A payment gateway authorizes payments for retailers in all business categorizations. They ensure that sensitive information, such as credit card numbers, entered into a virtual terminal or on an E-commerce website, are passed securely from the customer to the merchant and from the merchant to the payment processor through the use of encryption.
Traditionally, merchant account providers (payment processors) and payment gateways have operated separately, but in recent years, many processors have come to offer all-in-one solutions—merchant processing services and gateway services.
Benefits of a Payment Gateway
The trend toward merchant account providers teaming up with payment gateway services and offering complete merchant account and payment processing packages has grown because of the many benefits for merchants, including but not limited to:
- Secure transactions. Payment gateways utilize industry-standard encryption and effectively protect sensitive data, protecting both merchant and consumers from fraud.
- Expanded customer base. Payment gateways enable shoppers from around the world to have access to your store and can expand your customer base exponentially.
- Bundled with shopping cart. Payment gateways often bundle shopping cart software with their programs.The software allows your customer to select products with the click of a mouse, add them to his or her shopping cart, and complete the purchase at checkout.The shopping cart calculates the cost of the items, sales tax, and shipping charges without you or an employee having to be present to conduct the sale.
- Faster transaction processing. A payment gateway is much faster than manual processing, and customers can make a purchase without the inconvenience of long waits or lines.
- Added convenience. Having a payment gateway means your store is open 24/7, and your customers can shop at any hour of the day or night from the comfort of their own homes.