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11 In Money/ Payment & Collections

Let’s Talk Payment Gateways

Lets talk payment gateways

When I launched my first online venture I only knew of three types of payment gateways: PayPal, Amazon and Google Checkout. If you can relate, know that you are not alone when it comes to knowing which one is best for your business. There are over sixty payment gateway options and they all have their pros and cons. Yes, there are in fact many  more than the three you constantly read about  and new ones are coming to market daily.

Being completely knowledgeable when it comes to your companies’ cash flow, revenue, and profit is extremely important. We want to give you valuable information on the gateways that go right along with those things.

We are going to break down the most popular payment gateways for your website and mobile payments too! Knowledge is power and by the end of reading this series you will walk away knowing more about how your customers pay you!

What is a Payment Gateway and does it mean to you?

Payment Gateways: An e-commerce application service provider is a service that authorizes payment for  online business retailers in addition to brick and mortar’s. The majority of shopping carts come with these standard plug-in options for payment: Direct Payment, PayPal, Amazon, Google and Stripe.

Payment gateways protect your customers’ or client’s credit card details by encrypting sensitive information. The information that is being encrypted is credit card numbers; this is to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor. This is also part of security measures. You will never know your consumers’ credit card information.

The payment gateway you use for your business will expedite the transfer of information between a payment portal and the acquiring bank.

This is how your company receives its monetary funds from customers and clients in the digital age. Without a payment gateway attached to your shopping cart you cannot receive monetary funds from people.

Your gateway is a the digital equivalent of a Point of Sales operating system you would have in a brick and mortar store front.

Top Payment Gateways

  • Authorize.net
  • Paypal
  • Google
  • Amazon
  • Stripe
  • Square
  • Intuit

What is the process of a transaction for a payment gateway?

When your customer places in order with your company it goes through a variety of steps actually before you receive your funds from said customer.

  1. Individual places an item in your shopping cart via your website. Then they press submit order. When promoted they select the payment gateway they want to use.
  2. They are promoted to insert their card information, billing address and other purgent information need to process the order.
  3. The information they submitted is encrypted by the web browser your customer uses to checkout. This is usually done by using the SSL (Secure Socket Layer) encryption. The payment gateway may allow transaction data to be sent directly from the customer’s browser to the gateway, bypassing the merchant’s systems.
  4. Now this information they have submitted is now being transmitted to process their order.
  5. Your payment gateway transmits the transaction information to the payment processor used by the merchant’s acquiring bank.
  6. Now the payment processors will move the information along to the card association that your customer used. Example: Master Card/ Discover, AMEX, VISA and more. The processor will either approve or decline your customer order depending on the funds available to them. They will determine if this is a legit authorization for said customer or if it a fraud on their account.
  7. Now after all of this has transpired the information is reported back to your website interface all under 15 seconds or less.

In the world we live in now there are a plethora of algorithms in place that help make this transaction run smoothly for you the business owner, the banks, process centers and most importantly your consumer.

So now you know the basic information about payment gateway. Over the next couple of weeks we will go deeper into the various ones you can use for your business.

Do you use any of these payment gateways? Which ones are your favorites? Did you realize all these options existed for your business?

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