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For internet merchants a credit card payment gateway is almost a basic requirement for business. Payment gateways provide safe secure credit card processing for many small business owners and web entrepreneurs. Using a credit card payment gateway is a way for new ecommerce business to immediately begin to accept credit card transactions. By using a gateway service, merchants are able to add an additional level of security and service to credit card transactions.
Benefits of Using a Payment Gateway
A credit card payment gateway is an important business tool for businesses providing sales and services through ecommerce transactions. The payment gateway is a credit card payment authorization service that facilitates communication between the customer, the merchant and the financial system. Transactions are authorized within a matter of seconds and there is no need to manually process credit card transactions.
One of the benefits of using a credit card payment gateway is protection from credit card fraud. The payment gateway acts as the gatekeeper for credit card transactions. When purchases are attempted with cards that have been reported as stolen or lost, the payment gateways stops the transaction. Since every transaction costs an ecommerce business a fee, the gateway prevents additional charges from charge backs for attempted credit card transactions from fraudulent credit card use.
Another benefit is the ease of use when processing credit card transactions. Since transactions happen almost instantaneously, transactions are quickly processed and payments are also efficiently completed. If you have a substantial number of online transactions, using a payment gateway will help your business run more efficiently.
Possibly, one of the largest benefits of using a credit card payment gateway is that once your business signs up for services, you can immediately begin to accept customer credit card transactions. For new businesses, this can be an extremely attractive benefit since most direct merchant accounts require a positive credit score before acceptance and approval for credit card merchant services.
Gateway Processing
One of the problems that many internet businesses face is the possibility of credit card fraud and unauthorized purchases from individuals who have stolen a credit card. Using a credit card payment gateway helps small business owners with their credit card processing by adding a layer of security in payment processing. Usually, the payment process takes only a matter of seconds and is entirely automated through the internet.
When an order is placed, the customer provides their credit card payment information via a safe secure website. The payment gateway company then takes that information and transmits it to the merchant bank’s payment processor. The merchant bank then submits the information to the credit card transaction network, which then transmits the information to the credit card issuing bank. The bank then accepts or declines the charge.
The information transfer is then reversed and the credit card issuing bank transmits the transaction information to the credit card transaction network, which then transmits the transaction information to the merchant bank. The merchant bank transmits the information to the payment gateway. The payment gateway notifies both the merchant and the customer of the credit card authorization.
Within a few days – usually two to four days – the funds are transferred through entire system and into the merchant’s business account.
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