A payment gateway is an online payments service that can be integrated into an e-commerce platform. It acts as a channel for making and receiving payments. Payment gateways are used to receive an endless number of payments securely. This allows a quick and convenient payment process and aids in multiple payment-related tasks.
How does a payment gateway work?
Here are the key steps involved in a payment gateway process:
- A customer places an order on a website
- Merchant transfer the order information securely to the payment gateway
- Customer can select the preferred payment mode
- The webpage routes the customer to the relevant bank website to request transaction authorisation
- Post authentication, the transaction is authorised or declined by the issuing bank
- Payment gateway sends a message to the merchant
- The bank completes settlement with the payment gateway and money is transferred to the merchant
Why are payment gateways important for online businesses?
Here are some of the main reasons why an increasing number of online businesses are adopting payment gateways:
- Allows credit, debit, and other alternative online payment methods
- Reduces chances of credit card frauds
- Easy customer checkout and seamless navigation
- Security of customer information
- Easy installation and maintenance
Payment gateways enable smooth online transactions. Today, the success of an online business is dependent on customer satisfaction and this can be enhanced by adopting a payment gateway. The options available for payment gateway can be customised as per business needs to ensure seamless customer experience and maximise customer satisfaction.