Internet Payment Gateways
A payment gateway allows merchants to securely accept all forms of payments online. A payment gateway is a separate service and acts as an intermediary between the merchants' shopping cart and all the financial networks involved with the transaction, including the customers' credit card issuer and your merchant account. Think of it as an Electronic Funds Transfer POS terminal in cyberspace. It checks for validity, encrypts transaction details, ensures they are sent to the correct destination and then decrypts the responses which are sent back to the shopping cart.
This is a seamless process and your customer does not directly interact with the gateway; as data is forwarded to the gateway via your shopping cart and a secure (SSL) connection. The shopping cart is configured via plug-in to send information in a format that is acceptable to the particular gateway.
The proper choice of payment gateway is another vital element, which will contribute to your success or failure as an online business.
You should ensure that the payment gateway service is compatible the shopping cart vendor. If you haven't yet selected a shopping cart, get a list of supported applications from the payment gateway service provider. A payment gateway may offer great pricing, but if the range of shopping carts or storefront software it supports is limited, the whole process of setting up for taking online payments may cost a lot more than you think.
Ensure the gateway at least offers AVS protection. The Address Verification System (AVS) AVS decreases the incidence of accepting fraudulent transactions by verifying the cardholder's billing address with the card issuer. Using AVS on your transactions may also benefit you by a reduction in fees charged by your Merchant Bank.
Checks to see what other types of transaction protection are offered to you as a merchant. These will probably be 'premium' services, the charges added to the basic servicing fees, but dependent on your products may be absolutely necessary.
Whether your business is big or small, there are gateways that can serve your needs. One of the great things about running an online business is the flexibility involved. When you use a payment gateway, you do not need to be present for every transaction that occurs. You can set your own hours and even receive payments while you're sleeping.
A good gateway will take care of all the details. It will process credit cards, debit cards, and electronic checks. It will approve customers in real-time and will send them e-mail receipts for their records.
Other things you should look for in a gateway are SSL encryption, customizable reports, and 24-hour support. A less-than-perfect service will reflect poorly on your business. Taking the time to find the right payment gateway will pay off in the long term, helping you to create solid relationships with your customers.
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