Fintech Insights

How secure payment gateways connect with success

November 08, 2019

One of the most critical operational issues business managers face is managing payments. That’s understandable since payments are the fuel that allows businesses like yours to sustain day-to-day operations and build the foundations of growth for the future. 

You know that accepting card payments is critical. So it would make sense to have a payment solution that makes it easy to accept card payments securely, reliably, and lets your customers pay the ways they want. 

For many businesses a secure payment gateway is a vital link in their payment infrastructure. This express guide offers answers in plain language to some of the more frequently asked questions about payment gateways: what they are, how they work, and why they may be a perfect solution to help your business grow. Let’s see how secure payment gateways help small businesses connect with success.

What’s a payment gateway? 

A gateway is simply a connection point that allows different networks to communicate with one another. A secure payment gateway is a portal that helps connect business to the payment processors that are essential to accept credit and debit cards. 

Secure payment gateways are one component in the payment solution for a wide variety of eCommerce merchants, traditional brick-and-mortar businesses, and businesses that serve their customers through multiple channels.

Are payment gateways the same as payment processors? 

No. Payment processors and secure payment gateways each help businesses accept credit card and debit card payments from your customers. Yet each fills a different role that’s helpful to understand. 

A payment processor allows businesses to accept credit and debit cards and handles the processing of those transactions. Payment processors bring businesses, banks, and card brand networks together to complete the payment cycle. 

Together, secure payment gateways along with payment processors are helping businesses of every size provide better shopping experiences however your customers shop: online, in-person, in-app, even over the phone.

What situations require a secure payment gateway? 

Payment gateways are used in a wide variety of situations, from eCommerce to in-store, mobile applications to virtual terminals. 

Secure payment gateways can be found in three key types of eCommerce scenarios: shopping carts, hosted payments, and integrated payments. In some cases gateway services are bundled with another solution while others are arranged a la carte. 

  • Shopping cart services offer easy setup and seamless convenience for shoppers and businesses alike. Shopping cart services and eCommerce platforms offer integrated gateway services to connect with payment processors.
  • Hosted payment pages allow you to outsource the entire payment process to a third party. When it’s time for your customers to pay, your website or app directs them to a payment page. Hosted payment pages reduce your security risk by offloading the infrastructure of payments to security experts.
  • Integrated payments offer businesses unlimited control over the payment experience. Programming APIs are making integrated payments more accessible and driving innovation.

How does a payment gateway work?

Secure payment gateways are complex, diverse and continue to evolve to serve the needs of growing businesses. There are a few core elements to how a gateway works: 

  1. A customer initiates a transaction by swiping, dipping or tapping their card or mobile payment device at a physical point of sale, entering their payment credentials on a website or mobile app, or using payment credentials stored in digital wallets.
  2. The merchant passes transaction details to a gateway.
  3. The gateway service routes the transaction to the appropriate payment processor.
  4. The payment processor facilitates the payment, including routing through the card brands and customer’s issuing bank to approve (or deny) the transaction.

Does my business need a payment gateway? 

Whether your business requires a secure payment gateway depends on how you set up payments. Every eCommerce business that accepts credit cards and debit cards needs a secure payment gateway. Your payment gateway may be bundled with another service, but currently a secure payment gateway is a requirement of eCommerce. 

For accepting payments in-store, you can also use a direct interface to a payment processor or payment application. Direct interface solutions are configured so your POS systems send credit card transactions directly to the payment processor, eliminating the need for a gateway solution.

How can I find out more about payment gateways? 

Secure payment gateways help businesses by helping make payments more secure while delivering fast, easy and frictionless payment experiences for your customers. If you’re not sure whether you need a secure payment gateway (or even whether you have one already), a great place to start is to have a conversation with a payments expert.