No online business stands without a right Payment Gateway partner. As a merchant, you need to understand your payment gateway better and choose the right one to offer your customer with the best services. Selecting the right payment gateway for your business is a crucial choice; however, it pays you off in the long run. A right payment gateway builds a smooth bride between a merchant and a customer and makes it easy for the customers to pay for your products.
What is a Payment Gateway?
The world is thinking about going cashless and the online marketplace taking charge of online businesses. The e-businesses must need to have a partner with the best payment gateways to deal with paperless transactions and to be ahead in the business. So, what is a gateway and how exactly this transferring system works? A right payment gateway is an application that permits a business to request payments from customers with security measures. The gateway manages the payment process when a customer clicks order, guiding them with required steps followed.
There are number popular gateways such as PayPal and Stripe that have built trust among the clients worldwide with their authentic services.
How does it work?
The online money transfer companies work as an electronic alternative to the traditional money physical transfer methods. This online cashless transfer system operates as a payment processor for e-businesses and other e-commercial users. These gateways charge a nominal against its services like one-click transactions and password memory.
A right payment gateway processes different steps to transfer the payment from a buyer’s bank account to the merchant’s bank account:
- It processes verifying each customer’s billing details
- It verifies funds and credit limit for each customer’s payment method
- It approves payment requests, allowing a business to issue a confirmation number
- And in the final step, the merchants get you paid for their goods
Now you may realize that the above –mentioned steps are very important for your business, right? And also, you understood the importance of a right payment gateway to help your business better.
Types of Gateway
There are two kinds of payment gateways namely classic and modern. In the first one, the business needs a merchant’s bank account to start the business transactions with gateway partners. It is a kind special account which allows a direct receipt of credit card payments. No transaction is possible unless a merchant owns a merchant account in this kind of gateway.
In the second, there are some many Payment Gateways that do not require any merchant account. These gateways take funds from the buyer’s account or credit cards directly and transfer them to the merchant’s account after validating them. PayPal and Stripe are great examples of such gateways. However, these direct gateway services charge some bucks for their services which sometimes doubles than what you are charged for the classic gateway. Despite these downsides, these gateways are broadly regarded as a secure medium of digital transactions from the smaller amount to bigger amounts.