What is a Payment Gateway?
Payment gateways allow online merchants such as eStore owners or auction
sellers to accept credit card payments over the internet. They authorize the
cardholder s credit that is, they check to ensure that the customer has
enough money on their credit card to cover the charges. They then place a
hold on that amount so the buyer can t turn around and spend that same money
elsewhere before it gets transferred to the retailer s merchant account.
Banks describes this as the technology necessary to consummate a payment
transaction.
A Payment Gateway is NOT a Merchant Account.
Many people confuse merchant accounts with payment gateways but they are
not the same. Merchant account services act, for the most part, as a liaison
between your business bank account and the payment gateway. When a customer
orders a product from your online business their card is processed via the
payment gateway. The money is then moved over to the merchant account
service. The merchant account service then moves those newly captured funds
to your business bank account.
3 Tips for choosing a Payment Gateway:
1. Is it PCI-compliant? That means that the company s security has been
audited by a third party and found to be up to industry standards. Since
payment gateways store all your customers credit card information (sparing
you the stress), it also means you can sleep better at night, knowing your
customers valuable information is safe and sound.
2. Good customer support. Nuf said.
3. Lastly, it is important that the payment gateway you choose be
integrated to the third-party solutions you are planning to use. That means
things like store front platforms and shopping carts you want them to be
compatible with your gateway.
Payment gateways will not only allow you to collect the monies from your
sales, many also offer an array of security features, some of which will
help you avoid becoming a victim of fraudulent orders! In the end, they will
make your ecommerce business a less-stressful, more pleasant experience for
both you and your customers.
About The Author:
Chris Malta and Robin Cowie of WorldwideBrands.com are the Writers and
Hosts of The Entrepreneur Magazine EBiz and Product Sourcing Radio Shows.
http://www.worldwidebrands.com/EMRinfo for more FREE eBiz info
from Entrepreneur Magazine Radio!
