Aug 262015

payment gateways

Once you have made a decision that you want a shopping cart on your website then you will probably need to connect your shopping cart system (also known as eCommerce site or shopping site) to a payment gateway.

On the high street, once you have selected items for purchase, you would take these items to the checkout / cashier who then accepts and processes your payment (takes your cash or processes your credit card through the credit card swipe machine / POS terminal).

In a shopping website, the customer ‘checks out’ their order and then must provide their payment instructions which, once approved, will release the order for processing.  Payment instructions could be credit card information, COD information, etc.  The shopping system passes the payment instructions through the payment gateway for processing.

The flow of financial information is like this:

Shopping Cart <==> Payment Gateway Provider (such as PayPal, 2Checkout, Stripe, etc.) <==> Payment Processor (Bank, Visa, MasterCard, etc.)

If you want to accept payment…you must have a payment gateway…

If you want to accept payments from your online customers, you MUST have a payment gateway.  Also, depending on your merchant agreement (i.e. which bank or service you are using for credit card processing) you must also ensure that your payment gateway is able to process your online payments (i.e. to talk to the merchant acquiring bank).  If it doesn’t, then you may still be able to accept payments but your transaction fees will be a lot higher.

The payment gateway acts as an intermediary to make sure that the payment instructions is sent to the correct payment processor (such as your bank, Visa, MasterCard, Amex, etc.).

Selecting the right payment gateway…

This is a very complex matter and a wrong decision in the choice of shopping cart system and payment gateway can seriously impact profits due to high transaction fees from a payment gateway provider.  Give us a call should you need to find the best Payment Gateway to maximize your profits.

by RapidPage