What is a Payment Gateway?
It is a service that facilitates online transactions by transferring vital payment-related information between web-enabled devices/portals and banks/processors.
How to they work?
The customer, at first, places an order, checks out, adds the basic info and is then redirected to the gateway.
Data Encryption: The data input by the user is encrypted and sent to the payment processor of the vendor’s bank.
Authorization request: The processor then sends the data to the issuing card’s association wherein the request is either authorized or denied.
Response generation: The processor sends out the response to the gateway which then transmits it to the interface and processes the payment.
While this might seem like a complicated process on the surface, it usually doesn’t require more than a few seconds.
The role of payment gateways in eCommerce
Unlike traditional brick-and-mortar stores that handle transactions offline, eCommerce in its entirety is reliant on online payments. While a few vendors provide options such as Cash on Delivery (COD), solely restricting oneself to cash-only options is not feasible. And that’s where gateways play a dominant role in making online shopping hassle-free for consumers and facilitating ease of conducting transactions for retailers.
Without it, there’s no way to authorize the transaction. In addition, it imparts online retailers and shoppers with a sense of security since the input information is quickly transferred from the website/device to the gateway, thus mitigating the possibility of security breaches.
Choose the right platform
With several options available, retailers are often daunted by the array of choices. Remember, it’s vital to invest time in figuring out the right gateway for your business. Otherwise, you might end up risking sensitive information and jeopardizing your business. There are lots of platforms that come equipped with fraud-detection tools to ensure top-notch security.
Examples of such tools include
- Delivery address verification
- Fingerprinting tech
- Velocity pattern analysis
- Identity morphing detection
Braintree/PayPal, 2Checkout, Stripe and Square are a few popular choices. If you’re unsure as to which payment gateway to integrate on your site, then reach out to Openwave. We are a world-renowned IT services company with an unparalleled experience in providing payment portal solutions in New York.