This article will compare different payment gateways and review the benefits of each one so that you can make the right decision when choosing one for your business.
What is a Payment Gateway?
A payment gateway is part of the infrastructure that allows a merchant to accept debit or credit cards and other forms of electronic payments. It acts as a connection between a payment portal (like a website) and the acquiring bank.
The purpose of a payment gateway is to check customers have available funds on their card, carry out fraud checks and also to take the payment. Since there are over 25 payment gateway options available to businesses in the UK, you should take the time to compare some of them in order to find the right gateway for you.
Do I Need a Payment Gateway?
If you run an online business and want to process sales, you will almost certainly need a payment gateway. This is because a payment gateway acts as a virtual replacement for a traditional POS system.
Some bricks and mortar retailers will need a payment gateway too if they do not have a traditional POS system and instead are using mobile software to take payments, for example.
When you start an online sales facility, your company will need to set up a merchant account and a payment gateway to allow your business to accept payments from credit or debit cards.
How Does it Work?
The payment gateway gets to work when the buyer places an order by pressing the pay now button, entering their credit card details online or alternatively over the phone. If this is done via the computer the buyer's web browser encrypts the information. This is done via SSL encryption (secure socket layer).
The seller will then forward the payment to their payment gateway. This will then forward the payment details to the payment processor that is used by the seller's bank. The credit cards issuing bank will receive the authorisation request and then sends the response back to the seller with the response code.
It will also tell the seller if the payment has been approved or not. It can also tell the buyer why a transaction has been declined (insufficient funds etc). The processor will then forward the information to the payment gateway which subsequently receive this reply and relays this information to a specific website where this info is interpreted as a relevant response then this is sent back to the merchant and cardholder.
As mentioned before all this takes place in a few seconds. The seller can then forward all their cleared payments in a batch at a time to their bank, funds will then be cleared into their bank account within three working days approx. All of this without revealing the buyers or the seller sensitive banking or credit card information.
What to Look For in Payment Gateway Services
Payment gateway providers offer retailers a number of features and add on services, but what are the main elements you should look for?
- First, you will need cart compatibility; will that payment gateway integrate with your chosen online shopping cart system?
- Consider what fraud detection and prevention services does the provider offer?
- Are they PCI compliant? Do they include the Address Verification System (AVS)?
- Can they support multiple cards and currencies? In an online business, customers may choose to pay with MasterCard, Visa, or American Express. They may also be based in a different country.
- How much is the provider charging for its service both as set up costs and on a monthly basis - and what level of support do they offer to their customers?
The last thing you want is to lose sales simply because your payment gateway doesn't support certain forms of payments.
Making the Right Choice
There are different payment gateway solutions for specific business requirements and each merchant should determine the best choice for his particular needs.
There are a number of websites which will offer payment gateway comparisons and reviews for 2017 detailing the type of services offered, rates charged and optional applications offered. Any merchant seeking to establish an online payment system for his E commerce services will find a wealth of valuable material allowing him to make an informed decision of which payment gateway option will be best suited to his needs.
There are, however, a few basic requirements to look out for when choosing your payment gateway service provider:
What Are The Gateway Functions?
Will they deliver the functionality of authorisation and transmission of credit and debit-card details through a fast and reliable process without charging substantial fees. All good payment gateway providers should offer a comparable rate for the processing of MasterCard, Visa and debit cards.
This should be processed as a background function on the site allowing for the continuing processing of daily business logistics elsewhere; the system should also deliver seamless integration with current merchant accounts, banking procedures and security compliance.
Integration & E commerce
Does the new payment gateway provide for reliable processing and smooth integration with the current shopping cart software? Some providers will offer the services of specialist IT programming professionals to assist the merchant with customizing his site; the system should also deliver the flexibility to allow for the configuration of automated invoicing and other valued-added applications.
Merchant Account Functionality
The payment gateway software should integrate with accounting solutions such as Quick Books and Excel to provide for continuing CRM (customer relationship management) in addition to sales- lead generation. It is vital that it should also offer user-friendly access to client data, transaction details, and charge-back and deposit information to ensure optimum efficiency and productivity.
Get Good Support
The provision of effective 24/7-support services are a ?must?; the configuration, implementation and maintenance of a payment gateway system can offer a challenging prospect to even the most technically-minded merchant so the ability to call on professional IT assistance should the need arise can deliver great peace-of-mind.
Finally, look for a system which has been designed with end-user functionality in mind; the adoption of an API, Virtual Terminal or all-in-one payment gateway package should provide a simple solution to your E commerce requirements. If it demands a PhD in applied nuclear physics to get it up-and-running it is not the right one for you!
The following 4 payment gateway providers are great solutions for any size business and provide secure, fast delivery of payment information. When doing your research you should also widen your comparison to find the payment gateway that best suits your unique business needs.
CardSave is a popular payment gateway provider with over 1,000 new businesses signing up to them each month. CardSave will set up an integrated payment page on your website meaning customers don't have to leave your website to pay and your business has control over the payment page. Their software integrates with over 45 different shopping cart systems and can be easily assimilated into any website.
The basic monthly fee for this gateway is £20 per month and this includes 350 free transactions. After that, there is a fixed fee of 10p per transaction and a percentage fee of 1.45 per cent. There are no set up fees.
2. Charity Clear
Charity Clear aims to help businesses meet their corporate social responsibilities as the firm donates all their profits to charity. However, Charity Clear is additionally one of the most competitively priced payment gateways on the market with an overall cost per shopper transaction of 6.57p.
Compared to other payment gateways, this one accepts all the major credit and debit cards including Visa, Switch, MasterCard, Solo, and Maestro. They offer two forms of integration with your website, including hosted integration, where your customers get directed to Charity Clear's payment page, or fully integrated, where they stay on your site. They have high levels of security including CV2 and AVS to minimise losses to fraud.
Monthly fees for this account start at £18 a month including 350 free transactions. For all additional transactions you pay a fixed fee of 9.9p and a percentage fee of 1.50%.
3. Amazon Payment Gateway
Amazon's payment gateway offers businesses a number of unique features such as allowing customers to check out of your website using their Amazon details, which has a positive impact on conversion rates.
Adyen payment gateway is popular with businesses that make a larger number of online transactions as its £100 monthly fee includes 1,000 free transactions. Any transactions above this limit are charged at 8.3p each.
Adyen also has a number of features which will benefit your business such as one click ordering facilities for returning customers, a single screen payment web page which massively reduces shopping cart abandonment, and conversion analytics to help you understand your business even better.
Credit and debit card payments are encrypted so the data sent through the gateway remains secure at all times.
In recent years a 3D secure protocol has been introduced to increase security for the whole process. Here the customer must enter certain digits from a password specific to the credit or debit card they are using. If they are unable to do so the card's details never enter the gateway and the order cannot be completed.
They play a vital part in the process of electronic payments over the telephone or Internet. The gateway acts as a link between a buyer's bank or credit card company and the merchant's bank. All the information sent is secure as it is encrypted at every stage.
The whole process is very fast, with the majority of e-payments being accepted or rejected within three seconds, however the actual transfer of monies to the merchant does take up to 5 working days.
Payment gateways play a vital part in everyday life ensuring both buyer's and seller's banking information is kept secure. As Internet shopping continues to rise it seems the current system will continue to grow into the foreseeable future.
If you are interested in hearing more about payment gateways and merchant accounts for your business, then fill out the form at the top of this page and a select group of excellent suppliers will get in touch with you.