Moving Your Business OnlineIn the digital age, moving your business online is a powerful strategy to foster growth and reach a broader audience. With the right tools and strategies, this transition can be executed with ease and efficiency, enabling you to capitalize on the endless opportunities the digital marketplace presents, from enhanced customer engagement to streamlined operations
The e-commerce revolution is not only happening with large enterprises, many small businesses sell online or extend from in-store to e-commerce.
Having an easy and safe online payment solution in place is essential to the entire checkout experience. In this article, we’ll introduce payment gateways and explore how they help businesses tap into the e-commerce opportunity.
What are payment gateways?
Payment gateways provide connectivity for businesses to access payment processing networks via website, mobile apps and other payment applications like virtual terminals. Online payment gateways provide secure authentication for each and every transaction; safe passage in a common language.
Payment gateways share a few core functions. First, shoppers provide their payment information via a website, mobile app or other online service. The payment gateway securely routes and processes information about the transaction to the acquiring banks and then card schemes or other funding source. Gateways notify the shopper and merchant that a transaction is accepted or rejected. The gateway then routes those funds to the merchant, first through a merchant account and finally settling into a business bank account once the transaction is complete.
Payment gateways are an essential part of providing customers with safe, seamless and satisfactory shopping experiences.
Key types of payment gateways
Let’s see how payment gateways work in a few common e-commerce scenarios: shopping carts, hosted payment pages and integrated payment pages.
Shopping cart services and integrated e-commerce platforms are popular among small and growing businesses for their ease and convenience in setting up shop online. The shopping cart is among the most important and complex systems in e-commerce. Cloud-based shopping cart and e-commerce platforms offer integrated gateway services and connectivity to a variety of payment processors.
Hosted payment pages
Hosted payment pages are where the entire payment process is handled by your payment processor. When it’s time for your customers to pay, your website or app directs them to a payment page. Hosted payment pages can help reduce your security risk by offloading the infrastructure of payments to gateway providers and payment processors.
Integrated payments allow more control over the payment experience you provide to your customers. Third-party integrators such as shopping cart providers and e-commerce platforms offer payments seamlessly integrated with their services. Programming APIs are making integrated payments more accessible and driving innovation in e-commerce websites and mobile apps. Some businesses go even further to develop their own e-commerce infrastructure.
Alternative payment methods
Alternative payment methods are so named because they were alternatives to credit and debit cards issued by major card brands. Today there are over 300 payment methods in use globally. In some cases these “alternatives” have grown to become the leading payment method.
According to Worldpay’s 2023 Global Payments Report, in the U.K., digital wallets like Apple Pay and Google Pay took the lead in e-commerce payments in 2022, gaining 35% of e-commerce. Alternative payment methods like prepaid cards, cash on delivery and buy now, pay later (BNPL) all register meaningful share among U.K. shoppers.
Alternative payment methods haven’t lost their cool. But they’re not nearly as alternative as they were just a few years ago. Seamless convenience, state-of-the-art safety and lower cost of acceptance make these payment methods essential parts of your e-commerce mix.
A merchant account for online payments
An online merchant account allows businesses to accept credit and debit card payments. Every business that chooses to accept card payments will require a merchant account.
At Worldpay, we can set up your merchant account and provide you with the payment products required to start taking card payments. Your customer payments go straight into this account, which then settle into your business bank account. We offer simple yet powerful tools that allow you to monitor your transactions in real time. Your online merchant account is flexible, powerful, easy to manage and supported by round-the-clock U.K. support.
Protection from online fraud
Being concerned about fraud is reasonable and understandable. U.K. Finance estimates that U.K. businesses suffered more than £339 million in e-commerce fraud in 2021, composing 65% of all card fraud.1 Payment fraud is a criminal menace that damages everyone: businesses, shoppers and the financial industries that serve them.
Small businesses have big partners in the fight against fraud. Payment processors, e-commerce providers and security experts work tirelessly to make commerce safer for everyone. From machine learning to artificial intelligence, big data to biometrics, battles are being fought and won. Small businesses should follow established best practices to protect their business – and their customers.
The most effective way to combat online fraud is to partner with payment and security experts. You’ll want a partner that uses the latest fraud prevention technologies like data encryption and tokenization. Encryption uses powerful algorithms and secret keys to protect data from being seen by third parties. Tokenization replaces secure data with tokens that are managed in a secure vault, making transaction data useless to thieves.
You can’t eliminate risk, but payment partners can help you reduce your risk and make your business safer. Reducing risk means developing a comprehensive safety strategy covering card data security, data breach prevention, fraud mitigation and acceptance optimization. Reducing risk requires knowledge gained from billions of payment transactions to connect the dots to model both “good” and “bad” payment behavior. Reducing risk means you need to get control of your payments.
A chargeback is when a customer disputes a charge on card, resulting in any credits paid to a business to be “charged back” to the business in order to refund the customer. Managing chargebacks can be a challenge for e-commerce merchants as they represent a costly and time-consuming process. Nobody in business ever wants to reverse a sale for any reason.
There are many legitimate reasons for chargebacks – the customer never received or was dissatisfied with the goods, for example. Unfortunately, chargebacks can be a sign of fraud. Chargebacks can reflect direct fraud when an authorised cardholder files a chargeback against fraudulent transactions after a card has been compromised. Other times “friendly fraud” is at play where legitimate cardholders file a chargeback claim despite receiving goods as ordered or family members making purchases by mistake.
Worldpay offers chargeback management tools that help you work through the process more efficiently and effectively. Chargeback management tools can help you assert your rights in chargeback disputes while containing any chargeback-related losses.
The regulations for accepting online payments
The Payment Card Industry Data Security Standard (PCI DSS) protects consumer credit card data by reducing the risk of data breaches and payment fraud. Major payment schemes including Visa, Mastercard and American Express established PCI DSS as a common security baseline for businesses that accept credit cards online.
Every business that accepts credit cards needs to be in compliance with PCI DSS. Complying with PCI DSS is mandatory, but doing so offers benefits beyond compliance. Following data security standards reduces your vulnerability to potentially devastating impacts of data breaches and fraud.
Staying in compliance is easier than you think. Depending on how your payments are set up, you may be able to achieve compliance through a self-assessment, reduce the scope of compliance or your compliance requirements may be fulfilled by your e-commerce platform vendor.
Regardless of how you achieve compliance, PCI DSS standards represent common sense best practices that help reduce security risk and can save your business money.
Connect with a payment expert
Worldpay eCommerce is an online payment solution designed for small and mid-sized businesses. Whether you’re ready to set up a new payment gateway or simply need to ask a few more questions on online payments, a payments expert at Worldpay can help.
1 “UK Finance Annual Fraud Report” (2022) p14, UK Finance [https://www.ukfinance.org.uk/system/files/2022-06/Annual%20Fraud%20Report%202022_FINAL_.pdf,]