment gateway performs a vital role in processing and authorizing the payment between the customer and seller. Here are the basic steps on how it works:

  1. A customer buys a service or places an order online from a seller. He/she then enters his/her credit card and personal details and clicks on the ‘’Buy’’ or any equivalent button.
  2. The seller transfers the order details to the payment gateway and customers pay with their preferred payment method. Then, it captures the transaction request and sends all the details to the issuing bank safely by encrypting it.
  3. Next, the issuing bank or card scheme receives the request and gets the authorization by checking if there are available funds available.
  4. Afterward, the gateway communicates the final response to sellers and confirms or denies the transaction.
  5. Finally, once the transaction is confirmed, the bank settles the money with the payment gateway and then the payment gateway to the merchant.

Its Benefits to Your Business

  • Expanded customer base

It allows your business to accept payments from shoppers around the world; thus, expanding your customer base rapidly.

  • Bundled with shopping cart

At this point, more and more payment gateways offer the integration of shopping cart software with their programs. The software allows your customers to choose the products, add them to his/her shopping cart, and complete the purchase at checkout. Then,  the shopping cart calculates the cost of the items, sales tax, and shipping charges without the intervention of any of your employees.

  • Faster transaction processing

It is much faster and efficient than manual processing. Also, customers can enjoy purchasing minus the fuss of long waiting or lines.

  • Added convenience

Integrating a payment gateway means your store is open 24/7, which gives your customers the comfort to shop on their own homes and preferred time.

  • Customer loyalty

A payment gateway is a modern solution that offers great customer experience, a smooth checkout, and fast payment process for returning customers.

  • Risk control

This payment software simplifies the reconciliation process of accounts.

  • Opportunity for growth

This tool is for all sizes of business—small/start-up, medium, or enterprise. Thus, giving all businesses the same opportunities in the market.

  • Better data analysis

It helps business owners analyze details in a single click through its latest report generation feature.

Choosing the Right One for Your Business

Choosing a payment gateway provider can be a challenging, time-consuming process. Yet finding the one that fits your website needs is as essential if you want to succeed in your industry. Practically, every business needs to integrate a payment gateway. As customer demands for making payments continue to evolve, it just makes sense that you change your behavior as a business owner and adapt to the modern world of payments.

To pick the right one for your business, always look for a payment gateway provider that is PCI-compliant and has an SSL certificate to avoid security issues. Above all, you need to have in-depth knowledge about the payment gateway provider and the services they offer. Figuring out the right payment end for your online business will dictate your success in the industry.

At CloudBanking, we have worked together to understand the difficulties of business owners like you. Thus, if you are looking to increase your income or develop your market, choose the provider that can cater and adapt to your business needs. Contact us now.


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