payment gateways - 3 Tips for Choosing a Payment Gateway
by Chris Malta
What is a Payment Gateway?
Payment gateways allow eCommerce entrepreneurs, like eStore owners or eBay 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 explains, "Basically, this is just the technology necessary to consummate a payment transaction."
Getting Your Money from There to Here
Many people confuse merchant accounts with payment gateways, but they serve different functions in your payment solution. 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 E-Biz, their card is processed via the payment gateway. The money is then moved over to the merchant account service.
From there, the merchant account service moves those newly captured funds to your business bank account.
What Do I Look for in a Payment Gateway?
There are three key issues you need to consider when selecting a payment gateway for your online business:
- 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.