Payment gateway providers, the online equivalent of a credit card terminal, have become a driving force in our digital economy. As the technology becomes faster and more secure, payment gateway services are becoming more and more popular in everything from buying a cup of coffee to paying a dog walker.
What is a Payment Gateway?
A payment gateway is the point of sale in Ecommerce, the spot where software authorize a credit card payment. It allows you to charge a customer’s credit or debit card with the purchase they selected online. A payment gateway provider can be used by different types of businesses, including online retailers or more traditional brick and mortar businesses. A payment gateway facilitates the transfer of information between a payment portal, such as a website or mobile phone and the bank. PayPal is an example of a popular payment gateway provider. A payment gateway automates the payment transaction between the shopper and the merchant. It processes, verifies and accepts or declines credit card transactions on behalf of the merchant through secure Internet connections. Also known as an IP payment gateway, this technology can be used across international borders.
How Does a Payment Gateway Work?
Since payment gateway providers facilitate communication within banks, security is essential to protecting sensitive data. Security is an important component of all payment gateways because sensitive data, such as credit card information, is frequently stolen. Credit card associations have created a set of rules and security standards that must be followed by anyone with access to card information, including payment gateways providers. Customer orders are usually submitted through HTTPS protocol. This method securely communicates personal information through the parties involved in the transaction. Website design can now enable payment gateways services on new and redesigned sites. A significant advantage of payment gateway providers is their ability to offer remote real-time transactions securely. As a result, Ecommerce has grown by leaps and bounds in recent years. Payment gateway providers are expected to help grow mobile device spending into a more than $600 billion industry by 2018 as convenience becomes big business. 