An e-Commerce payment gateway facilitates the safe, secure, convenient, and easy acceptance of various electronic payment transactions for online purchases. Also called a sub-component of online data exchange, e-Commerce payment gateways have grown increasingly popular because of the widespread usage of internet-based banking and shopping. The main function of an e-Commerce payment gateway is to provide information for users to enable safe, efficient, and easy electronic payments for goods or services purchased over the internet. A gateway allows users to transact business online that would otherwise not be possible without it. It connects users via secure internet connections to online payment processing companies, such as PayPal or WorldPay, through a site.
Through a payment gateway, online businesses are provided with the means to process electronic and/or sensitive financial information easily and securely. Through this secure interface, authorized financial institutions and online merchants can share information necessary for secure electronic transfers, such as credit card numbers, bank accounts, and debit cards. They also provide users the ability to make secure payment transactions from any location through a single interface, such as at the merchant’s or the seller’s website. In turn, a payment gateway facilitates the safe storage, safekeeping, and safekeeping of financial information of both users and other third parties.
Merchant Account: A merchant account is a type of online payment gateway that provides a method of transferring payment from a buyer to a seller. Accounts generally come with a fixed or flexible monthly fee, and the rate varies based on the amount of credit or debit used to pay for the goods bought. Some companies offer free, or low-cost merchant accounts while others may charge additional fees.
Payment Processor: Another term that describes an essential component of an eCommerce transaction is a payment processor. Payment processors are responsible for converting credit card transactions into cash or other payments acceptable to the business. The most common processor used by merchants is PayPal, but some merchants use their own unique processors or accept payments from a host of third-party websites instead of using PayPal.
Bank Payment Gateway: A bank payment gateway is a secure part of a merchant or seller’s site that holds and processes card information for card transactions between buyers and sellers. Transactions are authorized by the cardholder (person authorized by the cardholder to make the purchase) before they are transferred to the merchant’s or the seller’s website. Authorized buyers and sellers must enter their card information and authorization code into a secure payment gateway, which is normally protected by a password. Once entered into the payment gateway, it will process the transaction and transmit the information to the recipient’s card, or the website that will be used to complete the sale.
Payment Service Provider (PSP): A Payment Service Provider is a middleman between the buyer and merchant. The PSP’s role is to complete the transaction between the buyer and merchant, usually through the use of a bank. The Payment Service Provider verifies the card details supplied by the buyer, including the name and address of the purchaser, the amount of money being purchased, and the item being purchased, before completing the transaction. The Payment Service Provider then transfers the transaction details to the merchant. It is the role of the PSP to ensure the card details are encrypted and cannot be accessed by anyone else.