Payment Gateways – Where Secure Payment Processing Begins

ByMickael GibraelPublished:Updated:

Whether you do business exclusively online or are a brick and mortar making the transition to online sales, the new terms you’ll need to learn to accept payments online may sound like a foreign language at first. There is a bit of a learning curve to mastering these new terms, but they are very important to the financial health of your business. This article explores payment gateways and why they are so important for helping businesses make secure payment transactions online so you can get paid for the products and services you provide.

Any business that wants to accept payments online needs to have a secure payment gateway. Secure payment processing is an essential business practice, especially for those designated as high-risk.

Now that you’ve seen these somewhat foreign terms, let’s explore what they mean and why they matter to your business.

What is a Payment Gateway?

It may sound a little mysterious, perhaps even a little complex. But, the term “payment gateway” is simple to understand. If you operate a business online and intend to receive payment for goods or services, then you need a payment gateway.

A payment gateway can be understood as a technology system that allows you, the business owner, to securely send credit card transaction information to your credit card processor. After this information is received, your payment gateway allows you to receive a notification from the credit card processor that either authorizes or declines the transaction.

In short, a payment gateway is a software application that acts as the middle-man for your website and the customer’s issuing bank. Depending on the payment gateway provider you choose, your payment gateway may perform additional tasks. The best payment gateways can easily integrate with the other software products you use to conduct your online business. Some software worth mentioning include: 

  • Quickbooks
  • Magento
  • Opencart
  • WooCommerce
  • 3dCart

What is PCI Compliance?

Secure payment gateways take things like PCI compliance seriously. If you haven’t heard the term, PCI Compliance means that your business is, well, compliant with the standards set forth by the Payment Card Industry Data Security Standard (PCI DSS). If your business is PCI compliant, it means that you’re meeting the standards deemed essential to ensuring the safety of your customers’ credit or debit card information. Your payment gateway is the first line of defense in this effort, helping to ensure payment processing security for your business.

Payment Gateway vs Payment Processor – What is the Difference?

As a reminder, the payment processor is the software that allows you to accept credit card payments for your business. This software enables the use of credit card processing for your brick and mortar store, as well as online stores. The difference, though, is online stores aren’t able to simply scan the credit card or insert it into a secure chip reader to authenticate the card and approve the transaction. That is where the payment gateway comes into play. 

The payment gateway provides a secure means of authenticating online transactions or other card-not-present transactions. Ultimately, it securely encrypts data that’s coming and going and informs merchants and customers whether the transaction is approved.

Because there is a greater risk of fraud when working with card-not-present transactions, the interchange rates from the card brands are higher and some payment processors do charge slightly higher rates for card-not-present transactions.

Do Payment Gateways Integrate with Existing Software?

Whether you’re an online merchant or a brick and mortar business that is making the transition to accommodate online sales and services, you probably have software products you already use to help support your business. From accounting software to inventory management tools, and even tools to help you keep up with your shipping needs, there are countless tools on the market that help your business operate smoothly through the automation of many tasks that would otherwise be excruciatingly time-consuming.

That is why you need to take your time when choosing your payment gateway provider. Not all payment gateways are created the same. You’ll need one that integrates with your existing software services without causing massive disruptions or forcing you to change the way you do business.

Ultimately, the answer is neither yes or no. Most payment gateways integrate with existing software services and products. Not all do, however. Among those who do, some offer more integrations than others along with easier integrations. The BankCard Services payment gateway easily integrates with numerous software services and products so you can focus on other important details of operating your business.

The Importance of Securing Your Data

Whether you’re operating a brick and mortar business, an online business, or a business with a presence in both, your security practices are what make the difference for your customers. That’s why offering secure transactions is so important. It’s all about protecting data and reducing fraud so that your customers can shop with you confidently.

If your business has too many fraud complaints, it can be labeled a “high risk” business. While far from the only reason, it is one that can result in greater difficulty finding agreeable merchant service providers for your payment processing needs, so be sure to take this seriously.

If you’re ready to work with a payment gateway provider that offers a secure payment gateway, easy integrations, and a stellar support team to help you make the transition, then it’s time to contact a BankCard specialist to help walk you through the process.